TLDR
- A fresh agreement between Amazon and the U.S. Postal Service maintains approximately 80% of current delivery volumes
- USPS avoids the threatened two-thirds reduction in Amazon package volumes
- The postal service will handle approximately 1 billion Amazon parcels each year under this new contract
- Shares of FedEx (FDX) declined 0.8% to $358.91 while UPS dropped 1% to $97.16 on the announcement
- UPS has its own plan to slash Amazon delivery volumes by more than half before the end of 2026
The U.S. Postal Service has secured a significant victory in negotiations with Amazon, reaching a new delivery contract that preserves the bulk of its package business with the e-commerce behemoth.
Amazon $AMZN said it reached a deal with the U.S. Postal Service covering more than 1 billion package deliveries a year, equal to about 80% of its existing USPS volume. pic.twitter.com/zNGcveH8rV
— Wall St Engine (@wallstengine) April 6, 2026
Under the terms of the new deal, USPS will continue handling approximately 1 billion Amazon packages annually — representing around 80% of the volumes it currently manages. This marks a dramatic improvement from earlier discussions where Amazon had suggested reducing volumes by two-thirds.
In a statement, Amazon described the agreement as an extension of their “longstanding partnership.” The Postal Service has yet to issue an official response.
Amazon represents USPS’s largest single customer, contributing approximately $6 billion to the agency’s $80 billion annual operating budget. A major reduction in this revenue stream would have created serious financial challenges for the already struggling postal service. Last month, USPS warned it faces potential cash depletion as soon as October.
The agreement awaits final formal authorization.
Implications for UPS and FedEx
Competing carriers responded negatively to the announcement. Shares of FedEx (FDX) fell 0.8% to close at $358.91, while UPS declined 1% to finish at $97.16.
UPS has been actively reducing its Amazon business exposure. In January 2025, the logistics company announced an agreement with Amazon to decrease delivery volumes by over 50% before the latter half of 2026. This represents a calculated strategic pivot to reduce Amazon reliance.
FedEx has taken the opposite approach — entering into a multi-year package delivery partnership with Amazon in May 2025.
Amazon’s Proprietary Delivery Network Expansion Moves Forward
Despite the renewed USPS partnership, Amazon continues developing its independent logistics infrastructure. In April 2025, the company announced plans to invest over $4 billion to enhance rural delivery capabilities throughout the United States by late 2026.
This buildout will proceed as planned — though industry sources indicate it won’t reach the comprehensive address-level coverage that USPS provides nationwide.
The Postal Service is pursuing multiple revenue enhancement strategies to address its financial difficulties. The agency has requested authorization for a temporary 8% rate increase on priority mail and package services, scheduled to take effect April 26. Additionally, Postmaster General David Steiner has proposed raising first-class stamp prices from the current 78 cents to 95 cents.
Since 2007, USPS has accumulated $118 billion in cumulative losses, primarily due to the dramatic decline in first-class mail volume, which has dropped to levels not seen since the late 1960s.
According to Steiner’s previous statements to Reuters, USPS currently delivers around 1.7 billion packages for Amazon each year, making the reduction to 1 billion under the new agreement notable — though significantly better than Amazon’s earlier proposals.
