Amazon announced on Monday that it has reached a new agreement with the U.S. Postal Service on package deliveries.
Ending months of uncertainty over the future of one of the most consequential commercial relationships in American logistics.
The deal averts what had been a threatened two-thirds reduction in shipment volume, with sources telling Reuters that Amazon will instead retain around 80% of its existing delivery volume with USPS, or more than 1 billion packages per year.
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From Breakdown to Breakthrough
The agreement caps a turbulent period in the Amazon-USPS relationship. In March, The Wall Street Journal reported that Amazon planned to slash its USPS shipping volume by at least two-thirds by the fall, when the existing contract expires on September 30, 2026. Amazon had publicly accused USPS of walking away from more than a year of good-faith negotiations “at the eleventh hour” in December 2025, after the agency pivoted to a competitive reverse-auction model for last-mile delivery access under Postmaster General David Steiner.
Amazon said at the time that it had submitted a bid in February under the new auction system but received no response, forcing it to prepare contingency plans. Meanwhile, Steiner warned a U.S. House committee in March that USPS could run out of cash within a year without congressional intervention, with the potential loss of Amazon’s business compounding the agency’s financial distress.
What the Deal Means
The new arrangement results in roughly a 20% decrease in Amazon’s USPS shipments rather than the far steeper cuts that had been anticipated. Amazon, which is USPS’s largest single customer, expressed satisfaction with the outcome, emphasizing the continuation of a partnership that has spanned more than three decades.
The deal carries major implications for the Postal Service’s finances. The existing contract has been estimated to generate roughly $6 billion annually for USPS, or about 7 to 8% of its total operating revenue. Even a 20% volume reduction represents a notable hit, but it is far less damaging than the two-thirds cut that had been on the table.
A Shifting Landscape
The agreement comes as the balance of power in U.S. package delivery continues to shift. Amazon’s logistics arm delivered 6.7 billion packages in 2025, narrowly surpassing USPS’s 6.6 billion to become the top U.S. parcel carrier by volume, according to shipping consultancy ShipMatrix. UPS and FedEx trailed with 4.4 billion and 3.6 billion packages respectively.
Even as it secures a continued USPS partnership, Amazon has invested heavily in its own delivery network, including a $4 billion expansion focused on rural and small-town communities. That dual strategy — maintaining carrier partnerships while building proprietary capacity — leaves Amazon positioned to absorb further shifts in the logistics landscape as the new contract takes effect later this year, writes Perplexity.
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