In a move that could rattle the postal industry and have ripple effects on package delivery across the United States, Amazon is planning to drastically reduce the number of packages it ships through the U.S. Postal Service (USPS). This news comes as the company’s contract with USPS is set to expire this fall. According to the Wall Street Journal, Amazon is looking to cut its usage of USPS services by a whopping two-thirds, which could send shockwaves through an already struggling agency.
Last year, Amazon accounted for a considerable 15% of the total packages shipped by the USPS, resulting in about $6 billion in revenue for the postal service. That money certainly helps to keep the postal service afloat, especially when they are battling financial difficulties. The USPS reported losses of $9 billion in 2025 alone, building on a staggering $9.5 billion loss the year prior. With Amazon now reconsidering how much it leans on the USPS for delivery services, the agency could be facing an uphill battle to maintain revenue and stabilize its operations.
What could happen if Amazon’s bid for the postal service’s last-mile delivery is turned down? The e-commerce goliath could simply pivot to other carriers, expand its already formidable logistics fleet, or even sweeten its offer. The challenge is significant as last-mile delivery—getting packages from local post offices to customers—tends to be the priciest segment of the shipping process. In fact, it can represent as much as 52% of a shipment’s total cost, which underscores why this decision is so pivotal for both Amazon and USPS.
For USPS, the last-mile service is essential, especially for reaching customers in rural and remote areas. However, there’s a cloud hanging over the agency, as traditional letter mail revenues are declining. This reliance on a revenue stream that is slipping away poses serious challenges for the agency, as outlined by the Brookings Institution. It’s a tough spot for the USPS, which is trying to manage decreasing letter mail volumes while figure out how to adapt in a fast-evolving package delivery landscape.
Meanwhile, Amazon continues to ramp up its shipping game. Last year, the tech giant delivered a staggering 6.7 billion packages, even eclipsing both UPS and FedEx. With growth projections showing that Amazon could surpass USPS volumes by 2028, it is clear that the company is not slowing down anytime soon. The dynamics of delivery in America are changing, and as Amazon edges closer to becoming the king of package delivery, the USPS is left scratching its head—wondering how to make ends meet in a new world where its traditional roles may no longer apply.
As the fall approaches and new contracts and bids are assessed, the postal service holds its breath. The outcome could reshape the way packages are delivered across the country, highlighting the need for adaptation in a rapidly moving marketplace. For those keeping an eye on the matter, this is definitely one story to watch.
