Amazon is said to be cutting its USPS shipments by at least two-thirds

A recent change in the way the US Postal Service treats its shipping partners appears to have forced Amazon to make other arrangements. The company reportedly plans to cut the number of packages it ships via USPS by at least two-thirds later this year. It says the decision came after the USPS ended negotiations at the “eleventh hour” in favor of a new bidding process.

Tuesday, the The Wall Street Journal reported that Amazon plans to cut back on USPS shipments. Last year, the company made about 15 percent of the Postal Service’s package deliveries. Cutting that by nearly two-thirds cuts one of the most reliable sources of revenue for the USPS. For fiscal year 2025, the organization reported a net loss of $9 billion.

Amazon’s current contract with USPS expires on September 30. In a public response to The WSJ Case in point, the company said it notified the USPS in October 2025 that it would need to finalize a new contract in December. “You can’t add the capacity of hundreds of millions of packages overnight – it requires huge investments, long-term infrastructure planning, hiring, and logistics,” Amazon wrote.

According to Amazon, USPS then pulled the plug on the negotiations at the last second. “We discussed with them [USPS] in good faith for more than a year to reach an agreement that will bring them billions of dollars and we believe we are on the way to an agreement,” Amazon wrote in a statement. “Our goal was to increase our prices with USPS, not decrease them – until USPS suddenly left at the eleventh hour in December.”

That’s when Postmaster General David Steiner created a new bidding process for last-mile delivery, replacing the old one established where the USPS negotiated with individual shipping partners. He described the move as “a fair bidding process that enables the market to find the best combination of local transportation qualities to get the best prices driven by volume. Steiner was appointed to this position in May 2025, following the departure of former chief Louis DeJoy.

Amazon said it submitted a bid in February using the new system but did not receive a response. “This creates significant uncertainty in our long-term network planning,” the company said. “Despite this, we participated in good faith and applied in February 2026. We received no response.”

USPS plans to announce bidding results in Q2 2026. Contracts are expected to be finalized in Q3. Although it appears to be moving forward with the contingency plan, Amazon said it “remains prepared to continue this relationship.”

As for Postmaster Steiner, he spent Tuesday asking Congress to loosen USPS rules and allow him to raise rates. Warning that the agency will “run out of money” within a year, he told a House subcommittee that he wants to increase the agency’s $15 billion debt ceiling. He also called for the power to raise postage rates and reform its pension obligations for retirees.