Amazon removes FedEx seller delivery ban, FedEx shares rise

<pre><pre>Amazon removes FedEx seller delivery ban, FedEx shares rise

An employee processes a package at the Amazon Fulfillment Center in Baltimore, Maryland on April 30, 2019.

Clodagh Kilcoyne | Reuters

Amazon is informing sellers that they can start delivering via FedEx's floor after the company temporarily suspended access to the service during the Christmas shopping season. FedEx stocks even rose 3% after the news, closing the day up 1.8%.

The company will resume FedEx's floor and household appliance services on Tuesday at 5:00 p.m. ET, according to an email Amazon sent Tuesday to retailers who were viewed by CNBC.

An Amazon spokesman confirmed to CNBC that the company would resume ground delivery on Tuesday. The spokesman said that FedEx Ground and Home Services has consistently met Amazon's timely delivery requirements, so the shipping option for Prime orders has been reintroduced.

A FedEx spokesman also confirmed that Amazon lifted the ban and that FedEx's service levels were strong during peak vacation. The average transit time for floor packs was 2.4 days, and 18% of the floor packs were delivered early.

A woman walks past the FedEx Corp. ground vehicle, which was parked in the Midtown neighborhood of New York, USA on Friday, December 4, 2015.

John Taggart | Bloomberg | Getty Images

"This is good news for our mutual customers who rely on the FedEx Ground offering," said the spokesman. "We look forward to working with Seller Fulfilled Prime retailers and providing excellent service."

Sellers were unable to use FedEx's ground delivery services to ship Prime packages for nearly a month. In December, the company blocked third-party access to FedEx's floor and home delivery services for Prime orders. Amazon blamed the decision for FedEx's poor delivery performance and noted that once the service improved, access would resume.

The decision made some third-party dealers during the busiest shopping season of the year. Some sellers were forced to find a new vendor, which could result in higher upfront costs. Other sellers said they were frustrated with the FedEx delays.

Tensions between Amazon and FedEx had escalated before the company stopped using ground delivery services. FedEx announced plans in August last year to terminate the Amazon ground delivery contract. Last September, FedEx started mentioning Amazon as a competitor after denying the company as a threat. Amazon has gradually distanced itself from FedEx and UPS by establishing its own delivery network.

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