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Amazon is planning to sharply cut the number of packages it ships through the U.S. Postal Service, a move that could cost the agency millions of dollars in much-needed revenue.
The e-commerce giant, long the Postal Service’s biggest customer, has already begun ratcheting down its postal volume and wants to reduce it by at least two-thirds by this fall, when its current contract with the agency expires, according to people familiar with the matter.
USPS delivered more than a billion packages for Amazon last year, close to 15% of all the packages that the Postal Service delivered in the country. Amazon’s guaranteed volumes have been a source of stability for the agency, which has operated at a loss for most of the past two decades. In fiscal 2025, it reported a net loss of $9 billion.
The Postal Service has expanded its parcel-delivery capacity in recent years, building bigger facilities and buying new machines to process boxes, which replaced aging equipment that focused on letter mail. If the decline in volumes from Amazon isn’t adequately managed, the new equipment and facilities could end up being underutilized. The Postal Service may also have to find more ways to cut costs.
According to people familiar with the matter, Amazon disclosed the plan to the Postal Service in a confidential bidding process for its so-called last-mile delivery service, in which USPS handles the last leg of delivery for businesses. Under new Postmaster General David Steiner, the Postal Service solicited bids from Amazon and other businesses for the service for the first time. Steiner has said the bidding will help the quasigovernmental agency determine the true market value of the last-mile service.
Amazon’s existing contract with the Postal Service expires in October. Results of the last-mile bidding competition will be released in the second quarter, and contracts will be finalized by the end of the third quarter. That left Amazon concerned that it would have little time to make changes to its network if its bid weren’t accepted, the people said.
