Report: Amazon grounds FedEx for some third-party deliveries

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Report: Amazon grounds FedEx for some third-party deliveries

By Dan Berthiaume - 12/16/2019

Amazon is reportedly escalating its ongoing delivery feud with FedEx. 

According to CNBC, FedEx has confirmed an initial report in the Wall Street Journal that Amazon is forbidding third-party sellers on Amazon Marketplace to use FedEx ground delivery services.

“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,” a FedEx spokesperson said in a statement to CNBC. “FedEx Ground stands ready to support our customers and will continue to deliver record-breaking volume this holiday season.”

Amazon reportedly sent an email to third-party sellers informing them of the ban this week which said it will continue prohibiting them from using FedEx ground delivery until its performance improves. Third-party sellers can currently still use FedEx Express delivery to fulfill Amazon Prime orders. New data from last-mile delivery provider Convey Inc. indicates that since Thanksgiving 2019, FedEx has had an on-time delivery of 68.3% compared to 77.5% during the equivalent period in 2018.

In August 2019, FedEx decided not to renew its contract to deliver Amazon packages through its ground network. This followed a June 2019 announcement that FedEx would not renew its domestic air-shipping Express contract with Amazon. The company still has an agreement with Amazon for international deliveries.

Amazon, which has not yet publicly commented on reports of this new FedEx ground delivery ban, is pursuing several new proprietary delivery ventures. These include Delivery Services, a program that allows entrepreneurs to create their own local delivery networks with up to 40 vans each, a new delivery drone that can take off and land like a helicopter, and ongoing expansion of its air network.