For nearly three decades, the partnership between Amazon and the U.S. Postal Service (USPS) has quietly supported the growth of America’s e-commerce delivery system. However, the two entities face a crucial turning point, as USPS reports significant fiscal losses and Amazon ramps up investment in its own delivery network. This standoff, if unresolved, could reshape the future of logistics in the U.S.
The History of the Amazon-USPS Partnership
Amazon and USPS began working together in 2013, with the postal service handling exclusive Sunday deliveries for Amazon. Over the years, Amazon became a vital customer, generating $6 billion annually for USPS. Despite this financial contribution, Amazon’s involvement with USPS was never straightforward. Issues around pricing and service terms have simmered in the background, particularly as USPS saw its fiscal challenges deepen. In 2025, USPS reported a $9 billion net loss, highlighting ongoing struggles with declining mail volumes and rising operating costs. The losses were exacerbated by federal mandates requiring the pre-funding of retiree benefits, a burden USPS has found increasingly difficult to manage.
Amazon’s Growing Influence in the Delivery Landscape
While USPS has long benefited from Amazon’s substantial volume, Amazon has leveraged a strategic advantage—delivery network density. This model allows Amazon to send more packages to rural areas, where USPS operates most efficiently. In fact, Amazon is poised to overtake USPS in parcel deliveries by 2028, according to experts. This shift places Amazon in a stronger bargaining position, especially given its ability to bypass USPS in urban markets with the expansion of its own network.
USPS Shifts Toward Open Bidding
In January 2026, USPS launched a new bidding platform for delivery services. This move represents a significant departure from the traditional model of exclusive contracts, opening the door for a wider range of shippers to compete for access to USPS’s vast network. The decision to offer bidding by ZIP code is seen as a response to Amazon’s increasing leverage, but it also signals the end of the cozy, long-standing relationship between the two. With the bidding platform, USPS is opening itself up to competition that could ultimately weaken its hold on rural delivery services.
Amazon’s Response: A $4 Billion Rural Network Investment
In December 2025, Amazon announced a $4 billion investment to expand its rural delivery network. This bold move, aimed at reaching 13,000 ZIP codes across the U.S. by 2026, is intended to reduce Amazon’s dependence on USPS, particularly in areas where service has been limited or unreliable. The expansion is seen as a direct challenge to USPS, which has historically been the only reliable option for rural delivery. This shift could threaten USPS’s ability to maintain its financial viability, especially as it faces rising costs and declining volume.
The Impending Crisis: What Lies Ahead for USPS and Amazon?
As negotiations continue, the future of the Amazon-USPS partnership hinges on several key factors. Should Amazon choose to end its relationship with USPS in 2026, USPS may be forced to increase shipping rates or reduce service in rural areas, a move that could alienate customers and exacerbate its financial troubles. Alternatively, if Amazon continues to rely on USPS for delivery, the postal service will likely push for rate hikes to balance the costs associated with Amazon’s rural delivery demands. This pressure could have significant consequences for consumers, particularly in rural communities where postal services are already stretched thin.
Looking ahead, the October 2026 deadline for contract renewal will be a pivotal moment for both companies. Amazon’s expanded rural network and the ongoing USPS bidding process could signal the end of a historic collaboration. As lawmakers and industry leaders watch closely, the decisions made in the coming months will shape the future of U.S. parcel delivery.
Sources:
U.S. Postal Service Reports Fiscal Year 2025 Results. USPS Newsroom, November 14, 2025
“I have taken to saying that we cannot cost cut our way to prosperity — we have to grow,” remarks to USPS Board of Governors. USPS, November 2025
Amazon investing $4 billion to expand rural delivery network. Reuters, 2025
Amazon statement on evaluating options and discussing future relationship with USPS. Reuters, December 2025
“Amazon is expected to ship more U.S. parcels than the U.S. Postal Service by 2028.” Pitney Bowes Parcel Shipping Index, 2024