Amazon is drawing up plans to expand its own national delivery operations and potentially phase out its long-running reliance on the US Postal Service (USPS), after negotiations over a new shipping agreement stalled, as reported by The Washington Post.
The e-commerce giant has been in talks with USPS over so-called “negotiated service agreements” – arrangements that set bespoke prices and delivery commitments for the agency’s largest shipping clients.
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Amazon had sought a fresh deal that would secure more favourable rates and establish higher minimum parcel volumes.
However, discussions have ended without an agreement.
USPS is preparing to change how it allocates access to its network by organising a reverse auction in early 2026, under which Amazon and other major customers would bid for capacity at postal facilities.
In response to this proposed shift, Amazon is preparing contingency plans to withdraw the billions of parcels it routes through USPS by the end of 2026.
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By GlobalDataThe company’s plans are not yet final and could still be revised.
Postmaster General David Steiner held a virtual meeting with Amazon chief executive Andy Jassy in November 2025, and the company continues to seek an arrangement with the mail agency.
Amazon founder Jeff Bezos owns the newspaper.
Amazon has been one of USPS’s most significant commercial clients. The company is expected to generate more than $6bn in revenue for the Postal Service in 2025 – 7.5% of its revenue during the year.
The current agreement between Amazon and USPS runs until 1 October 2026, and Amazon had been seeking a four year extension.
Amazon spokesperson Steve Kelly described USPS as a “long-standing and trusted partner” and said that the company remains committed to collaboration with the agency.
He added that Amazon had been looking for ways to “extend our partnership” and “increase our spend” with USPS as part of the recent negotiations.
The reported shift in USPS’s approach comes amid broader scrutiny of its commercial arrangements. The negotiated package agreements have traditionally favoured large corporations and major parcel carriers over smaller retailers and businesses.
Steiner told the agency’s most recent public meeting that he wants to broaden access to these deals and open them up to regional delivery companies.
USPS plans to conduct a reverse auction in early 2026 that would offer access to its facilities to the highest bidders, rather than granting a direct, exclusive-style arrangement to Amazon.
Under this model, Amazon would compete against national retail brands and regional carriers for postal capacity.
That plan effectively ended a year of talks with Amazon, which had begun in February 2025, to a close, two people with knowledge of the negotiations said.
Kelly stated that Amazon was “surprised to hear [the Postal Service] wants to run an auction after nearly a year of negotiations.
“Given the change of direction and the uncertainty it adds to our delivery network, we’re evaluating all of our options that would ensure we can continue to deliver for our customers.”
