Amazon Ensures Delivery of Over 1 Billion Packages Annually with USPS
Amazon and the U.S. Postal Service have reached a new agreement that provides critical relief to the cash-strapped government agency while securing delivery services for rural American customers.
Under the deal announced on April 6, Amazon will retain approximately 80% of its existing USPS deliveries, totaling more than 1 billion packages per year. This represents a significant step back from Amazon’s March threat to cut two-thirds or more of packages currently handled by USPS. The agreement, which must still be approved by the Postal Regulatory Commission, preserves Amazon’s $6 billion in annual revenue to USPS out of the agency’s roughly $80 billion budget.
The tentative deal emerged after USPS decided to auction off access to its last-mile delivery network for the first time, creating uncertainty for Amazon around capacity and pricing. While Amazon continues expanding its own delivery capabilities, the company acknowledged it cannot yet match USPS’s extensive reach, particularly in rural areas where the postal service remains essential for last-mile delivery.
“We’re pleased to have reached a new agreement with USPS that furthers our longstanding partnership and will let us continue supporting our customers and communities together,” Amazon said in a statement.
Source: Bloomberg