Retail behemoth Amazon is reportedly on the verge of a seismic shift that could reshape the American logistics landscape, with plans to potentially sever its lucrative partnership with the United States Postal Service (USPS) and build its own delivery network.
Contract Breakdown and a $6 Billion Stakes
According to a report from The Washington Post, formal negotiations to renew the critical contract between Amazon and USPS have concluded without a new agreement. The existing four-year deal is set to expire in October 2026. This partnership is profoundly significant for the federal agency, as Amazon reportedly provided it with $6 billion in revenue in 2025 alone, accounting for a substantial 7.5 percent of USPS's total annual income.
Amazon has confirmed the end of formal talks but offered a more measured public stance. A company spokesman told The Independent that USPS remains a "longstanding and trusted partner" and that plans are not finalised, emphasising a continued commitment to the relationship. However, the spokesman also revealed a point of contention: USPS plans to hold an auction early next year for last-mile deliveries, which would include Amazon parcels. "We were surprised to hear they want to run an auction after nearly a year of negotiations," the spokesman said, adding that Amazon is now "evaluating all of our options."
Potential Catastrophe for the Beleaguered USPS
The loss of Amazon as a client would represent a devastating blow to the US Postal Service, which has struggled with dire finances for over a decade. The agency has reported multi-billion dollar losses in nine of the past ten years, despite repeatedly raising prices. Its only profitable year in that period was 2022, when Congress approved a $107 billion rescue package.
This partnership is central to the USPS "coopetition" model, where it collaborates with the very retailers that are its main competitors. The arrangement allows private companies like Amazon to offload less profitable deliveries while providing USPS with much-needed revenue. A collapse of the deal would force Amazon to self-distribute billions of packages it currently routes through the postal service.
Political Scrutiny and the Road Ahead
The relationship has long been a political football. Former President Donald Trump and the Republican party have frequently criticised it, arguing taxpayers should not subsidise an unprofitable agency. Trump has previously labelled USPS a "joke" and Amazon's "delivery boy," and in December 2024, before being sworn in for a second term, he remarked that privatising the postal service was "not the worst idea" he'd heard.
The coming months will be critical. With the contract expiry looming in late 2026 and the unexpected auction plan from USPS, Amazon's evaluation of its options could lead to the most significant reorganisation of parcel delivery in the United States in a generation, with profound implications for the future of the national postal service.
