Amazon plans to hit pause in June on its Amazon Shipping service that competes directly with FedEx and UPS, the Wall Street Journal is reporting, diverting workers to over-maxed fulfillment operations for its own business.
Amazon Shipping is only active in a few cities. The company is working with shippers to limit the amount of disruption this decision will cause. At the same time, investor interest in FedEx and UPS soared on the news as the change will bring more business their way.
That said, both major carriers have been slammed themselves by surging ecommerce demand as well as logistics support for the federal coronavirus response. FedEx and UPS have both suspended their service guarantees in light of the ongoing outbreak, while FedEx has also added surcharges on global shipments.
Amazon would not say how widespread the service is, how many shippers are using it or what plans they have to restart it, Forbes reported. It began in 2018 with a test in Los Angeles and has expanded to at least Chicago and New York.
In other news, the ecommerce giant continues to face heat from Democratic senators demanding answers on the firing of a Staten Island, NY worker who organized a walkout last week over safety conditions there. Amazon has said the worker was fired for breaking a mandated quarantine for COVID-19 exposure by coming to the walkout rally. Another walkout there was staged this week.
According to the New York Times, Amazon workers have tested positive for COVID-19 at 50 of its U.S. facilities, further straining its ability to handle massive demand, including grocery demand reportedly more than 50x normal.
For instance, an Amazon fulfillment center outside Louisville, KY, which reopened last week after a COVID-19 exposure, was forced to shut down yet again due to several new cases.