Amazon.com Inc, the world’s biggest online retailer said it will stop competing with FedEx and UPS in the United States and will suspend a delivery service that aims to compete with these companies.
Amazon’s delivery service business, Amazon Shipping, will be suspended from June, according to a report from the Wall Street Journal.
According to the WSJ’s report, which cites sources familiar with the matter at hand, Amazon is suspending the service since it needs people and capacity to handle a surge in its own customers’ orders.
“We regularly look at a variety of factors across Amazon to make sure we’re set up in the right way to best serve our customers,” said a spokesperson from Amazon confirming the halt in its delivery service.
Amazon Shipping is available in select U.S. cities, including Los Angeles, and handles non-Amazon and Amazon marketplace packages.
In the United States, Amazon.com is facing a surge in demand with most residents in many cities ordered to stay at home in order to break the spread of the coronavirus that started in Wuhan China and which sweeping around the globe.
The development comes in the wake of Amazon stating in march that it would hire 100,000 warehouse and delivery workers in the United States to deal with a surge in online orders.
With the news reaching the market, shares of FedEx and UPS rose by 2% in extended trading.