Amazon said Monday, April 6, that it reached a new deal with the United States Postal Service that will keep USPS handling 80% of the package deliveries it currently makes for the company. The agreement leaves Amazon’s long-running use of the mail service largely intact even as the company keeps building out its own delivery network.
Amazon told it was “pleased to have reached a new agreement with USPS that furthers our longstanding partnership and will let us continue supporting our customers and communities together.” The move matters because Amazon had threatened in March to cut two-thirds or more of the package deliveries currently handled by USPS, a step that would have forced a sharp shift in how millions of parcels move through the system.
The deal is still tentative. The reported Monday that it must be approved by the Postal Regulatory Commission, leaving the final shape of the arrangement uncertain. The report said Amazon accounts for 15% of the packages delivered by USPS, and that the company still relies on the postal service for many rural deliveries even as it expands one- and two-day delivery in those areas.
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The new agreement also sits inside a broader fight over who controls the last mile. Three months earlier, in December, USPS said it planned to make its last-mile delivery service available to shippers of all sizes and that it would soon begin accepting bids. In March, Amazon revealed during that bidding process that it planned to reduce the number of packages it ships via USPS, underscoring the pressure both sides faced as they negotiated pricing and capacity.
That uncertainty is what gave the latest deal its weight. Amazon has said it will continue to expand its delivery capabilities, but also that it will stop short of the reach offered by USPS, especially in places where the postal service already has the routes and the network. USPS had previously offered direct delivery service from its 18,000 delivery destination units only to a limited number of very large customers, making Amazon’s access to the system a critical piece of its shipping operation.
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For now, the package flow between the two companies appears to be holding together. The unresolved question is whether regulators will approve the tentative arrangement in time to keep Amazon’s rural and fast-delivery network running without another round of disruption.
