Amazon and USPS Agree 20% Package Volume Reduction, $6B Revenue Preserved
Amazon and USPS reached a tentative agreement reducing Amazon’s package volume handled by USPS by 20%, avoiding an initial threat to cut volumes by two-thirds. USPS processed over 1 billion Amazon packages last year generating $6 billion in revenue and the accord now awaits Postal Regulatory Commission approval.
1. Deal Terms
Amazon and USPS have negotiated a deal that reduces Amazon’s parcel volume handled by USPS by 20%, instead of the two-thirds cut originally proposed. The agreement preserves USPS’s handling of over 1 billion Amazon packages annually and maintains a significant logistical partnership.
2. Financial Implications
USPS generated $6 billion in revenue from Amazon packages last year, representing a key revenue stream for the Postal Service. For Amazon, the agreement mitigates potential increases in shipping costs and supply-chain disruptions that a deeper volume cut could have triggered.
3. Regulatory Approval Process
The tentative deal is subject to review and approval by the Postal Regulatory Commission, which will assess its impact on competition, pricing and service levels. A favorable ruling is required before the new volume terms can take effect.