Amazon Tells Sellers They Can't Use FedEx Ground

The decision comes in the middle of the high holiday shopping—and delivery—season

Amazon has forbidden its third-party sellers from using FedEx ground delivery for Prime shipments starting this week, FedEx confirmed.

That’s according to the Wall Street Journal, which cited an email sent to merchants noting “a decline in performance heading into the final stretch of the holiday shopping season.”

Jonathan Weber, a third-party seller focused on outdoor equipment and school supplies, told Adweek the move impacts sellers who use Amazon’s Seller Fulfilled Prime (SFP) program, or those who fulfill their own orders.

Weber described the SFP program as used by “a small percentage of sellers” because it requires “a robust warehouse infrastructure to be able to match Amazon’s own speed in making shipments.”

In a statement, a FedEx spokesperson confirmed the decision impacts “a very small number of shippers,” adding, “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.”

The WSJ reported the ban will last until the delivery performance improves—and that Amazon suggested FedEx’s faster Express service as an alternative for Prime orders.

The issue surfaced in an Amazon seller forum on December 13.

It’s the latest spat between Amazon and FedEx this year. In June, the courier said it would no longer fly for Amazon as it focuses on servicing other ecommerce players like Target, Walgreens and Walmart. Two months later, FedEx ended ground deliveries, too. That, however, impacted Amazon-fulfilled orders, including those from third-party sellers like Weber who are part of its Fulfilled by Amazon (FBA) program.

“We were affected earlier this year when Amazon shut down their contract with FedEx,” Weber said. “Previously we had shipped most of our products in to FBA with FedEx Ground, the cost of which was subsidized by Amazon and was almost always a bit cheaper than the alternative of Amazon-subsidized UPS shipping. We expect this particular change will cost us a few thousand dollars a year in higher inbound shipping costs.”

An Amazon spokesperson was not available for immediate comment. Meanwhile, there’s speculation Amazon is building out its own air carrier service.