A shift in the United States Postal Service's approach to managing its shipping collaborations has prompted Amazon to seek other options. The e-commerce giant is expected to slash its package volume sent via USPS by no less than two-thirds starting later this year, following the postal agency's abrupt halt to talks in favor of a competitive bidding system.
The Wall Street Journal disclosed on Tuesday that Amazon intends to scale back the parcels it routes through USPS. In the previous year, Amazon represented almost 15 percent of the Postal Service's total package handling. Such a steep cut would erode a key steady income stream for USPS, which posted a $9 billion deficit for fiscal 2025.
Amazon's existing agreement with USPS expires on September 30. Responding publicly to the Journal's report, Amazon noted that it informed the postal service back in October 2025 of the need to finalize a fresh contract by December. The firm emphasized that ramping up for hundreds of millions of additional packages demands substantial upfront spending, extended facility development, recruitment efforts, and supply chain alignment.
From Amazon's perspective, USPS terminated discussions right at the deadline. The company stated that it had engaged in sincere discussions with USPS for over 12 months, aiming for an arrangement that could deliver billions in earnings, and felt progress toward closure. Amazon's intention was to boost its usage of USPS services rather than decrease it, but the postal agency suddenly backed out in December at the final moment.
This development coincided with Postmaster General David Steiner's introduction of a revised procurement method for final-delivery services, supplanting the prior model of direct talks with carriers. Steiner called it an equitable competition that allows the market to determine optimal combinations of regional delivery features at volume-based rates. He assumed the role in May 2025, succeeding previous leader Louis DeJoy.
Amazon indicated it entered a proposal under the updated framework in February but has yet to receive any feedback. The firm remarked that this situation generates considerable ambiguity for its future operational strategy. Nevertheless, Amazon affirmed its earnest involvement by lodging a bid in February 2026, though no reply has come.
USPS anticipates revealing the outcomes of the bidding in the second quarter of 2026, with agreements set to conclude in the third quarter. Even as it advances with backup strategies, Amazon expressed ongoing willingness to sustain the collaboration.
On the same day, Postmaster General Steiner urged lawmakers to ease restrictions on USPS and permit fee hikes. He cautioned a congressional panel that the organization could exhaust its funds within roughly one year, requesting an expansion of its existing $15 billion borrowing limit. Additionally, he sought authority to adjust stamp rates upward and overhaul commitments to retiree benefits.