Amazon, USPS renew pact

Amazon and the U.S. Postal Service have reached a new package-delivery deal after a month of very public brinkmanship. The core number is simple. USPS will keep about 80% of the Amazon volume it handles now, which Reuters reported is still more than 1 billion packages a year. That is a smaller role than before, but nowhere near the collapse that had been on the table in March, when Amazon was threatening to cut the Postal Service’s share by at least two-thirds (finance.yahoo.com). That matters because this was never just another vendor contract. Reuters reported that Amazon is USPS’s largest single customer and worth about $6 billion in annual revenue to the agency. USPS has an $80 billion budget and a worsening cash problem, so losing most of Amazon’s parcels would not have been a routine adjustment. It would have been a shock to the finances of a national institution that already says it could run out of money as soon as October or November if Congress does not act (finance.yahoo.com) (money.usnews.com). The fight started when USPS tried to change the rules of access to its own network. In December, the Postal Service announced that shippers large and small would be able to bid for access to more than 18,000 destination delivery units, the local facilities that make same-day or next-day last-mile handoff possible. That was a sharp break from the old model, where only a few huge customers had direct access. USPS presented the change as a way to monetize its network more aggressively. Amazon saw it as a threat to price certainty and capacity planning (about.usps.com) (supplychaindive.com). Amazon said so with unusual bluntness. In a March 18 post on its own site, the company said it had negotiated for more than a year, wanted to increase USPS volumes rather than reduce them, and needed a new contract locked down well before the old one expires on September 30, 2026. Amazon also said USPS had “walked away” from a near-finished renewal in December, forcing it to prepare alternative capacity. That is corporate language, but the underlying point is practical: you do not reroute hundreds of millions of packages on short notice without spending real money and making hard tradeoffs months in advance (aboutamazon.com). And Amazon has been spending. In April 2025, the company said it would invest more than $4 billion by the end of 2026 to expand delivery in small towns and rural America. That sounds like a plan to replace partners. It is not. Even now, after years of building out its own network, Amazon is still keeping USPS for the parts of the country where density is low, routes are long, and the economics punish anyone trying to do everything alone. PYMNTS, citing the Wall Street Journal, noted that Amazon still relies on USPS for many rural deliveries and that roughly 15% of USPS-delivered packages come from Amazon (aboutamazon.com) (pymnts.com). That is the real story inside the contract. The biggest retailer in the country built one of the largest private delivery systems in the world and still did not fully displace the Postal Service. The reason is not sentiment. It is geography. Rural delivery is expensive, fragmented, and full of edge cases. USPS already goes to every address. Amazon does not need to own every mile of that route to control the customer experience. It needs enough reach to handle dense corridors itself and enough flexibility to hand off the hard parts. This agreement leaves USPS with about 80% of its current Amazon work and, according to Reuters, more than 1 billion packages a year (finance.yahoo.com).