The Wall Street Journal: Amazon blocks sellers from using FedEx Ground for Prime shipments

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Amazon.com Inc. is blocking its third-party sellers from using FedEx Corp.’s ground delivery network for Prime shipments, citing a decline in performance heading into the final stretch of the holiday shopping season.

The ban on using FedEx’s Ground and Home services starts this week and will last “until the delivery performance of these ship methods improves,” according to an email Amazon sent Sunday to merchants that was reviewed by The Wall Street Journal.

Amazon AMZN, +0.47%  has stopped using FedEx FDX, -0.90%  for its own deliveries in the U.S., but third-party merchants had still been able to use FedEx. Such sellers now account for more than half of the merchandise sold on Amazon’s website, including many items listed as eligible for Prime.

FedEx said the decision impacts a small number of shippers but “limits the options for those small businesses on some of the highest shipping days in history.” The carrier said it still expects to handle a record number of packages this holiday season. “The overall impact to our business is minuscule,” a FedEx spokeswoman said.

An expanded version of this report appears at WSJ.com.

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