Amazon reaches a new agreement with the U.S. Postal Service to maintain 80% of its current parcel delivery volume

Amazon announced on Monday that it has reached a new agreement with the U.S. Postal Service (USPS) on parcel delivery. According to people familiar with the matter, the cash-strapped postal system will retain roughly 80% of its current delivery volume from its biggest customer.

For the USPS, a 20% reduction is far better than the Amazon threat reported last month to cut by two-thirds or even more.

The U.S. Postal Service warned last month that its funding could run out as early as October, and that Amazon could pose a threat to the USPS’s survival by replacing it with its own expanded delivery network or by enabling competitors.

According to sources, Amazon will continue to push forward with the expansion of its delivery network, but its coverage still cannot reach the same scale as the USPS’s address-by-address coverage model.

A person familiar with the matter said that the U.S. Postal Service’s budget is about $80 billion, while Amazon generates $6 billion in annual revenue for the agency.

In a statement, Amazon said: “We’re excited to have reached a new agreement with the U.S. Postal Service, which will further strengthen our long-term partnership and allow us to continue supporting our customers and communities together.”

U.S. Postal Service Postmaster General David Steinar said last December that the USPS delivers about 1.7 billion packages for Amazon each year.

Amazon previously criticized the USPS plan to auction off the right to use its “last-mile” delivery network. In April 2025, Amazon said it would invest more than $4 billion to expand its delivery network in rural areas of the United States by the end of 2026.

Last month, the U.S. Postal Service said it is seeking approval to temporarily raise priority mail and package delivery prices by 8%, effective April 26, in response to rising transportation and fuel costs.

In March, Steinar said raising the price of first-class mail stamps from the current 78 cents to 95 cents would help the USPS reduce losses.

Since 2007, the USPS has accumulated net losses of $118 billion, and its most profitable product—first-class mail—has seen delivery volumes fall to the lowest level since the late 1960s.

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Edited by Jian Yu SF069