New York (CNN Business)Amazon has lifted a ban that temporarily kept some third-party sellers on the site from shipping orders using FedEx.
As of Tuesday afternoon, FedEx Ground and FedEx Home are again available as shipping options for Amazon Prime orders from third-party sellers, according to an email Amazon (AMZN) sent to sellers that was obtained by CNN Business. In the email, Amazon said its “Buy Shipping” feature for sellers also takes into consideration orders’ ship-from location, promised delivery date and other information in determining what shipping services to make available. FedEx’s stock rose around 2% Tuesday following reports that Amazon had lifted the ban.
Amazon blocked third-party sellers from using FedEx (FDX) to ship Prime packages in December over concerns about performance and delivery time amid the crucial holiday shopping season. However, third-party sellers were still allowed to use FedEx’s more expensive Express service for Prime orders and Ground for non-Prime shipments, according to Amazon. FedEx said at the time the ban would affect only a small number of shippers, but that it could create challenges and raise prices for small businesses by limiting their shipping options during the busiest shopping season of the year.Read More The decision came amid Amazon’s aggressive effort to speed up delivery times and expand its own shipping network, moves that threaten established shipping companies such as FedEx and UPS.
However, Amazon’s own distribution ambitions are likely to continue causing problems for FedEx. The two companies underwent a very public breakup in mid-2019 when they decided to no longer partner for deliveries directly from Amazon. Amazon still allowed third-party sellers to use FedEx, until the December ban was imposed. FedEx’s profits slipped in the months after ending its relationship with Amazon, a drop it attributed in part to the “loss of business from a large customer.” FedEx is also in the midst of transitioning to a new business model, a change that’s driven up costs and put a strain on the company’s profits.
Source: edition.cnn.com