- Amazon's contract with the U.S. Postal Service expires in October 2026, and negotiations between the two have been taking place.
- The loss of Amazon could greatly harm the Postal Service, which relies on their package revenue.
- Amazon generated over $6 billion in annual revenue for the Postal Service this year, officials estimate.
The e-commerce giant Amazon is currently in discussions with the U.S. Postal Service and is making plans to potentially part ways with the mail agency.
On Thursday, The Washington Post reported that Amazon is working to expand its nationwide delivery network and could give up its long-standing partnership with the Postal Service.
According to The Washington Post, the move could “make the e-commerce giant the most ubiquitous delivery service in the country and wreak havoc on the postal agency’s long-term financial viability.”
New Postmaster General David Steiner plans to hold a reverse auction in early 2026 that might create more competition within the Postal Service for Amazon’s business by offering the highest bidder access to postal facilities rather than directly to Amazon. It would force the company to compete with national retail brands and regional shipping firms.
“Given the change of direction and the uncertainty it adds to our delivery network, we’re evaluating all of our options that would ensure we can continue to deliver for our customers,” Amazon said, per Reuters.
Amazon is the Postal Service’s top customer
For years, Amazon has been the Postal Service’s top customer, providing over $6 billion in annual revenue this year. That number would equate to roughly 7.5% of the Postal Service’s revenue in the past year.
Amazon’s founder, Jeff Bezos, also owns The Washington Post. Bezos has been in talks with the Postal Service over what the agency calls “negotiated service agreements,” that set rates and hasten delivery for its largest clients. Amazon had hoped to reach an agreement that would have cemented favorable rates and set higher benchmarks for package volume, but the formal talks have been concluded without a deal.
The Washington Post’s anonymous sources say Amazon is making plans to pull the billions of packages it sends through the Postal Service by the end of next year. The plans are not final and could change.
“We’ve continued to discuss ways to extend our partnership that would increase our spend with them, and we look forward to hearing more from them soon — with the goal of extending our relationship that started more than 30 years ago,” Amazon said in a statement, per Reuters. “We were surprised to hear they want to run an auction after nearly a year of negotiations, so we still have a lot to work through.”
The Postal Service has not yet commented on the report.
How the partnership between Amazon and the Postal Service works
Losing Amazon’s business could be a major blow to the mail agency, which has drawn more revenue from packages than paper mail in the last few years. The Postal Service has seen an 80% decline in first-class mail volume since 1997, per Reuters.
Building out its own delivery network would bolster Amazon’s standing in the parcel industry where it is already a major player.
In 2024, Amazon Logistics handled 6.3 billion parcels compared to the Postal Service’s 6.9 billion. The company is expected to overtake the Postal Service in parcels by 2028, a milestone that could be hit sooner if Amazon parts ways with the agency.
According to Reuters, the Postal Service’s partnerships with large shippers like Amazon are the backbone of its business model, in which its prime competitors send some packages through the agency and deliver others independently.
Amazon’s current contract with the Postal Service expires in October 2026. The company had originally sought a four-year extension of the contract.
The system has benefited both parties: It provides profit to the Postal Service while private-sector shippers offload shipments that would be more expensive to deliver on their own.