US Postal Service Reaches Tentative Agreement with Amazon on Package Delivery Volumes

U.S. Postal Service (USPS) and Amazon have reached a tentative agreement on package handling, according to sources familiar with the matter cited by The Wall Street Journal. The deal involves a 20 percent reduction in Amazon's shipping volumes with USPS, down from a previously considered 66 percent cut.

This arrangement follows negotiations initiated after Amazon explored scaling back its partnership with the postal service. The agreement requires review and approval by the Postal Regulatory Commission, which oversees USPS operations. Even after the reduction, USPS expects to deliver more than 1 billion Amazon packages annually.

Amazon represented nearly 15 percent of USPS deliveries in the previous year, contributing approximately $6 billion in revenue.

The talks stemmed from a bidding process launched in December by Postmaster General David Steiner to determine the market value of USPS last-mile services.

During this period, Amazon proposed the 66 percent volume reduction and considered options with smaller independent carriers. USPS re-engaged directly with Amazon after bids from other carriers failed to meet the agency's revenue and volume requirements. USPS has reported financial losses for much of the past two decades, including a $9 billion net loss for fiscal year 2025.

The postal service relies on Amazon as its largest customer for consistent revenue from package deliveries. The agreement addresses logistical needs, as Amazon depends on USPS for last-mile deliveries, especially in rural areas where alternatives are limited.

“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.”

" — Amazon spokesperson (The Wall Street Journal) USPS has not issued a comment on the agreement. Amazon has expanded its own delivery network, reducing reliance on partners like FedEx and UPS, which have expressed concerns about depending on a competitor. FedEx resumed some Amazon deliveries last year, but many carriers remain cautious about volume commitments.

The deal occurs amid competition in the shipping industry, where Amazon increasingly handles its own logistics. For USPS, the partnership provides essential revenue amid ongoing financial challenges. Approval by the Postal Regulatory Commission will determine the next steps for implementation.