Amazon plans to significantly reduce shipments via the United States Postal Service (USPS) before its contract ends in October 2026, reported The Wall Street Journal, citing sources.

The e-commerce major intends to cut at least two-thirds of the packages it routes through the USPS by late 2026.

Amazon has already begun scaling back volumes sent through USPS as it continues to build out its own logistics capabilities.

Last year, USPS delivered more than a billion Amazon packages, representing close to 15% of its total parcel volumes.

A substantial reduction in this business could remove a stable and significant revenue stream for the agency, which reported a net loss of $9bn in fiscal 2025 and has posted losses for much of the past two decades.

USPS has invested heavily in expanding parcel-handling capacity, including larger facilities and upgraded processing systems.

A prolonged decline in Amazon shipments could leave these assets underutilised and may prompt additional cost-cutting measures.

The move comes amid a competitive bidding process initiated under Postmaster General David Steiner for USPS’s last-mile delivery services.

Amazon disclosed its intended volume reductions as part of this confidential process.

Outcomes are expected in the second quarter, with contracts set to be finalised by the end of the third quarter.

Amazon is said to be wary of the limited time to reconfigure its logistics network if its bid does not succeed.

In that case, it could raise its bid, divert volumes to other carriers, expand its internal delivery operations, or adopt a combination of these approaches.

USPS’s financial pressures are partly tied to its statutory requirement to deliver to more than 170 million addresses six days a week, with 71% of routes operating at a loss.