Sources: Amazon, the USPS' top customer, providing $6B+ in 2025 revenue, is considering ending its deal at the end of 2026 and expanding its US delivery network
Amazon has long been the Postal Service's top customer, providing more than $6 billion in annual revenue to the agency in 2025.
Context & Ripple Effects
Amazon's potential change would extend a long-running shift toward self-delivery: coverage in 2019 put Amazon-delivered packages at 48% of its U.S. volume, while a later report said it had surpassed FedEx in U.S. package shipments.
For USPS, the stakes are unusually concentrated. Earlier documents described Amazon as generating billions in USPS revenue and profit, making the prospective end-of-2026 decision a major customer-retention issue rather than a routine contract renewal.
First-order effects
- USPS must plan for the possible loss of a customer contributing more than $6 billion in 2025 revenue, while Amazon evaluates whether its own U.S. network can take more volume.
- Amazon gains leverage in its negotiations with USPS by making self-delivery a credible alternative, but would also assume more responsibility for delivery capacity and execution if it exits.
Second-order effects
- A credible Amazon withdrawal would pressure USPS to defend volume through contract terms and network planning; the later proposal to cut USPS package volume by at least two-thirds shows how quickly that risk can become operational.
- More packages moving into Amazon's network would further reduce the addressable volume available to incumbent parcel carriers, even if Amazon retains USPS for selected routes or services.
Third-order effects
- If large retailers increasingly internalize last-mile delivery, postal and parcel networks may become more dependent on a narrower set of major commercial customers and more exposed to contract renegotiations.
- The subsequent new USPS-Amazon agreement with a smaller reported reduction suggests the likely structural outcome is not necessarily a clean break, but more flexible, selectively outsourced delivery networks.
The trend: Large e-commerce platforms are turning delivery from a purchased service into a strategic in-house capability while retaining outside carriers where their networks remain useful.