Amazon Denies Role in Post Office’s Financial Crisis
▼ Summary
– Amazon plans to drastically reduce shipments with the USPS, aiming to cut packages by at least two-thirds by this fall when their contract expires.
– Amazon claims negotiations stalled because the USPS abruptly walked away from a deal that would have brought billions in revenue to the agency.
– The USPS is in financial distress, with its Postmaster General stating it will run out of money in less than a year without congressional action to borrow more and raise prices.
– The USPS has implemented a new bidding process for last-mile deliveries, seeking fair market prices, but Amazon says it has received no response to its submitted bid.
– The USPS currently handles a significant portion of Amazon’s rural deliveries, but discounted rates for large shippers have contributed to its financial struggles.
The financial pressures facing the United States Postal Service have intensified, with the agency warning it could run out of operating cash within a year. A recent report indicating Amazon plans to drastically reduce its package volume with the USPS has brought the situation into sharp focus, though the e-commerce leader disputes it is to blame for the postal service’s precarious position. Amazon has issued a detailed rebuttal, asserting that negotiations for a new shipping contract collapsed only after the Postal Service unexpectedly ended talks.
According to the initial report, Amazon intends to cut the number of packages it sends through the USPS by more than two-thirds this autumn. This timing coincides with the expiration of the current contract between the two entities. In its statement, Amazon countered that it had been engaged in discussions for over a year on a new agreement projected to generate billions in revenue for the agency. The company claims the USPS walked away from the negotiating table at the last possible moment in December.
Despite Amazon’s massive investment in its own delivery and logistics network, it still relies on the Postal Service for last-mile deliveries, particularly to rural addresses. The USPS is legally obligated to deliver mail six days a week to every address in the nation, which makes it a critical partner for reaching remote areas where private carrier costs are prohibitive. Reports suggest the postal service currently handles between 30 and 40 percent of Amazon’s deliveries to these less accessible locations. However, large shippers like Amazon have historically received discounted rates, a practice the USPS is now moving away from as it seeks to improve its financial health. The combination of its universal service mandate and these discounted commercial rates has significantly strained its finances.
To address its revenue challenges, the USPS has initiated a new competitive bidding process for last-mile delivery contracts. Postmaster General David Steiner has been vocal about the need for change, stating last year that testing the market was essential to determine fair pricing and ensure the agency’s survival. During a congressional hearing this week, Steiner reiterated the urgent timeline, stating the USPS will deplete its funds in under a year without congressional action to increase its borrowing authority and adjust postage rates.
Amazon states it has tried to re-engage, submitting a bid under the new auction system in early 2026 but receiving no response. The company expressed a desire to maintain a partnership, even at a reduced scale, but emphasized the need for long-term certainty to plan its logistics. “Without that certainty, we now have to prepare to meet our customers’ delivery needs regardless of the outcome of the auction,” Amazon’s statement read. For his part, Steiner confirmed the USPS delivers roughly 1.7 billion Amazon packages annually and said he would welcome continuing the relationship, but strictly “at a fair price.” The Postal Service has not provided additional comment on the ongoing dispute.
(Source: The Verge)
