Amazon-USPS Deal Cuts Packages by 20%

Amazon and the U.S. Postal Service have finalized a tentative agreement that will reduce the number of packages Amazon ships through the postal service by 20 percent, preserving the bulk of their longstanding delivery partnership while addressing ongoing financial pressures on the agency.

The deal, reached after months of tense negotiations, ensures that the USPS will continue handling approximately 80 percent of Amazon's existing package volume, or more than 1 billion packages annually. This outcome falls short of Amazon's earlier threats to slash deliveries by as much as two-thirds, a move that could have severely disrupted the postal service's operations. Sources familiar with the matter indicated the agreement provides stability for both parties, with Amazon maintaining access to the USPS's extensive rural and last-mile delivery network while gradually expanding its own infrastructure.

Negotiations intensified last year when Amazon's contract with the USPS, set to expire in September 2026, came up for renewal. In December, the postal service abruptly withdrew from direct talks and introduced a competitive bidding process for its last-mile delivery services, opening access to...