Amazon announced that negotiations with the U.S. Postal Service collapsed when USPS walked away in December 2025, a development disclosed on March 19 2026. The carrier had been in talks for more than a year to secure a deal that would bring it billions in revenue, but the talks ended abruptly at the eleventh hour.
Amazon ships roughly 1.7 billion packages per year through USPS, representing about 15% of the postal carrier’s total deliveries and generating an estimated $6 billion annually for the agency. The current contract expires in October 2026 and was the largest single source of revenue for USPS in recent years.
In response, Amazon is preparing to absorb the loss of USPS capacity by expanding its own logistics network, which includes a fleet of trucks, planes, and regional hubs. The company’s goal was to increase volumes with USPS, not reduce them, and it has already submitted a bid in February 2026 under USPS’s new auction model.
USPS has been in a severe financial crisis, reporting a controllable loss of $2.7 billion in FY 2025, up from $1.8 billion in FY 2024, and total losses of $9 billion in 2024 and 2025. The collapse of the Amazon partnership could cut the carrier’s revenue by billions and accelerate its already precarious financial position.
"We negotiated with them in good faith for over a year to try and reach a deal that would bring them billions in revenue and believed we were heading toward an agreement, when the USPS abruptly walked away at the 11th hour and introduced the auction concept," said an Amazon spokesperson. "While we've submitted a bid and hope to continue our partnership, even at a reduced level, we now have to prepare to meet our customers' delivery needs regardless of the outcome of the auction."
"I am not sure that the American public is aware that the Postal Service is at a critical juncture. Less than a year from now the Postal Service will be unable to deliver the mail if we maintain the status quo," said U.S. Postmaster General David Steiner. "But there is one thing we can't do, and that is maintain the status quo. I am confident that we can grow revenue, reduce costs, and solve our financial predicament, but that takes time, and we don't have a lot of time. One small and easy action, increasing the borrowing limit, buys us that time — time that we can use to determine what the Postal Service should do to best serve the American public."
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