Amazon is occurring the defensive after a report from The Wall Road Journal revealed that the ecommerce large plans to slash shipments with america Postal Service, which stated this week that it’s operating out of cash. In a prolonged assertion printed on Wednesday, Amazon says it didn’t wish to cut back shipments with the USPS, and that negotiations solely stalled after the USPS “abruptly walked away” from negotiations for a brand new contract.
As reported by the WSJ, Amazon plans to chop packages despatched by the USPS by no less than two-thirds by this fall, across the identical time its contract with the unbiased federal company is about to run out. Amazon claims it’s been working with the USPS for over a 12 months on a deal “that may carry them billions in income,” however the company walked away on the “eleventh hour” throughout negotiations final December.
At the same time as Amazon invests billions in constructing out a sprawling community of supply and logistics companies, it nonetheless works with the USPS for last-mile deliveries — or the ultimate leg of a cargo — particularly in rural areas. The WSJ says the USPS at the moment handles round 30 to 40 p.c of Amazon deliveries in additional distant areas, the place delivery prices are greater, and the place the USPS has a mandate to ship six days per week. However huge companies like Amazon reportedly get discounted charges on delivery with the USPS, one thing the company is now not negotiating with companies individually, in keeping with the WSJ. The supply mandate, coupled with discounted charges for giant shippers, has dealt a blow to the USPS’s funds.
As a part of efforts to shore up income, the USPS carried out a brand new bidding course of for last-mile deliveries. “There’s just one factor I’m completely sure of — if we proceed to do issues the best way we’re doing it right this moment, we’re lifeless in a couple of 12 months, and so I’ve bought to exit and take a look at the market on this value to search out out if it’s a good value,” Postmaster Common David Steiner advised Reuters final 12 months.
Throughout a listening to on Tuesday, Steiner reiterated that the USPS will run out of cash in lower than a 12 months if Congress doesn’t enable it to borrow more money and lift the worth of postage. “One simple motion, rising our borrowing authority, buys us time… Time that we will use to finest decide what the Postal Service ought to do to finest serve the American public,” Steiner stated, in keeping with The New York Instances.
Amazon says it has “repeatedly requested engagement” with Steiner, and that the corporate “obtained no response” to the bid it submitted in February 2026. “We’ve submitted a bid as a part of their new public sale idea and hope to proceed our partnership, even at a diminished stage,” Amazon’s assertion says. “Nonetheless, with out long-term certainty, we now have to arrange to satisfy our clients’ supply wants whatever the final result of the public sale.”
Steiner advised Reuters that the USPS delivers round 1.7 billion Amazon packages annually. He added that he would “like to proceed” the company’s relationship with Amazon however “at a good value.” The USPS didn’t instantly reply to a request for remark.
