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Amazon has reportedly cut ties with FedEx for the holiday season calling the delivery service ‘too slow’.

As reported by the Wall Street Journal, Amazon is blocking third-party sellers from using FedEx services, citing a decline in their performance.

According to Amazon, the ban will prevent third-party sellers from using FedEx’s Ground and Home services ‘until the delivery performance of these ship methods improves’.

Instead, Amazon is asking third-parties to use FedEx’s faster, and more expensive, Express service.

FedEx claims the ban will limit options for small businesses, despite it only impacting a small number of distributors.

‘The overall impact to our business is minuscule,’ a FedEx spokeswoman said.

It follows the termination of two major shipping contracts between the two companies, which totalled US$900 million.

According to the WSJ, FedEx is shipping its focus to retailers such as Walmart and Target to compete with Amazon.

Amazon had already ceased using FedEx for its own US deliveries prior to the decision, and according to Morgan Stanley, the company already ships close to half of its packages in the US by itself.

The firm is also predicting Amazon to launch its own third-party shipping option to compete with delivery businesses like FedEx.

According to General manager of parcel and express services at Australia Post, Ben Franzi, ‘speed is really starting to be one of the battlegrounds for eCommerce’.

In Australia, AusPost and eBay have teamed up to compete with Amazon Prime’s next day delivery by offering online retailers storage, ‘pick and pack’ and delivery service.

Under a new business called Fulfilio launched at the beginning of the year, AusPost, in partnership with eBay, will now warehouse and ship orders on behalf of online businesses.

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