Amazon is mulling the possibility of ending its relationship with the U.S. Postal system and looking at plans to create its own shipping network, in a move that could spell disaster for the beleaguered federal agency, according to a new report.
The retail giant is one of the postal service’s most lucrative shipping contracts and reportedly provided it with $6 billion in 2025, accounting for 7.5 percent of the agency’s total annual revenue.
Amazon has been in “negotiated service agreements” with USPS to discuss terms of renewing the previous four-year deal, which is set to expire in October 2026.
Formal talks have now concluded with no new deal having been struck, and the retailer is now looking to self-distribute billions of packages previously handled by the postal service, according to The Washington Post, which is also owned by Amazon founder Jeff Bezos.
However, a company spokesman told The Independent that USPS was a “longstanding and trusted partner” and that plans had not been finalized. Amazon remains “committed” to working with the service, the spokesman said.
“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,” the spokesman said.
USPS plans to hold an auction early next year, where the service planned to auction off so-called last-mile deliveries, which would include packages from Amazon.
“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. 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.”
The Independent has contacted USPS for comment over the reported breakdown of negotiations.
Losing Amazon as a client would be another major blow for the postal service which has reported multi-billion dollar losses in nine of the past 10 years, despite raising its prices. The only year no loss was reported was 2022, when Congress approved a $107 billion care package in an attempt to save the agency.
Such partnerships with major shippers form the central thrust of the postal service’s “coopetition” business model. The retailers, the agency’s prime competitors, send certain parcels through USPS and others independently,
The relationship allows USPS to carry out profitable deliveries, while private-sector companies can avoid shipments that would cost more to deliver independently.
Donald Trump and the Republican party have frequently criticized the relationship between the two services, previously arguing that taxpayers should not be “subsidizing” an agency with such significant financial losses, and Trump has publicly lamented that the Postal Service is not a “profitable” service.
In December, before being sworn in for the second time, the president said that privatizing USPS was “not the worst idea” he’s ever heard.
During his first term, Trump referred to the postal service as “a joke” and Amazon’s “delivery boy,” and also threatened to block emergency financial assistance for the mail service unless it quadrupled its package prices during the Covid-19 pandemic.
