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Amazon’s USPS Pullback Could Blow a Fresh Hole in the Postal Service’s Finances

by Team Lumida
March 18, 2026
in Markets
Reading Time: 4 mins read
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Amazon Targets Rural America: A Game-Changer for Delivery Services

"Books from amazon" by Aurelijus Valeiša is licensed under CC BY 2.0

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Key takeaways

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  • Amazon plans to cut USPS package volume by at least two-thirds by this fall, when its current contract expires.
  • USPS delivered more than 1 billion Amazon packages last year, about 15% of its total package volume.
  • The move could cost USPS billions in revenue and leave recent parcel investments underused.
  • Amazon’s growing self-delivery network is reducing its dependence on traditional carriers, including USPS, UPS, and FedEx.

What Happened?

Amazon is planning a major reduction in the number of packages it routes through the US Postal Service, with the goal of cutting that volume by at least two-thirds by the fall. The change comes as USPS runs a new competitive bidding process for its last-mile delivery business instead of simply renewing Amazon’s current contract.

Amazon said it had expected to expand its relationship with USPS and was surprised by the auction process. Because the current contract expires in October and the bidding outcome may come late, Amazon is preparing alternative logistics options now, including shifting more deliveries to its own network or other carriers.

Why It Matters

This is a big deal because Amazon has been one of USPS’s most important parcel customers and a rare source of dependable volume for an agency that continues to lose money. USPS reported a $9 billion net loss in fiscal 2025, and Amazon parcels have helped justify years of investment in package-sorting equipment, larger facilities, and delivery capacity.

If Amazon pulls back sharply, USPS could face a double hit: lower revenue and underutilized infrastructure. That would intensify pressure on the agency to cut costs, raise prices, or seek more support from Congress. It also underscores a broader shift in the parcel industry: Amazon is no longer just a large customer of delivery networks — it is becoming a national logistics competitor in its own right.

What’s Next?

The next key milestone is the result of USPS’s bidding process, which will determine whether Amazon keeps some level of postal volume or moves even more aggressively elsewhere. Investors and industry watchers should pay attention to how much USPS can replace lost Amazon volume, whether Congress gives the Postal Service more pricing or borrowing flexibility, and how quickly Amazon expands its rural delivery capabilities.

The bigger picture is that USPS is becoming more exposed to customer concentration risk just as Amazon gains more control over its own last-mile economics.

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© 2025 Lumida Wealth Management LLC is an SEC registered investment adviser. Privacy Policy. Cookies Policy.
Disclaimer Important Information This site is for informational purposes only. Information presented on this site does not constitute as investment advice.

Lumida Wealth Management LLC (‘Lumida”) is an SEC registered investment adviser. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the adviser has attained a particular level of skill or ability.

Lumida's website (referred to herein as the "Website") is limited to the dissemination of general information pertaining to its advisory services, together with access to additional investment-related information, publications, and links. Accordingly, the publication of the Website on the Internet should not be construed by any client and/or prospective client Lumida’s solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation, over the Internet.

Any subsequent, direct communication by Lumida with a prospective client will be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides.

‍Lead Capture Forms: By submitting your contact information in the forms on this site, you are not obligated to invest in Lumida's product or services.
‍Address: Lumida Wealth Management, 25 W 39th Street Suite 700, New York, NY 10018