.webp)
E-commerce giant and U.S. Postal Service agree on new terms, averting existential threat to cash-strapped mail carrier and securing longstanding logistics partnership.
In a new deal reached between Amazon and the U.S. Postal Service regarding package delivery, Amazon guarantees the mail service 80% of its current shipment contracts. This is a major breakthrough for the United States Postal Service, since it would have experienced massive financial losses if Amazon shifted all of its shipment operations elsewhere. The package delivery contract saves USPS from a potential two-thirds loss of Amazon business.
The USPS earns about $6 billion every year from Amazon, making this an important source of income for the financially challenged USPS. As noted by U.S. Postmaster General David Steiner, USPS delivers about 1.7 billion Amazon packages each year. The deal comes amid warnings by USPS that it would run out of money by October without any change in its operations.
"USPS has been and will always be a critical partner as we expand the convenience of same-day delivery for millions of customers, and this new package delivery agreement ensures the relationship continues," said Amazon in a statement. The company reiterated that it was committed to ensuring that its package delivery operation continued while selectively expanding its rural delivery network.
USPS has considered several approaches for covering costs, among which is the application for a raise in price by 8% for priority mail and packages from April 26, 2026. Furthermore, the Postmaster General Steiner suggested raising the price of first-class stamps to 95 cents, while currently, it is 78 cents. Such actions aim to offset USPS' overall losses of $118 billion since 2007, mainly due to the reduced number of first-class letters.
Amazon was planning to invest over $4 billion into extending its rural delivery network in the United States by the end of 2026, but now the new USPS contract will moderate such plans. Business Honor notes that this partnership preserves critical logistics capacity for both organizations while addressing USPS's financial pressures.
- Sandra Kelembeth
.webp)
