Amazon is negotiating with the U.S. Postal Service (USPS) as their delivery contract nears its end. The current agreement expires in October 2026, and both parties are discussing the future of their long-term partnership.
Negotiations and Contract Details
USPS’s new Postmaster General, David Steiner, plans to hold a reverse auction in early 2026. This would require Amazon to compete with national and regional carriers for delivery access, a shift from the current arrangement.
Amazon is the largest customer for USPS, generating over six billion dollars in revenue this year, which accounts for about 7.5 percent of total sales. The company expressed surprise at the auction plans after months of discussions and aims to expand their partnership.
Financial Impacts and Expansion
The potential auction creates uncertainty for Amazon, prompting them to explore options to protect their delivery network. Losing Amazon would financially strain USPS, which has already experienced significant losses and declining mail volumes.
In 2024, Amazon Logistics handled 6.3 billion packages—second to USPS’s 6.9 billion. Analysts expect Amazon to outpace USPS in deliveries by 2028, especially if the partnership ends. The company is also investing over four billion dollars to enhance its rural delivery network.
Political Context and Expert Insights
Steiner met virtually with Amazon CEO Andy Jassy on November 14. The Postal Service has faced political scrutiny, including comments from President Trump about restructuring USPS.
An ecommerce analyst noted that USPS relies on Amazon more than vice versa, giving Amazon leverage in the negotiations.
