The report: Amazon is taking steps to expand its nationwide delivery network and sever its partnership with the US Postal Service, according to a report in The Washington Post, which is owned by Amazon founder Jeff Bezos.

• Earlier this year, Amazon signaled its intent to broaden its delivery footprint, pledging to spend more than $4 billion to expand its US rural network by the end of next year.
• It already operates a large, fast-growing Amazon Logistics business, which grew its order volume 7.3% last year to 6.3 billion parcels, just shy of the 6.9 billion parcels for USPS, per Pitney Bowes’ parcel shipping index.
• Even without a breakup, Amazon Logistics is on track to overtake USPS in parcels by 2028. If the partnership dissolves next year, that timeline could accelerate.

The caveat: The report could be a negotiating ploy.

• It follows a breakdown in talks between Amazon and USPS. The retail giant had aimed to reach a deal that would have locked in favorable rates and set higher benchmarks for package volume.
• Amazon may be asserting leverage in response to recent comments by Postmaster General David Steiner about its negotiated package service agreement with USPS. While such deals historically favored large shippers, Steiner reportedly plans to hold a reverse auction early next year to sell access to postal facilities to the highest bidder, which would force Amazon to compete with national retailers and regional carriers.
• “We were surprised to hear they want to run an auction after nearly a year of negotiations, so we still have a lot to work through,” said Steve Kelly, an Amazon spokesperson. “Given the change of direction and the uncertainty it adds to our delivery network, we're evaluating all of our options that would ensure we can continue to deliver for our customers.”
• Amazon likely wants to signal that while USPS might secure higher rates from other customers, those gains may not offset the volumes it would lose if Amazon cuts ties.

Why it matters: Such a move would be a seismic shock to USPS.

• Amazon has long been USPS’ largest customer, sending billions of packages through its network and accounting for an estimated 7.5% of agency revenues this year.
• Losing those revenues would significantly strain USPS, which has posted multibillion-dollar losses in nine of the past 10 years, including $9 billion in fiscal 2025.
• As paper mail declines, USPS has relied on packages to drive revenues. If Amazon were to bolster a rival service, it could readily undercut USPS on price and speed, siphoning market share. A larger Amazon network would also intensify pressure on FedEx and UPS.

Our take: Without Amazon’s volume, the USPS service quality would likely deteriorate. That could further weaken the agency as other retailers that rely on USPS for ecommerce deliveries would likely shift to other carriers—including Amazon—to satisfy the significant share of shoppers who consider delivery speed the most important factor when buying online.