Amazon is preparing to reduce its reliance on the U.S. Postal Service (USPS) as contract negotiations between the two sides have stalled, raising questions about how millions of ecommerce orders will be delivered.
In a March 18 statement, Amazon said it had sought to expand its use of USPS but that the agency “abruptly walked away” from negotiations in December. The current agreement expires Sept. 30, 2026.
Amazon ranks No. 1 in Digital Commerce 360’s Top 2000 Database. The database is how Digital Commerce 360 tracks the largest North American online retailers by their annual ecommerce sales.
Amazon is also No. 3 in Digital Commerce 360’s Global Online Marketplaces Database. That database ranks the 100 largest such marketplaces by third-party gross merchandise value (GMV).
Amazon contract with USPS
Amazon said it has spent more than $5 billion annually with USPS in recent years through its current contract. That highlights the postal service’s role in handling last-mile delivery, particularly in residential and rural areas. Amazon said it has submitted a bid under USPS’ new auction-based pricing system but is preparing to shift volume if the organizations do not reach a new agreement.
USPS currently delivers about 1.7 billion Amazon packages each year, according to Reuters. Any reduction in that volume would affect capacity and pricing across the broader ecommerce delivery market.
The contract dispute comes as USPS transitions to a competitive bidding model that allows multiple shippers to compete for access to its delivery network. The change is expected to introduce more variable pricing into last-mile delivery, particularly for high-volume ecommerce shippers.
Amazon has been expanding its internal logistics network for several years, building out fulfillment centers, sortation hubs and its own delivery capacity. A shift away from USPS would further that strategy, giving Amazon more control over delivery speed, cost and service levels.
For ecommerce operators, the potential shift could tighten delivery capacity and increase costs, especially in rural markets where USPS has traditionally provided broad, low-cost coverage. It could also accelerate a move toward more dynamic, bid-based pricing for last-mile services.
Amazon has not said it will fully exit its USPS relationship, but its contingency planning points to a more diversified approach to ecommerce fulfillment as it looks to manage costs and maintain delivery performance.
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