Usps Is Struggling To Stay Afloat — And Amazon’s Major Delivery Changes Won’t Help

Amazon plans to importantly trim nan number of packages it ships done nan U.S. Postal Service arsenic nan agency struggles to enactment afloat financially.

USPS’s biggest customer has scaled backmost nan number of packages it sends done nan work and intends to slash that number by astatine slightest two-thirds this fall, Amazon sources told The Wall Street Journal.

Nearly 15 percent of packages delivered by USPS successful 2025 came from Amazon, providing immoderate stableness for nan agency, which has agelong operated astatine a nonaccomplishment and is moving retired of cash, U.S. Postmaster General David Steiner told Congress Tuesday.

In January, USPS began accepting proposals to usage its last-mile transportation web done an auction process that was meant to raise funds. Amazon has relied heavy connected USPS’s last-mile work to scope customers successful distant and agrarian areas.

The past mile of transportation is nan astir costly portion of nan shipping process, accounting for up to 53 percent of a shipment’s full cost, according to nan Association for Supply Chain Management.

Amazon said past twelvemonth it was “surprised” that nan USPS wanted to person an auction for nan last-mile service, and was evaluating different options. Amazon and USPS’s statement is group to expire this October.

“We negotiated pinch [the Postal Service] successful bully religion for complete a twelvemonth to effort and scope a woody that would bring them billions successful gross and believed we were heading toward an agreement, erstwhile nan USPS abruptly walked distant astatine nan 11th hr and introduced nan auction concept,” an Amazon spokesperson told the WSJ this week.

“While we’ve submitted a bid and dream to proceed our partnership, moreover astatine nan reduced level we now person to hole to meet our customers’ transportation needs sloppy of nan result of nan auction,” nan spokesperson added.

Amazon said it submitted a bid and hopes “to proceed our partnership, moreover astatine a reduced level,” but noted it now had to hole to meet customers’ transportation needs “regardless of nan result of nan auction.”

Amazon announced past April that it is investing complete $4 cardinal to grow its agrarian transportation network. The move will create complete 100,000 jobs and let Amazon to present complete a cardinal much packages each year, nan institution said.

The institution delivered 6.7 cardinal packages successful 2025, while USPS delivered 6.6 billion, according to information from ShipMatrix, a parcel-analytics firm. FedEx and UPS person besides trim backmost connected nan number of packages they present for Amazon to attraction connected much profitable parcels, according to nan report.

USPS received bids from much than 20 companies to usage its last-mile service, which brings packages from 18,000 station offices and transportation hubs to their last destination.

Each bid included an estimated number of packages expected to vessel done USPS and nan value each institution is consenting to salary for this access.

Steiner, who leads USPS, said during a legislature proceeding Tuesday that nan agency would “run retired of cash” successful astir a year. The agency reported a nett nonaccomplishment of $9 cardinal successful 2025.

Steiner asked lawmakers to see lifting restrictions connected nan agency’s expertise to raise prices for stamps and different services.

“I americium a patient believer that nan marketplace should group nan rates. And nan marketplace isn’t mounting nan rates,” Steiner said.

USPS has reported net losses of $118 cardinal since 2007 arsenic first-class mail, which brings successful nan astir money, has dropped to nan lowest measurement since nan 1960s.

During Tuesday’s hearing, Steiner said reducing deliveries to 5 days a week would prevention nan agency astir $3 cardinal a year.

Closing smaller station offices successful distant areas would besides prevention $840 million, but Steiner noted those ideas “may not beryllium palatable to Congress aliases nan American public.”