Rumor has it that negotiations between Amazon (AMZN.US) and USPS are at an impasse and plan to transfer billions of packages to its own logistics network

The Zhitong Finance App learned that according to reports, Amazon (AMZN.US) is considering terminating the large-scale transportation contract with the United States Postal Service (USPS) by the end of 2026 and transferring related package business to its own rapidly expanding logistics distribution network. Although this move has long been widely anticipated by the market, it may further worsen USPS's already severe financial situation — it is worth noting that Amazon is USPS's largest customer, contributing more than $6 billion in revenue in 2025, and is also one of the government agency's most profitable package business sources.

Currently, negotiations between Amazon and USPS to renew the negotiation service agreement have basically come to a standstill. According to reports, Amazon has sought to extend the four-year cooperation period after the current contract expires on October 1, 2026, but USPS management preferred to adopt a reverse auction model, that is, open up the right to use postal facilities to the highest bidders among large carriers and retailers. The report said that this shift in strategy has essentially led to the suspension of negotiations and prompted Amazon to launch an emergency plan to rearrange the delivery routes for billions of packages. However, there is still a possibility that the two sides will reach an agreement. General Post Office Director David Steiner has recently met with Amazon CEO Andy Jassy and other senior officials.

For Amazon, the end of this potential partnership highlights its overall strategy to build a vertically integrated logistics empire: through an intensive warehousing network, its own fleet of parcel carriers, and a huge fleet of contractors and gig delivery drivers, Amazon is gradually internalizing most of its “last mile” delivery business in the US and directly becoming a competitor to USPS, UPS.US (UPS.US), and FedEx (FDX.US).

Historically, Amazon has relied heavily on United Parcel and USPS for package delivery—USPS has long been its core partner for long-distance shipping and two-day delivery services, while Amazon has focused on order acquisition and fulfillment rather than the shipping business itself. However, many holiday season logistics bottlenecks and rising transportation costs in the 2010s prompted Amazon to speed up the construction of its own logistics system and gradually reduce its dependence on external carriers by adding new cargo planes, delivery trucks, and distribution stations.