Amazon to Significantly Cut USPS Package Volume Amid Logistics Shift
Amazon.com Inc. Is poised to substantially reduce its reliance on the U.S. Postal Service (USPS), aiming to decrease its package volume by at least two-thirds by this fall. This strategic move signals a broader shift towards Amazon’s in-house logistics capabilities, potentially reshaping the landscape of last-mile delivery in the United States.
Amazon’s Evolving Logistics Strategy
The Wall Street Journal first reported the planned reduction in volume on March 17, 2026, citing sources familiar with the matter. Amazon handled over one billion packages for the USPS in 2025, representing approximately 15% of the agency’s total domestic volume [1]. This substantial volume has been a crucial source of stability for the USPS, which reported a $9 billion net loss in fiscal year 2025 [1].
Impact on the USPS
The USPS has recently made significant investments in new facilities and automated sorting machinery to accommodate growing parcel demand. Analysts caution that a substantial decrease in Amazon’s volume could lead to underutilization of this expensive new infrastructure [3]. The timing of Amazon’s decision aligns with the expiration of its current delivery contract with the USPS in October.
Bidding Process and Amazon’s Concerns
The shift in strategy was disclosed during a confidential bidding process for “last-mile” services initiated by Postmaster General David Steiner. Steiner has emphasized the importance of competitive bidding to determine the true market value of the agency’s delivery network. However, Amazon reportedly expressed concerns about the bidding timeline, fearing insufficient time to adjust its logistics network if its proposal was rejected [3]. Amazon has already begun reducing its reliance on the postal system to mitigate potential disruptions.
Amazon’s Investment in In-House Logistics
Over the past several years, Amazon has invested heavily in expanding its own fulfillment centers, sorting hubs, electric delivery vehicles, and a network of gig-based drivers. The company now believes it can deliver packages at a lower cost by utilizing its proprietary infrastructure [4]. Amazon Logistics already handles a volume of packages comparable to that of the USPS [4].
USPS Response
Postmaster General David Steiner stated that the USPS is still in negotiations with Amazon, but declined to comment on the potential outcome [2]. If a new agreement is not reached, Amazon may accelerate its investments in its own delivery fleet, particularly for the 30% to 40% of its more expensive rural routes that currently rely on the USPS [3].