Amazon has lifted a ban that temporarily prevents some third parties on the website from sending orders with FedEx.
As of Tuesday afternoon, FedEx Ground and FedEx Home will again be available as shipping options for Amazon Prime third-party orders. This is from an email Amazon sent to sellers sourced from CNN Business. In the email, Amazon said that the Buy Shipment feature for sellers also takes the location of orders, the promised delivery date, and other information into account to determine which shipping services should be available.
FedEx stock rose around 2% on Tuesday after Amazon lifted the ban.
Amazon prevented third parties from shipping FedEx Prime packages in December because of concerns about performance and delivery time during the crucial Christmas shopping season. However, according to Amazon, third-party providers were still allowed to use FedEx’s more expensive express service for prime orders and Ground for non-prime shipments.
FedEx said at the time that the ban would affect only a small number of shippers, but it could create challenges and increase prices for small businesses by restricting their shipping options during the busiest shopping season of the year.
The decision was made due to Amazon’s aggressive efforts to shorten delivery times and expand its own shipping network. This is a threat to established shipping companies like FedEx and UPS.
However, it is likely that Amazon FedEx’s own sales ambitions will continue to cause problems. The two companies had a very public separation in mid-2019 when they decided to stop being partners for deliveries direct from Amazon. Amazon continued to allow third parties to use FedEx until the December ban was imposed.
FedEx’s profits declined in the months following the termination of its relationship with Amazon, due in part to the “loss of a major customer’s business”. FedEx is also in the midst of transitioning to a new business model, a change that will drive costs and weigh on the company’s profits.