On December 5th, Amazon plans to terminate its large-scale parcel transportation agreement with the U.S. Postal Service (USPS) after the current contract expires in October 2026, shifting this portion of the business entirely to its rapidly expanding logistics network. Negotiations for a renewal are currently at a standstill.

Amazon is USPS's largest client, generating over $6 billion in revenue for USPS in 2025 alone, with this parcel business segment boasting relatively high profit margins. If the partnership were to terminate, it would further strain USPS's already tight financial situation.

Previously, Amazon sought to extend the contract by four years, but USPS management preferred a reverse auction approach, opening postal facilities to external entities including major carriers and retailers. This disagreement led to stalled negotiations, prompting Amazon to initiate contingency plans to redesign delivery routes for billions of packages annually.

However, senior officials from both sides have recently maintained contact—USPS Administrator David Steiner and Amazon CEO Andy Jassy have held meetings, leaving the collaboration still uncertain.