Amazon is preparing contingency plans to significantly expand its in-house delivery network and potentially end its decades-long reliance on the United States Postal Service if current contract negotiations fail, according to a report published by The Washington Post.
The existing agreement between the two organizations is scheduled to expire on October 1, 2026. When renewal discussions began, Amazon initially sought a straightforward four-year extension under terms similar to the current arrangement. After more than a year of talks, however, the company reportedly learned that the Postal Service intends to put a portion of its future parcel capacity up for competitive bidding through an auction process, a shift that caught Amazon executives off guard.
While negotiations remain active, Amazon has begun actively exploring alternatives that would allow it to maintain service levels for customers without depending on the outcome of the talks. Senior company sources indicated to The Washington Post that completely walking away from the Postal Service as early as next year is now among the scenarios under serious consideration.
Such a move would deliver a severe financial blow to the Postal Service at a time when the agency is already struggling with profitability. The Postal Service has not recorded an annual profit since 2022 and relies heavily on revenue from e-commerce giants. Amazon currently accounts for approximately 7.5 percent of the agency’s total yearly income, spending in excess of six billion dollars annually on postal deliveries.
For Amazon, the shift would accelerate an existing strategic transition that has been underway for years. The company has invested tens of billions of dollars in building Amazon Logistics, its proprietary last-mile delivery operation that now includes hundreds of thousands of its own drivers, a growing fleet of cargo aircraft, electric delivery vans, and an expanding network of sortation centers and micro-warehouses.
Reortedly in 2024, Amazon Logistics completed 6.3 billion package deliveries in the United States, placing it second only to the Postal Service itself, which handled 6.9 billion parcels. Industry forecasts from Pitney Bowes project that Amazon will surpass the Postal Service by 2028, delivering an estimated 8.4 billion packages compared to the Postal Service’s 8.3 billion.
According to the report in 2024, Amazon Logistics completed 6.3 billion package deliveries in the United States, placing it second only to the Postal Service itself, which handled 6.9 billion parcels. Industry forecasts from Pitney Bowes project that Amazon will surpass the Postal Service by 2028, delivering an estimated 8.4 billion packages compared to the Postal Service’s 8.3 billion.
Amazon continues to describe the Postal Service as a valued partner of more than thirty years and insists that a mutually beneficial extension remains its preferred outcome. The company has signaled willingness to increase its spending under a renewed deal. Nevertheless, executives have made clear that prolonged uncertainty will force the retailer to prioritize the reliability of its own network over preserving the historic relationship.
No final decision has been made, and both sides continue to exchange proposals. The outcome of the negotiations over the coming months will determine whether one of the most significant partnerships in American e-commerce endures or gives way to direct competition between the nation’s two largest parcel carriers.
Please add Cord Cutters News as a source for your Google News feed HERE. Please follow us on Facebook and X for more news, tips, and reviews. Need cord cutting tech support? Join our Cord Cutting Tech Support Facebook Group for help.