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Report: Amazon Suspends Third-Party Delivery Service Amid COVID-19 Sales Spike

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Amazon will halt the pilot of its Amazon Shipping delivery service for non-Amazon packages in June, people familiar with the matter told The Wall Street Journal. The e-Commerce giant is pausing the program to focus on increasing capacity due to a surge of orders on its own platform, but the company also is expected to re-evaluate the offering.

“We understand this is a change to your business, and we did not take this decision lightly,” Amazon said in a note to shippers seen 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 Shipping launched in 2018 under the name “Shipping with Amazon.” The service initially rolled out in Los Angeles before spreading to several other U.S. cities, but it has not yet matched the reach of UPS or FedEx. Still, Amazon is a powerful player in the shipping industry, with more than 30,000 vehicles, 20,000 trailers and dozens of aircraft across the country.

The retailer’s in-house delivery capabilities proved strong enough for Amazon to drop its ground delivery contract with FedEx in August 2019, two months after FedEx Express declined to extend an agreement to fly Amazon packages in the U.S. However, Amazon still works with UPS, the USPS and regional carriers to supplement the capabilities of its network.

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The COVID-19 pandemic and the associated e-Commerce sales spike has been straining even Amazon’s capabilities, causing the retailer to bar receipt of non-essential items from marketplace sellers at its U.S. and UK fulfillment centers. The retailer is in the process of hiring 100,000 additional warehouse workers to keep up with demand, with more than 80,000 slots already filled, and it may delay Prime Day from its usual early July date to give itself a chance to restock before the massive shopping holiday hits.

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