Amazon has reached a new agreement with the U.S. Postal Service (USPS) regarding package deliveries, a move that will allow USPS to retain about 80% of its existing deliveries from Amazon. This agreement is crucial as Amazon represents $6 billion in annual revenue for USPS, which has been struggling with significant financial losses.
Under the terms of the deal, USPS will continue to deliver approximately 1.7 billion packages annually for Amazon. This arrangement comes after Amazon previously threatened to cut USPS deliveries by two-thirds, a reduction that could have resulted in more than $1 billion in lost revenue for the postal service.
The urgency of this agreement is underscored by USPS’s financial situation, which has reported net losses of $118 billion since 2007. The contract between Amazon and USPS was set to expire in September 2026, prompting both parties to negotiate a new deal to secure their ongoing partnership.
In a statement, an Amazon spokesperson expressed satisfaction with the new agreement, stating, “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.” This sentiment reflects the importance of the collaboration for both entities.
USPS had warned last month that it could run out of cash as soon as October, highlighting the critical nature of maintaining revenue streams. Additionally, Amazon had criticized USPS’s plans to auction off access to its last-mile delivery network, which could have further complicated their relationship.
While the new agreement secures a significant portion of USPS’s delivery volume, uncertainties remain regarding the long-term implications of this deal and how it may affect future negotiations. Details remain unconfirmed.
