Amazon (AMZN) is reported by the Washington Post to be considering ending its massive shipping contract with the U.S. Postal Service by late 2026 and shifting those parcels into its own rapidly expanding delivery network. While the move has been widely anticipated, it is likely to worsen USPS’ already poor financial condition. Notably, Amazon (AMZN) is the largest customer of USPS, generating more than $6 billion in 2025 revenue, and is one of the government agency’s most profitable package streams.
Talks between Amazon (AMZN) and USPS over renewed negotiated service agreements have largely stalled, with Amazon (AMZN) said to have sought a four-year extension beyond the current deal’s October 1, 2026, expiration and USPS leadership instead moving toward a reverse-auction model that would sell access to postal facilities to the highest bidders among large shippers and retailers. That pivot was reported to have effectively ended the negotiations and prompted Amazon (AMZN) to prepare contingency plans to reroute billions of parcels, although both sides could still reach a deal, and senior leaders, including Postmaster General David Steiner and CEO Andy Jassy, have recently met.
For Amazon, the potential split underscores its broader strategy of building a vertically integrated logistics empire, leveraging a dense network of warehouses, its own parcel fleet, and armies of contractors and gig drivers to handle the majority of its U.S. last-mile volume in-house and stand as a direct rival to USPS, UPS (UPS), and FedEx (FDX).
Historically, Amazon (AMZN) has relied heavily on UPS (UPS) and USPS to move its parcels, with USPS long serving as a primary partner for long-haul and two-day deliveries while Amazon (AMZN) focused on order capture and fulfillment rather than transportation. However, after some painful holiday-season bottlenecks and rising shipping costs in the 2010s, Amazon (AMZN) accelerated its own logistics build-out by adding planes, vans, and delivery stations to steadily reduce the dependence on outside carriers.
Shares of Amazon (AMZN) trickled 0.2% higher in premarket action on Thursday.