Surging Coronavirus Demand Leads Amazon to Pause Third-Party Delivery

Amazon is pausing its third-party delivery service to focus on shipping only orders placed by Amazon.com customers.

The e-commerce giant has made the decision to suspend its Amazon Shipping service, which operates separately from the company and is designed to ship products on behalf of clients who do not sell through Amazon’s marketplaces.

As a separate entity, Amazon Shipping involves drivers picking up packages from businesses and transporting them directly to customers. Available in some major metropolitan cities, including Los Angeles, the shipping service competes directly with FedEx and UPS.

According to The Wall Street Journal, which was the first to report the news, Amazon is in need of more manpower and capacity to deal with a spike in orders as coronavirus-panicked shoppers stock up on basic necessities, so the company is allocating more resources toward this part of the business.

Amazon’s move to pause its third-party delivery service is expected to deal a boost to both UPS and FedEx. The latter last year terminated its contract with Amazon after viewing the e-tailer as a threat due to its expanding shipping prowess. Amazon still relies on UPS and the U.S. Postal Service to handle a significant portion of its home deliveries, in addition to using its own drivers.

Amazon has already announced plans to hire an additional 100,000 new delivery and warehouse workers, as well as prioritize shipping household staples and medical essentials as the pandemic takes hold. The company informed consumers that, in the interim, it would be unable to get many packages shipped in the usual one or two days.

Due to its status as an essential retailer, Amazon has continued operating its warehouses, even in the states and localities that have been hit hardest by the coronavirus. According to meeting notes obtained by multiple news outlets, the Prime Day shopping extravaganza, typically held in July, is expected to be delayed until at least August.

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