Amazon is on the defensive after a report from wall street journal revealed the ecommerce giant is planning to cut shipments with the United States Postal Service, which said this week it was running out of money. In a lengthy statement published Wednesday, Amazon says it did not want to reduce shipments with the USPS, and that talks only stopped after the USPS “abruptly walked away” from negotiations for a new contract.
As reported WSJAmazon plans to cut packages shipped through the USPS by at least two-thirds by this fall, around the time its contract with the independent federal agency is set to expire. Amazon claims it has been working on a deal with the USPS for more than a year “that would bring them billions in revenue,” but the agency walked out at the “eleventh hour” during negotiations last December.
Even though Amazon invests billions in building a vast network of delivery and logistics services, it still works with the USPS for last-mile delivery – or the last leg of a shipment – especially in rural areas. WSJ says the USPS currently handles about 30 to 40 percent of Amazon deliveries in more remote locations, where shipping costs are higher, and where the USPS is mandated to make deliveries six days per week. But while big businesses like Amazon reportedly get discounted rates on shipping with the USPS, the agency is no longer negotiating with businesses individually, according to WSJ. The delivery mandate, along with discounted rates for large shippers, has dealt a blow to USPS’s finances.
As part of efforts to increase revenue, the USPS implemented a new bidding process for last-mile delivery. Postmaster General David Steiner said, “There’s only one thing I’m absolutely confident about – if we keep doing things the way we’re doing them today, we’ll be dead in about a year, and so I have to go out and test the market at this price to see if it’s a fair price.” told reuters Last year.
During a hearing Tuesday, Steiner reiterated that the USPS will run out of money in less than a year if Congress doesn’t allow it to borrow more cash and raise the price of postage. Steiner said, “One simple step, increasing our borrowing authority, gives us time… time that we can use to determine what the Postal Service should do to best serve the American public.” the new York Times.
Amazon says it has “repeatedly requested engagement” with Steiner, and the company “has received no response” to a bid submitted in February 2026. “We have submitted a bid as part of their new auction concept and we hope to continue our partnership, albeit at a reduced level,” Amazon’s statement said. “However, without long-term certainty, we now have to be prepared to meet the delivery needs of our customers regardless of the outcome of the auction.”
steiner told reuters The USPS delivers approximately 1.7 billion Amazon packages every year. He said he would “love to continue” the agency’s relationship with Amazon but “at a reasonable price.” USPS did not immediately respond to a request for comment.
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