Amazon halts new delivery service to focus on demand surge

Amazon.com Inc (AMZN.O) will suspend its shipping services in major U.S. cities on Wednesday.

Amazon Shipping carries non-Amazon and Amazon marketplace packages. Amazon is suspending this particular service which was set up to compete with UPS (UPS.N) and FedEx (FDX.N) in the United States.

“Amazon Shipping will be paused starting June,” according to the Wall Street Journal.

Amazon is suspending its slated shipping services after its regular delivery service reached its maximum limit. The company started to lack people and the 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,” an Amazon spokesperson said in a statement.

“The suspension of Amazon Shipping will allow the company to focus on its core delivery operation,” said Trevor Outman, the founder, and co-CEO of Shipware LLC.

UPS and FedEx shares jumped 2% in extended trading following this development.