With the holiday season in full swing, as shoppers scramble to buy gifts over the next week, Amazon has made a striking change to its shipping policy.
The tech behemoth is no longer permitting third-party sellers to use FedEx’s ground-delivery shipping, signifying the latest escalation in the two companies’ ongoing competition.
FedEx validated the decision after a report in The Wall Street Journal was released on Monday. The news drove FedEx shares down by as much as 1.1%.
“While this decision affects a very small number of shippers, 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,” a FedEx spokesperson said in a statement to CNBC. “FedEx Ground stands ready to support our customers and will continue to deliver record-breaking volume this holiday season.”
Amazon declined to comment on the statement, but the company delivered a message to sellers on Sunday, explaining to them that this is only temporarily restricting FedEx’s ground and home delivery services for Prime orders. The company said sellers can still utilize FedEx’s Express shipping service for Prime orders, or FedEx’s ground and home delivery services for standard orders.
Amazon’s decision to curtail Fedex also comes after a recent skirmish between Jeff Bezos and President Trump, where Amazon says President Trump engineered “behind-the-scenes attacks” against the company, which led to the e-commerce and cloud computing company missing out on a major contract for cloud services.
“The question is whether the President of the United States should be allowed to use the budget of DoD to pursue his own personal and political ends,” the filing states. “DoD’s substantial and pervasive errors are hard to understand and impossible to assess separate and apart from the President’s repeatedly expressed determination to, in the words of the President himself, ‘screw Amazon.’ Basic justice requires re-evaluation of proposals and a new award decision.”
For investors looking to use ETFs to play Amazon, the Fidelity MSCI Consumer Discretionary Index ETF (FDIS), the ProShares Online Retail ETF (NYSEArca: ONLN), and the Consumer Discret Sel Sect SPDR ETF (NYSEArca: XLY) all have healthy allocations of the tech giant.
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