Amazon Signs 1B-Parcel USPS Contract with 20% Volume Cut
Amazon has signed a new USPS last-mile delivery contract to handle about 1 billion parcels annually, a 20% volume reduction from prior levels. The agreement secures part of USPS’s $6 billion in yearly Amazon revenue while Amazon boosts rural delivery infrastructure with a $4 billion investment.
1. Contract Terms
Amazon will deliver approximately 1 billion USPS parcels annually under the new agreement, reflecting a 20% reduction in shipping volume compared to previous contracts. The deal extends Amazon’s last-mile delivery reach in both urban and rural markets under revised volume commitments.
2. USPS Revenue and Financials
The contract channels a portion of Amazon’s $6 billion in annual revenue back to the Postal Service, helping offset its $9.5 billion net loss in fiscal 2025. Sustained USPS deliveries allow Amazon to leverage the carrier’s universal service obligation without shouldering the full rural delivery cost.
3. Infrastructure and Future Outlook
Amazon’s $4 billion investment in its own rural delivery network enhances internal logistics capabilities and paves the way for a potential exit from USPS reliance by 2028. This strategic build-out aims to reduce long-term shipping costs and grant Amazon greater control over last-mile service.