Amazon bars sellers from using FedEx for some deliveries

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Amazon is banning third-party merchants from using FedEx’s ground service to deliver to Prime members, suggesting that it thinks the service is too slow to get packages to their destinations in time for Christmas.

The temporary ban will block those companies from using FedEx Ground service, although they can still use pricier FedEx Express shipping for Prime shipments.

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More than half of the items sold on Amazon.com come from third-party sellers, who post their goods for sale on Amazon’s online marketplace. News of the ban was first reported by The Wall Street Journal.

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FedEx said in a statement that the decision affects “a very small number of shippers” and said 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 severed ties with Amazon earlier this year, saying it wouldn’t make ground or air deliveries for the online shopping giant.

Amazon and FedEx have a testy relationship. The ecommerce giant has been expanding its own delivery fleet in the past few years, hoping to rely less on UPS, FedEx and other delivery services. Last week, research by analysts at Morgan Stanley estimated that Amazon delivers about half of its own packages.

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Credit Suisse analysts speculate that Amazon’s move to restrict sellers’ use of FedEx could point to delivery challengers at the retailer, citing longer than usual delivery times in the week following Cyber Monday.

“We cannot help but wonder whether the news is symptomatic of broader delivery issues that [Amazon’s own network might be facing as we approach the final days of what is an already compressed peak season — particularly given the added constraints of one-day shipping and fewer external carrier options,” they said in a note to investors.

Amazon’s delivery trucks are expected to handle 275 million holiday season shipments, highlighting the impact of online shopping.

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