Amazon Defends Its Position Regarding USPS Shipping Cutbacks
In response to a report by the Wall Street Journal, Amazon has found itself in a defensive position to clarify its stance regarding the United States Postal Service (USPS). The report suggested that the e-commerce giant was contemplating a reduction in its shipments with the USPS, an entity that has recently declared its financial crunch. Amazon, on Wednesday, released a comprehensive statement explaining that it did not intend to reduce its USPS shipments, and the negotiations were only halted when the USPS unexpectedly backed out from discussing a new contract.
Amazon’s Plan to Reduce USPS Packages
According to the Wall Street Journal, Amazon has a strategic plan to reduce the volume of packages sent through USPS by at least two-thirds by this fall, approximately the same time its contract with the independent federal agency is set to expire. Amazon maintains that it has been in talks with USPS for over a year to secure a deal that could potentially generate billions in revenue for them. However, USPS, in a surprising turn of events, pulled out of the negotiations in the last phase in December last year.
Amazon, USPS, and Last-Mile Deliveries
Despite Amazon investing billions in creating a comprehensive network of delivery and logistics services, it continues to rely on USPS for last-mile deliveries, particularly in remote areas. The Wall Street Journal reports that USPS currently manages about 30 to 40 percent of Amazon’s deliveries to more isolated regions where shipping costs are significantly high. USPS is mandated to deliver six days a week to these areas. However, the USPS has stopped negotiating discounted rates for large shippers like Amazon individually, which, along with the delivery mandate, has created a significant financial burden on USPS.
USPS’s New Bidding Process
In an attempt to increase its revenue, USPS introduced a new bidding process for last-mile deliveries. Postmaster General David Steiner, in an interview with Reuters last year, expressed his concern over the financial health of USPS, stating that if things continue as they are, USPS could be out of funds within a year. This led to the decision to test the market for a fair price.
USPS’s Request for Increased Borrowing Authority
During a hearing on Tuesday, Steiner reiterated that USPS would run out of money in less than a year if Congress does not permit it to borrow more money and increase the price of shipping. He told the New York Times that increasing the USPS’s borrowing authority would buy it some time to determine the best course of action to serve the American public.
Amazon’s Bid under the New Auction Concept
Amazon stated that it had repeatedly asked Steiner for engagement but received no response to the bid it had submitted in February 2026. The company submitted a bid under USPS’s new auction concept, expressing hope to continue the partnership, albeit at a reduced level. However, Amazon also clarified that it would prepare to meet its customers’ delivery needs, regardless of the auction’s outcome.
The Future of Amazon-USPS Relationship
Steiner told Reuters that USPS delivers about 1.7 billion Amazon packages each year. He expressed his wish to continue the agency’s relationship with Amazon but at a fair price. USPS has not yet responded to a request for comment on this matter.
Source: Here
