The report: While Amazon is in discussions to extend its partnership with the US Postal Service, the retailer is exploring alternative delivery options, Steve Kelly, an Amazon spokesperson, tells EMARKETER.

• The comments follow a Washington Post report that Postmaster General David Steiner 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.
• The retailer was “surprised” to learn about Steiner’s plans for an auction after nearly a year of negotiations, Kelly said, noting the shift in direction adds uncertainty to Amazon’s delivery network.

The context: Amazon has significant leverage as USPS’ largest customer.

• The retailer sends billions of packages through the USPS network and accounts 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.

Amazon 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.

• That business is on track to overtake USPS in parcels by 2028. If the partnership ends next year, that timeline could accelerate.
• Amazon is also taking steps to broaden its delivery footprint, pledging earlier this year to spend more than $4 billion to expand its US rural network by the end of next year.

Why it matters: If talks between USPS and Amazon break down, it would be a seismic shock to USPS.

• As paper mail declines, USPS has relied on packages to drive revenues.
• If Amazon were to position Amazon Logistics as 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.