Amazon Bars Prime Sellers From Shipping With FedEx As Holiday Shopping Peaks

Seattle-based e-commerce giant Amazon.com Inc. AMZN has temporarily barred third-party sellers from using FedEx Corporation's FDX ground shipping service for Prime eligible orders, the Wall Street Journal reported on Monday.

What Happened

Amazon enforced the ban due to FedEx orders reportedly getting delivered late during the holiday season rush, the Journal said.

FedEx's on-time delivery rate in the week after Black Friday was 92.7%, according to ShipMatrix Inc.'s data reported by the Journal.

At the same time, its competitor United Parcel Service UPS delivered the orders on time 92.7% of the time, while Amazon delivered 93.7% of all orders on time.

The third-party sellers on Amazon can continue to use FedEx's express delivery service, according to the Journal. The sellers can also continue to use FedEx's ground services for non-Prime orders.

Amazon charges $119 per year or $12.99 for Prime membership that includes free on-time delivery on all orders in the time-frame.

Earlier in June, FedEx ended its partnership with Amazon to deliver its product domestically. The company said it wanted to serve the "broader e-commerce market."

Price Action

FedEx's shares closed 0.95% lower at $164.10 on Monday. The shares were further 1.07% down in after-hours trading.

Its competitor UPS' shares closed 0.42% higher at $119.12.

Amazon's shares closed 0.47% higher at $1,769.21.