Amazon bans third-party sellers from using FedEx as spat escalates

Amazon has escalated its feud with FedEx by banning all of its third-party sellers from using the delivery giant’s ground-delivery service on “some of the highest demand shipping days in history”.

FedEx and Amazon have been caught in an ongoing tussle throughout 2019 as Amazon has attempted to remove its reliance on third-party delivery companies and build its own network.

After the pair announced their ground-delivery contract would not be renewed in August, two months after FedEx announced its Express unit would also delivering Amazon packages, Amazon has now further severed ties.

READ MORE: FedEx splits with Amazon as ecommerce giant builds own delivery network

Confirming a report in the Wall Street Journal Amazon said it had informed its third-party sellers, which now account for 58 per cent of its total sales, that it was restricting FedEx’s home and ground-delivery services for Prime orders.

Sellers are understood to still be able to use FedEx’s Express delivery service for Prime orders, as well as its home and ground-delivery service for standard orders.

Amazon said the move was aimed at ensuring FedEx was able to manage cutoffs for Christmas delivery ensuring customers receive their packages on time.

In response, a FedEx spokesperson told CNBC: “While this decision affects a very small number of shippers, it limits the options for those small businesses on some of the highest demand shipping days in history, and may compromise their ability to meet customer demands and manage their businesses.

“FedEx Ground stands ready to support our customers and will continue to deliver record-breaking volume this holiday season.”

The news has sent FedEx shares dropping over one per cent.

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