Why It Matters to Distributors: Changes in Amazon’s delivery strategy and USPS pricing could increase last-mile volatility, forcing distributors to rethink carrier mix, pricing strategies, and service levels.
Amazon said it is preparing to reduce its reliance on the U.S. Postal Service after more than a year of contract negotiations failed.
In a March 18 statement, Amazon said it had sought to expand its use of USPS but that the agency “abruptly walked away” from negotiations in December. The current contract is set to expire on Sept. 30, 2026.
Amazon said it has spent more than $5 billion annually with USPS in recent years and has submitted a bid under the agency’s new auction-based system.
The development follows reports that Amazon could reduce USPS package volumes significantly. USPS currently handles about 1.7 billion Amazon packages annually, according to Reuters.
USPS is shifting to a competitive bidding model that opens its last-mile network to multiple shippers.
For distributors, the changes could lead to less predictable pricing, especially in rural areas, and increased competition for delivery capacity.
Amazon has not confirmed a full exit from USPS but said it is preparing to shift volume if a new agreement is not reached.
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