Amazon cuts USPS shipments in major shift

Amazon is preparing to significantly reduce the number of packages it ships through the United States Postal Service, following a breakdown in contract negotiations between the two long-time partners.

According to a source familiar with the discussions, the company aims to cut its USPS shipping volume by at least two-thirds by September, when the current agreement expires. The move marks a major shift in Amazon’s delivery strategy, as the postal service has historically been one of its key logistics partners, News.az reports, citing Reuters.

Amazon and USPS have spent over a year trying to reach a new agreement. However, both sides now appear far apart.

Amazon claims it negotiated in good faith and was close to finalizing a deal that could have generated billions in revenue for USPS. The company says negotiations fell apart suddenly when USPS introduced an auction model for its delivery network.

USPS, on the other hand, insists talks are still ongoing. Postmaster General David Steiner said he could not predict the outcome, citing confidentiality, but confirmed discussions have not fully ended.

The dispute comes at a difficult time for USPS, which is dealing with serious financial challenges. Officials warn the agency could run out of cash within 12 months—or even sooner—if it meets required retirement obligations.

To raise funds, USPS has launched an auction process, offering access to its vast “last-mile” delivery network, including more than 18,000 local delivery units and processing centers across the country.

This new approach has created uncertainty for major partners like Amazon.

Despite the disagreement, Amazon says it is ready to adapt. The company has already submitted a bid in the USPS auction but is also preparing to meet customer demand independently if needed.

Last year, Amazon announced plans to invest more than $4 billion to expand its U.S. rural delivery network, aiming to improve delivery speeds in small towns and less densely populated areas.

Even if cooperation continues, the partnership is expected to shrink significantly.

If Amazon follows through with its plan, the impact could be substantial:

• USPS may lose a major share of its package volume

• Amazon will gain more control over its logistics network

• Delivery competition in the U.S. could intensify

The outcome of the USPS auction—and whether the two sides can still reach a partial agreement—will determine how deep the split ultimately becomes.

News.Az 

By Aysel Mammadzada