The shipping world might be heading for a major shake-up as Amazon considers walking away from its partnership with the United States Postal Service. This potential breakup could completely change how Americans receive their packages, creating ripple effects across the entire delivery industry.
Currently, USPS and Amazon work closely together like dance partners who know each other’s moves. USPS delivered 6.9 billion packages in 2024, capturing 31% of the market, while Amazon Logistics handled 6.3 billion packages with 28% market share.
Amazon pays USPS over $6 billion annually, which represents about 7.5% of the postal service’s total revenue. That’s a hefty chunk of change that USPS definitely doesn’t want to lose.
The partnership’s current contract expires in October 2026, but formal renewal talks have already stalled without a new deal in place. Amazon is growing fast, with its delivery network expanding 7.3% last year while USPS package volumes actually dropped 6.2%.
If current trends continue, Amazon could overtake USPS in total package volume by 2028.
Amazon is building its own massive delivery network, investing billions in trucks, planes, and distribution centers. This strategy gives the company more control over delivery speed and costs, potentially making them less dependent on traditional carriers. For investors, Amazon represents a reliable company that continues to strengthen its competitive position through strategic investments.
Think of it like Amazon deciding to bake its own bread instead of buying from the local bakery.
For USPS, losing Amazon would be devastating. The postal service has posted multi-billion dollar losses in nine of the past ten years, and Amazon’s business helps keep the lights on. USPS plans to hold a reverse auction early next year that would force Amazon to compete with other retailers for access to postal facilities.
Without this partnership, USPS service quality could suffer, and other retailers might also look elsewhere for shipping solutions. Meanwhile, alternative carriers are gaining ground with a 23% increase in shipments during 2024, capturing 3.5% of the total market.
This potential split represents more than just two companies going separate ways. It could reshape the entire shipping landscape, forcing UPS and FedEx to compete harder while leaving USPS scrambling to replace lost revenue.
The outcome will likely determine whether Americans continue receiving packages from their friendly mail carrier or increasingly see Amazon’s distinctive delivery vans rolling through their neighborhoods instead.
