Recently, reports emerged that while Amazon and the United States Postal Service (USPS) are in talks to extend their 30+ year partnership, the ecommerce giant is also considering other delivery options.
The current contract is set to end in late-2026, and the pair struggling to come to terms could lead to massive changes and uncertainty for ecommerce brands, shipping companies, and consumers alike.
Amazon and USPS Struggling to Reach a Deal
According to a report, Amazon is currently in negotiations to extend the company’s partnership with USPS, but the ecommerce powerhouse is also considering other options once the current contract with USPS ends on October 1st, 2026.
When the talks began, Amazon was reportedly looking for a four-year extension. However, after negotiations, and reports of USPS planning to hold an auction to sell some of its shipping capacity to the highest bidder, talks have allegedly stalled.
If this news about USPS auctioning of its services is true, it would force Amazon to compete for the shipping capacity against other retailers and carriers, which could be costly and leads to more uncertainty for the company.
Of course, while this report of Amazon considering other options could be legitimate, some believe it may simply be a negotiating tactic.
Amazon Has Leverage
Negotiation tactic or not, Amazon has quite a bit of leverage in these negotiations. The company is among the largest customers for USPS, as it spends over $6 billion annually on USPS deliveries, which makes up around 7.5% of agency revenue. As a result, if Amazon leaves town, USPS loses a huge customer, and it would put a ton of financial strain on the agency, which hasn’t been profitable since 2022.
In addition to that, Amazon already operates its own large delivery network. In fact, Amazon delivered 6.3 billion packages in 2024, only a little less than the 6.9 billion that USPS delivered. Within the next few years, Amazon is expected to surpass USPS and become the largest parcel shipper.
What a Breakdown in This Partnership Means to Sellers
While the two companies are still negotiating and could very well come to a deal and extend the partnership, ecommerce sellers need to be prepared for anything.
If this relationship ends, there are a few things that have a good chance of happening. Firstly, the costs of shipping may change for all parties. USPS has generally been a cost-effective shipping solution, especially for rural deliveries, last-mile deliveries, and smaller packages.
If USPS is no longer in the picture, ecommerce sellers may need to pay more for shipping in certain areas or for certain parcels, which either cuts into profit margins or gets passed onto consumers, raising how much they have to pay.
Also, USPS is known for the company’s rural reach across the nation. As a result, if USPS is no longer working with Amazon, those in rural areas may notice slower deliveries or less consistency as Amazon and many other delivery services don’t have the same experience in these areas as USPS does.
Finally, if Amazon and USPS split, ecommerce sellers may have less options for diversifying their shipping options. This may make the company more dependent on another private carrier or have an increased reliance on Amazon’s own network.
