Amazon Eyes Deliveries

Amazon's Breakup With the Post Office Could Reshape American Delivery Forever The world's largest e-commerce company is quietly preparing for what could be the most significant shift in American package delivery since the internet age began. Amazon is preparing to expand its nationwide delivery network and give up its long-standing partnership with the U.S. Postal Service as talks stall with the mail agency, according to three people with knowledge of the matter, a move that could make the e-commerce goliath the most ubiquitous delivery service in the country and wreak havoc on the postal agency's long-term financial viability. The stakes couldn't be higher for both parties. Amazon generated over $6 billion in annual revenue for the Postal Service this year, officials estimate. Amazon has long been the Postal Service's top customer, the WaPo report said, generating more than $6 billion in annual revenue for the agency in 2025. That would account for roughly 7.5 percent of the courier's $80.5 billion in operating revenue for the fiscal year. For a postal service bleeding cash with annual net losses still hover around $9–9.5 billion, and cumulative losses since 2007 sit north of $100 billion , losing Amazon would be devastating. The breakdown stems from a fundamental shift in how the postal service wants to do business. According to WaPo, Steiner plans to hold an auction in early 2026 that would sell access to postal facilities to the highest bidder, rather than directly to Amazon. According to WaPo, Steiner plans to hold an auction in early 2026 that would sell access to postal facilities to the highest bidder, rather than directly to Amazon. This would put Amazon in direct competition with other national retail brands and regional shipping firms for USPS access. While the parties had reportedly been negotiating since February, the talks have "largely concluded with no deal." Amazon had sought a four-year contract extension with favorable rates, but the new postmaster general's "democratized" approach threatens to end the sweetheart deals that have defined the relationship for over a decade. Amazon isn't exactly defenseless in this standoff. The company has built what amounts to a shadow postal service that's rapidly catching up to the official one. The company has quietly built a shadow postal service that, in 2024, delivered 6.3 billion parcels a year in the U.S., just behind the USPS' 6.9 billion, according to Pitney Bowes' Parcel Shipping Index. 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. The index projects Amazon's logistics arm will ship 8.4 billion parcels domestically in 2028, surpassing USPS' 8.3 billion. What makes this particularly threatening for traditional carriers is Amazon's cost structure. The company is largely free of the union labor contracts that elevate costs for some other parcel shippers. Much of its existing last-mile delivery network is made up of gig workers and independent contractors. The company has thus far poured $4 billion into expanding into more than 4,000 rural towns and communicates, which would triple its rural network upon its completion in 2026. The implications extend far beyond just Amazon and the postal service. USPS describes the product as a discounted work-share option for big mailers; internal bulletins frame it as the way other carriers tap USPS for the "last mile," especially in non-metropolitan and rural areas where it's the only carrier that goes everywhere — six days a week If Amazon successfully builds a nationwide network that rivals the postal service's universal coverage, it could fundamentally alter how Americans receive everything from birthday gifts to prescription medications. The timing adds another layer of complexity. UPS plans to slash the amount of Amazon volume it delivers in half by next year as it prioritizes more profitable customer segments, pushing the e-commerce giant to lean on other delivery options. Meanwhile, Amazon has recently renewed partnerships with FedEx for heavy package delivery, showing the company is actively diversifying its logistics relationships. Despite the tough negotiations, both sides are keeping diplomatic channels open. Amazon spokesperson Steve Kelly, said in a statement: "The USPS is a longstanding and trusted partner and we remain committed to working together. 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. But Amazon also expressed surprise at the auction plan, suggesting the postal service changed the rules mid-negotiation. Whether this corporate divorce actually happens may ultimately depend on practical realities. Building a delivery network that reaches every American address—including rural routes where packages lose money—is extraordinarily expensive and complex. The postal service has spent centuries perfecting this challenge, and Amazon, despite its resources, would need years to fully replicate that reach. The real question isn't whether Amazon can eventually replace the postal service for its own deliveries, but whether it wants to take on the burden of universal service that comes with being America's delivery network of last resort. That responsibility has defined the postal service for generations, and it may be the one thing that keeps this partnership from completely unraveling.