Amazon and the U.S. Postal Service have reportedly come to a tentative agreement regarding package handling, backing away from a potential standoff that could have seen the online retailer cut its shipping volumes by two-thirds.
The new arrangement involves a more gradual 20 percent reduction in volume, sources familiar with the matter told The Wall Street Journal.
This deal follows a period of friction between the two entities, during which Amazon had weighed a significant scale-back of its partnership with the national mail carrier.
The agreement is currently pending review and approval by the Postal Regulatory Commission, the federal agency that oversees USPS operations. Even with the planned reduction, the Postal Service is still on track to deliver more than 1 billion packages for Amazon each year.
The financial stakes are high for the USPS, which has come to rely on the consistent revenue provided by Amazon’s massive shipping scale. As the agency’s biggest customer, Amazon was responsible for nearly 15 percent of all USPS deliveries last year, representing approximately $6 billion in revenue for the service.
“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,” an Amazon spokesperson told the outlet.
The USPS has not yet commented on the matter.
The agreement addresses potential logistical challenges for both parties. While a 66 percent cut would have been a major financial blow to the USPS, it would have also left Amazon in a difficult position.
The retailer remains heavily dependent on the Postal Service for last-mile deliveries, particularly in rural areas. Even as Amazon has been growing its own delivery network in these regions, the WSJ reported that the company would have struggled to find enough alternative capacity on such short notice.
The change in direction follows a new bidding process launched last December by Postmaster General David Steiner, aimed at establishing the true market value of the agency’s last-mile services. It was during this period that Amazon suggested the steeper 66 percent cut and began exploring options with smaller, independent carriers.
However, sources said the Postal Service decided to re-engage directly with Amazon after the projected revenue and volume from other bidders didn’t meet the agency's needs.
The USPS has faced persistent financial struggles for the better part of two decades, reporting a net loss of $9 billion for the 2025 fiscal year.
Amazon’s approach to shipping has shifted as it builds out its own logistics infrastructure. While the company once relied almost entirely on partners like FedEx and UPS, it has increasingly become a competitor to them.
Although FedEx resumed some large-scale deliveries for Amazon last year, many private carriers are still wary of becoming too dependent on a company that is both their largest customer and a primary rival.
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