Amazon considers ditching USPS partnership - reports

(Sharecast News) - Amazon is considering a major overhaul of its US delivery operations that could end its longstanding partnership with the US Postal Service and shift billions of parcels into its own expanding logistics network. The move was revealed in a report from the Washington Post, which is owned by Amazon founder and executive chairman Jeff Bezos.

It followed the collapse of negotiations over a new service agreement, raising the prospect of Amazon withdrawing from America's federal postal system when its current contract expires in October 2026.

Amazon is currently the Postal Service's largest customer, providing more than $6bn of business in 2025, equivalent to roughly 7.5% of USPS revenue.

Those deliveries had been a crucial source of income for the financially strained agency, which had posted multibillion-dollar annual losses as traditional mail volumes declined.

Losing Amazon's shipments would be a significant blow to USPS, which had reportedly struggled to offset falling first-class mail volumes and faces heightened political scrutiny.

Talks were apparently centred on renewing negotiated service agreements that secure preferential terms for major shippers, but discussions concluded without a deal.

The impasse followed plans by new postmaster general David Steiner to run a reverse auction in 2026, offering postal facility access to the highest bidder rather than guaranteeing Amazon continued priority.

That would open competition to national retailers and regional carriers, marking a shift in USPS strategy and, according to Amazon, injecting new uncertainty into its delivery operations.

Amazon said it was "surprised" by the change in direction and is now evaluating alternatives to ensure it can continue serving customers.

While the company had not formally committed to ending the relationship, it had invested heavily in expanding its logistics footprint, including last-mile delivery services and rural distribution.

Amazon Logistics already handled 6.3 billion parcels last year, approaching the 6.9 billion processed by USPS, and analysts expect Amazon to overtake the agency as the country's largest parcel carrier within a few years.

At 1107 ET (1607 GMT), shares in Amazon were down 2.26% in New York at $227.13.

Reporting by Josh White for Sharecast.com.