Amazon Weighs Ending Major USPS Deal to Launch Competing Delivery Network

Amazon is considering a dramatic shift in how it delivers packages nationwide. According to The Washington Post, the tech giant may end its long-standing contract with the United States Postal Service. The current deal, a cornerstone of Amazon’s logistics, expires in October 2026. This potential move could reshape the entire American delivery landscape.Negotiations for a new contract have reportedly stalled. The situation is complicated by political pressures surrounding the USPS. Amazon is now seriously evaluating building its own competing nationwide network instead.

The Stakes of a Broken Partnership

The financial impact of this decision is enormous. Under the current agreement, Amazon pays the USPS billions of dollars each year. This revenue accounted for roughly 7.5% of the postal service’s total in 2025. Losing Amazon would create a significant financial hole for the already-strained agency.Amazon has expressed frustration with the negotiation process. A company spokesperson said they were “surprised” to hear the USPS wants to “run an auction” for some shipping capacity. This change in direction has created major uncertainty for Amazon’s vast delivery operations.

Amazon’s Existing Delivery Ambitions

This potential split is not happening in a vacuum. Amazon has aggressively built its own transportation web for years. The company already operates a fleet of cargo planes and thousands of Rivian electric delivery vans. It is also developing autonomous vehicle technology through its subsidiary, Zoox.Building a complete, independent network would be a massive undertaking. However, it would give Amazon full control over the “last mile” of delivery. This control is seen as critical for meeting ever-faster customer expectations and reducing reliance on external partners.

Donald Trump’s push to rally his allies comes ahead of the 2026 midterm elections.(REUTERS)

This potential breakup signals a new, more competitive phase for package delivery. A fully independent Amazon delivery network would directly challenge major carriers like UPS and FedEx on a national scale.

Info at your fingertips

Q1: When does the Amazon-USPS contract expire?

The current agreement between Amazon and the United States Postal Service is set to expire in October 2026. Negotiations for its renewal have been ongoing but face complications.

Q2: Why would Amazon build its own network?

Amazon seeks more control and reliability over its deliveries. Building its own network reduces dependence on external partners and could improve efficiency for its core e-commerce business.

Q3: How much does Amazon currently pay the USPS?

Amazon pays the USPS billions of dollars annually under the existing contract. This revenue stream is vital for the postal service, making up about 7.5% of its total revenue in 2025.

Q4: What does Amazon already have for delivery?

Amazon already operates a large logistics network. This includes a growing air cargo fleet, a dedicated ground fleet of electric vans, and is developing autonomous vehicle technology.

Q5: What would this mean for the USPS?

Losing Amazon as a partner would be a major financial blow. The USPS would need to find new sources of revenue to offset the loss of billions in annual contract payments.

Q6: Who else would an Amazon network compete with?

A full-scale Amazon delivery network would compete directly with major private carriers like UPS and FedEx. It could also take market share from regional delivery services.