Amazon Cuts USPS Volume 20% in New Delivery Contract

Key Details Amazon has signed a new agreement with the U.S. Postal Service to deliver approximately 1 billion parcels annually, marking a significant 20% reduction in shipment volumes. This tentative contract replaces previous arrangements and represents a major shift in the logistics partnership between the e-commerce giant and the mail carrier. Why It Matters The deal provides critical ongoing revenue for USPS, which receives $6 billion annually from Amazon, its largest customer. However, the volume reduction compounds financial pressures on the Postal Service, which lost $9.5 billion in fiscal 2025 and faces potential cash shortages within the next year according to Postmaster General David Steiner. The Bigger Picture Amazon continues building its own delivery infrastructure, investing $4 billion in rural capabilities where USPS currently holds an advantage through its universal service obligation. Industry analysts predict Amazon could completely exit the USPS partnership by 2028 as it gains self-delivery capacity. Amazon has already surpassed USPS as America's largest domestic parcel carrier in 2025 and is reclaiming 50% of volume previously tendered to UPS. The company confirmed the new agreement supports its commitment to customers and communities nationwide.