Amazon to Suspend Delivery Service That Competes With UPS, FedEx -- Update
April 07 2020 - 7:13PM
Dow Jones News
By Paul Ziobro
Amazon.com Inc. will halt a delivery service for non- Amazon
packages, according to people familiar with the matter, as it
re-evaluates the nascent offering that competes directly with FedEx
Corp. and United Parcel Service Inc.
Amazon told shippers the service, known as Amazon Shipping, will
be paused starting in June. It was available in just a handful of
U.S. cities.
Under the program, Amazon drivers would pick up packages from
businesses and deliver them to consumers, rather than ship orders
from Amazon warehouses.
"We understand this is a change to your business, and we did not
take this decision lightly," Amazon said in a note to shippers
reviewed by The Wall Street Journal. "We will work with you over
the next several weeks so there is as little disruption to your
business as possible."
Amazon is suspending the service because it needs its people and
capacity to handle a surge in its own customers' orders, according
to a person familiar with the matter. The company has said it wants
to hire 100,000 warehouse workers and is focusing on shipping
essential items during the coronavirus outbreak.
Amazon in the past had sought to woo shippers to the new service
by offering simpler rates, including the elimination of many fees
and surcharges that other carriers add on to pad their revenues. It
tested the program in London and Los Angeles, but didn't make it
widely available in the U.S.
Amazon remains a force in the shipping industry, with over
30,000 vehicles, 20,000 trailers and dozens of aircraft that move
packages across the country. In addition to its own delivery
drivers, Amazon also hands off a significant chunk of its home
deliveries to UPS and the U.S. Postal Service.
Amazon last year ended a shipping contract with FedEx, which
increasingly viewed the online merchant as a competitive threat
because of its growing shipping prowess.
FedEx and UPS have experienced a Christmas-like boom in home
deliveries in recent weeks as people shop from home, while
shipments have deteriorated to stores or businesses that have
closed.
Meanwhile, the virus has upended the daily routine of delivering
packages. Amazon, FedEx and UPS have each had to implement new
safety measures and scramble to provide protective equipment as
some workers test positive for the coronavirus.
A UPS spokesman declined to comment.
FedEx said its ground network is well prepared to manage the
current surge in e-commerce. "We are continuing to work with our
small business customers during this time to support their growth,"
a FedEx spokeswoman said.
Write to Paul Ziobro at Paul.Ziobro@wsj.com
(END) Dow Jones Newswires
April 07, 2020 18:58 ET (22:58 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
FedEx (NYSE:FDX)
Historical Stock Chart
From Aug 2024 to Sep 2024
FedEx (NYSE:FDX)
Historical Stock Chart
From Sep 2023 to Sep 2024