Amazon (AMZN.O) is reportedly exploring plans to cut ties with the U.S. Postal Service (USPS) as it seeks to expand its own nationwide delivery network, according to the Washington Post. If finalized, this move could significantly impact USPS’s finances and reshape how e-commerce deliveries are handled in the United States.

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Amazon’s Reliance on USPS

For years, Amazon has been the postal service’s largest customer, generating more than $6 billion in annual revenue in 2025. The partnership has allowed the USPS to benefit from high-volume e-commerce shipments, which have helped offset some of the agency’s persistent financial losses.

However, sources familiar with the matter indicate that Amazon may withdraw billions of packages currently routed through USPS by the end of 2026, though the company’s plans are still in development and subject to change.

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Financial Implications for USPS

The USPS has faced longstanding financial challenges, posting a $9.5 billion loss last year and accumulating over $100 billion in losses since 2007. Contracts with large delivery customers like Amazon have been critical in sustaining revenue streams, alongside restructuring efforts and legislative reforms aimed at stabilizing the agency.

A potential end to the Amazon partnership could therefore have major financial ramifications, reducing the volume of packages and revenue the USPS depends on.

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Ongoing Negotiations

According to the report, Postmaster General David Steiner met virtually with Amazon CEO Andy Jassy on November 14. Amazon reportedly hopes to negotiate an agreement to maintain some level of collaboration while pursuing its own delivery capabilities.

As the e-commerce giant continues to build out its delivery infrastructure, the outcome of these discussions will be closely watched by investors, policymakers, and industry analysts.

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Market Outlook

If Amazon shifts more packages away from USPS, it could accelerate the company’s efforts to control its logistics chain, reduce delivery costs, and improve service speed. Meanwhile, the USPS may need to adapt its business model to cope with reduced parcel volumes from one of its largest clients.

Analysts also note that this development reflects broader trends in the e-commerce sector, where major retailers increasingly invest in proprietary delivery networks to gain competitive advantage.