The US Postal Service and Amazon have agreed on a scaled-back delivery deal that will reduce the package volume handled by USPS from its biggest customer by about 20 percent, according to Reuters.
While the reduction is significant, it is still less severe than the two-thirds cut previously reported by the Wall Street Journal in March. Amazon said it was pleased to have reached a new agreement that would extend the long-running partnership and continue supporting customers and communities together. USPS had not commented as of Tuesday morning.
The agreement brings an end to a difficult negotiation process between the two companies. Although Amazon has invested heavily in its own delivery infrastructure, it still depends on USPS for broad national reach, particularly in harder-to-serve areas, and has reportedly spent more than US$5 billion a year with the agency in recent years.
The relationship became strained in December when negotiations over a renewed agreement broke down. Amazon later said it had hoped to increase its USPS volume, but that the Postal Service had stepped away unexpectedly. In the same period, USPS launched a bidding process for customers to compete for last-mile facility capacity, prompting Amazon to reassess alternatives and warning that trust had been damaged.
Despite the tensions, the new agreement gives both sides a measure of stability. For USPS, it avoids a more severe loss of volume at a time of financial pressure, although the agency will still need to find new ways to grow revenue, including attracting higher-value parcels or building on its last-mile capacity programme. For Amazon, the reduced arrangement means more package volume will move through its own network, which has been expanding steadily, including in rural markets. In 2025, Amazon overtook USPS as the largest parcel delivery provider by volume, according to ShipMatrix.
