Amazon is actively evaluating the termination of its long‑standing contract with the United States Postal Service (USPS), a deal that is set to expire on October 1 2026. The agreement currently obligates Amazon to pay more than $6 billion a year—about 7.5 % of USPS’s total revenue—making it the postal service’s largest and most profitable customer.
USPS has been in a financial tailspin for years. In fiscal year 2024 the carrier posted a $9.5 billion net loss, up from a $6.5 billion loss in FY 2023, and cumulative deficits have surpassed $100 billion since the mid‑2000s. The Postal Service’s “Delivering for America” reform plan seeks to modernize operations, but the loss trend underscores the urgency of any new revenue streams.
Amazon’s logistics footprint has grown rapidly. The company handled 6.3 billion parcels in 2025, just behind USPS’s 6.9 billion, and has pledged more than $4 billion to expand its rural delivery network by 2026. Amazon’s partnership with USPS dates back to 2013, when the two entered a negotiated service agreement for Sunday parcel delivery, and has since evolved into a multi‑year, multi‑service arrangement that covers last‑mile delivery in rural areas.
Negotiations between the two sides have stalled, with USPS proposing a reverse‑auction model that Amazon has rejected. The dispute centers on pricing, volume commitments, and the allocation of delivery resources. Amazon’s move reflects its broader strategy of vertical integration, aiming to gain full control over last‑mile logistics, reduce dependency on external carriers, and improve delivery speed and reliability for its growing e‑commerce and Prime businesses.
If Amazon exits the USPS contract, the postal service would lose a critical revenue source, potentially accelerating its financial decline and forcing it to accelerate its reform agenda. For Amazon, the shift could accelerate its goal of overtaking USPS in parcel volume by 2028, strengthen its competitive position against UPS and FedEx, and free capital for further investment in its own network.
The outcome remains uncertain. While Amazon has signaled a willingness to end the contract, both parties are still in negotiations, and a final agreement could still be reached. Investors and industry observers will watch the next few weeks for a definitive resolution.
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