Amazon and the U.S. Postal Service (USPS) have reached a tentative agreement that will see a 20 percent reduction in USPS deliveries for the e-commerce giant, according to The Wall Street Journal. This comes after Amazon initially threatened a much larger cut of up to two-thirds earlier this year. While the new deal isn’t as severe as initially feared, the reduced volume will still impact the USPS financially.
An Amazon spokesperson expressed satisfaction with the outcome, telling the WSJ, “We’re pleased to have reached a new agreement with USPS that furthers our longstanding partnership and will let us continue supporting our customers and communities together.”
Amazon holds the title of the USPS’s largest customer, contributing 15 percent of its total volume and generating $6 billion in revenue. A two-thirds reduction would have been catastrophic for the Postal Service. Even a 20 percent cut, however, could result in over $1 billion in lost revenue for the USPS. Amazon also relies heavily on the post office for deliveries to rural areas and the crucial “last mile.”
The original contract between Amazon and USPS was set to expire in September 2026. Amazon had aimed to finalize a new deal by December 2025. However, Amazon stated that the USPS unexpectedly withdrew from negotiations in December, opting instead for a new bidding process for last-mile deliveries. “Our goal was to increase our volumes with USPS, not reduce them — until USPS abruptly walked away at the eleventh hour in December,” Amazon previously said.
Reports suggested Amazon was exploring an expansion of its own delivery network if a deal with USPS failed. Some speculate Amazon may have circulated these rumors to push the negotiations forward. The Postal Service eventually re-engaged with Amazon after bids from competing companies did not meet its expectations for volume and revenue, as reported by the WSJ’s sources. The federal Postal Regulatory Commission still needs to approve this new agreement.
