The way millions of Amazon packages move across the country could shift dramatically.
Amazon said on Wednesday in a statement that a key partnership with the United States Postal Service unraveled late last year after months of negotiations.
The e-commerce giant said that its goal was to expand the volume of packages it routes through the federal carrier. However, it said that after spending more than a year working toward a renewed long-term agreement with USPS, talks suddenly collapsed in December, with the agency exiting discussions at the “eleventh hour.”
The Wall Street Journal first reported on Wednesday that Amazon is preparing to significantly scale back its reliance on USPS when the current contract expires later this year. The company has historically been the USPS’s largest shipping partner, handling billions of deliveries annually.
Amazon said in its statement that it remains open to continuing the relationship with USPS and is seeking further discussions with leadership, but warned that time is running low for a deal.
The strained negotiations come as the USPS faces a financial cliff. Postmaster General David Steiner told lawmakers on Tuesday in a written statement that the agency could run out of cash within a year if current conditions persist. In a testimony before Congress on Tuesday, he described the organization as being at a “critical juncture,” with limited options to stabilize its finances.
Under federal law, USPS operates as a self-funded entity, relying on postage and service fees rather than taxpayer dollars. That model has come under strain for years as traditional mail volumes decline and costs continue to rise.
Since the mid-2000s, the agency has posted losses in nearly every fiscal year. It ended 2025 with a multibillion-dollar deficit and has continued to report quarterly losses driven by rising labor, healthcare, and operational expenses.
As of 2026, USPS has hit its statutory borrowing limit and can no longer take on additional debt. In 2025, President Donald Trump floated a plan to privatize USPS, but there have been no follow-ups.
In recent years, Amazon has been shifting its logistics strategy by building a vast delivery network of its own instead of relying on third parties, including acquiring its own fleets of trucks, planes, and regional air hubs.
Even so, USPS has remained an important partner for Amazon, particularly for last-mile delivery. Steiner told Reuters in December that Amazon used USPS 1.7 billion times a year for packages.
USPS did not immediately respond to a request for comments.
