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Amazon · E-Commerce · Logistics · USPS
Amazon.com plans to drastically reduce the number of packages it sends through the U.S. Postal Service, aiming for a two-thirds cut by September when their contract expires.
This move significantly impacts USPS, which considers Amazon its largest customer, having handled 1.7 billion packages annually. Postmaster General David Steiner indicated USPS could face a cash shortfall within 12 months, potentially as early as October.
The breakdown in negotiations stems from Amazon's claim that it sought to increase volumes but was surprised when USPS introduced an auction for last-mile delivery access after over a year of talks. USPS, conversely, seeks a "fair price" for its services.
In response, Amazon is investing over $4 billion to expand its own U.S. rural delivery network, preparing for reduced reliance on USPS. This dispute signals a major shift in the logistics landscape, potentially increasing Amazon's control over its supply chain while exacerbating USPS's financial woes and forcing it to seek alternative revenue streams through its auction process.
