An Amazon worker unloads packages in New York, Nov. 29, 2024.
David Dee Delgado | Getty Images
Amazon on Wednesday addressed its business relationship with the U.S. Postal Service, saying in a blog post that recent contract renewal negotiations with the carrier fell apart in December when it “abruptly walked away at the eleventh hour.”
The comments came after several outlets reported on Tuesday that Amazon plans to sharply reduce the number of packages it sends through the Postal Service after failing to come to an agreement.
The company, which has long been the mail service’s largest customer, reportedly aimed to cut USPS volumes by at least two-thirds when its contract expires at the end of September.
“Our goal was to increase our volumes with USPS, not reduce them — until USPS abruptly walked away at the eleventh hour in December,” Amazon said.
Amazon said it had been negotiating with the Postal Service for more than a year to reach a new, long term agreement before talks fell apart. It said it has since submitted a bid as part of the carrier’s new auction process with the “hope to continue our partnership, even at a reduced level.”
“We’ve repeatedly requested engagement with Postmaster General Steiner to work toward a solution,” Amazon said. “We want to find a path forward, but that window is rapidly closing.”
Representatives from the USPS didn’t immediately respond to a request for comment.
The mail service announced a new last-mile “bid solicitation platform” last December, which it said could generate billions of dollars in revenue and help make USPS “a more financially viable institution.”
On Tuesday, Steiner testified at a hearing before the House Oversight subcommittee on the USPS’ financial future. He said the mail carrier is “at a critical juncture,” and warned that the Postal Service would run out of cash in less than 12 months without help from Congress.
Steiner told Reuters in December that Amazon used USPS 1.7 billion times a year to handle packages, and that the company “wouldn’t be what it is today” without the service.
Over the past decade, Amazon has built a sprawling logistics and fulfillment operation that’s enabled it to handle more of its own deliveries and shrink its reliance on outside carriers like the USPS, FedEx or UPS.
It oversees thousands of last-mile delivery companies that deliver packages exclusively for Amazon, as well as a budding network of planes, trucks and ships. It has also dotted the country with warehouses and air hubs that can speed along packages.
The company has more recently set its sights on expanding deliveries to small towns in rural America, area that’s typically handled by the Postal Service because it’s costlier and less dense than urban areas.
Amazon last year committed to spend roughly $4 billion by the end of 2026 to triple the size of its rural delivery network.
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