Amazon is preparing to sharply reduce the number of packages it ships through the U.S. Postal Service, a move that could significantly impact the agency’s finances and operations.
According to reports, the e-commerce giant intends to cut its postal delivery volume by at least two-thirds by this fall, when its current contract with the Postal Service is set to expire. The company has already begun scaling back shipments as it evaluates its long-term logistics strategy.
The potential reduction poses a major challenge for the Postal Service, which has relied heavily on Amazon as its largest customer. Last year, USPS handled more than one billion Amazon packages, accounting for roughly 15 percent of its total deliveries nationwide and an even larger share in rural areas.
The agency has struggled financially for years, reporting a $9 billion net loss in fiscal 2025. Amazon’s consistent shipping volume has provided a key source of revenue, helping offset the costs of maintaining a nationwide delivery network.
Amazon’s decision comes amid a broader shift in its delivery strategy. The company has steadily expanded its own logistics network, delivering more packages independently and reducing reliance on third-party carriers. It now delivers more parcels annually than the Postal Service, marking a significant change in the competitive landscape.
The situation is further complicated by a new bidding process introduced by the Postal Service for its “last-mile” delivery services. Under the process, companies, including Amazon, must compete for contracts to use USPS for final delivery to customers. Amazon had previously sought to increase its shipping volume with USPS, but is now preparing alternative plans depending on the outcome of the bidding process.
If its bid is unsuccessful or reduced, Amazon could shift more deliveries to its own network or seek other partners. The final leg of delivery is often the most expensive, particularly in rural areas where the Postal Service has traditionally played a critical role.
For USPS, a steep decline in Amazon shipments could leave recently expanded facilities and equipment underused and force additional cost-cutting measures. The agency has already invested heavily in modernizing its parcel-handling infrastructure to accommodate growing package demand.
Source: WSJ