Amazon has reached a new agreement with the U.S. Postal Service that will keep roughly 80% of the e‑commerce giant’s current parcel deliveries with the agency, preserving more than 1 billion packages a year and sustaining a major revenue stream for the cash‑strapped mail carrier, company and sources told Reuters on Monday.
The arrangement, announced April 6, keeps Amazon — USPS’s single largest commercial customer — from shifting most of its parcel volume into its own delivery network. Two people familiar with the business arrangement told Reuters Amazon’s retained volume will translate into about $6 billion in annual revenue for the Postal Service. That figure is significant for an agency operating with an approximately $80 billion budget and grappling with rising costs and ongoing financial pressure.
“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 said in a statement. The company did not disclose commercial terms beyond confirming the new deal.
The pact follows months of tensions over USPS proposals to auction access to parts of its last‑mile delivery network — a move Amazon had publicly criticized. Reuters reported last month that Amazon had warned it would cut its business with the Postal Service by at least two‑thirds if the auction plan went forward, a shift that would have posed an acute threat to the agency’s finances and operations. Amazon had also been developing and expanding its own delivery capabilities, raising concerns inside and outside government about the competitive impact on the USPS.
USPS did not immediately comment on the agreement. Details such as the length of the deal, pricing, and operational changes were not disclosed in the initial reporting. Sources said the new arrangement will retain the bulk of current deliveries routed through the Postal Service rather than reallocating them to Amazon’s in‑house networks or other carriers.
Analysts and postal observers have warned that losing a major customer like Amazon could have cascading effects for the Postal Service, reducing revenue available to fund operations and maintain universal service obligations. Conversely, a continuing relationship preserves a steady, sizable income stream and allows both parties to plan around an established volume of parcel traffic during a period when package delivery remains a core growth area for postal agencies worldwide.
The agreement appears to de‑escalate a potentially far‑reaching confrontation between the nation’s dominant online retailer and a federal mail agency that handles a wide array of public and commercial services. Implementation and whether the deal alters the USPS auction plans or Amazon’s longer‑term logistics strategy remain to be seen, pending additional announcements from either party.