Amazon (AMZN) and USPS Reach New Package Deal With 20% Volume Reduction

TLDR

• Amazon and the USPS have finalized a new parcel delivery agreement, maintaining approximately 80% of their current shipping volume.
• This outcome is significantly more favorable for the USPS than the 66% reduction Amazon had previously suggested.
• Under the updated terms, the USPS will handle roughly 1 billion Amazon packages annually.
• Following the announcement, FedEx (FDX) shares dipped 0.8% to $358.91, while UPS shares declined 1% to $97.16.
• Separately, UPS is moving forward with plans to decrease its Amazon delivery volume by more than 50% by late 2026.

(SeaPRwire) –   Amazon and the U.S. Postal Service have reached a new delivery agreement, avoiding what could have been a severe financial setback for the struggling mail service.

Amazon $AMZN said it reached a deal with the U.S. Postal Service covering more than 1 billion package deliveries a year, equal to about 80% of its existing USPS volume. pic.twitter.com/zNGcveH8rV

— Wall St Engine (@wallstengine) April 6, 2026

The contract ensures the USPS will continue to deliver approximately 1 billion packages per year for Amazon, representing about 80% of the current volume. This is a substantial improvement over the two-thirds reduction Amazon had previously indicated.

Amazon described the agreement as a continuation of their “longstanding partnership.” The USPS did not provide an immediate comment.

As the USPS’s largest client, Amazon contributes roughly $6 billion to the agency’s $80 billion annual budget. The loss of this revenue would have been significant, especially given the USPS’s warning last month that it could face a cash shortage as early as October.

Amazon.com, Inc., AMZN

The agreement is still subject to final approval.

What This Means for UPS and FedEx

The announcement impacted competitors, with FedEx (FDX) closing down 0.8% at $358.91 and UPS falling 1% to $97.16.

UPS is already executing a strategy to reduce its reliance on Amazon; in January 2025, the company announced it would cut its Amazon delivery volume by over 50% by the second half of 2026.

Conversely, FedEx took a different approach, entering into a multiyear delivery contract with Amazon in May 2025.

Amazon’s Own Delivery Push Continues

Amazon remains committed to developing its internal delivery infrastructure. In April 2025, the company announced plans to invest over $4 billion to enhance its rural delivery capabilities across the U.S. by the end of 2026.

According to reports, this expansion will persist, though it is not expected to reach a scale that would directly compete with the comprehensive, address-by-address reach of the USPS.

Meanwhile, the USPS is exploring strategies to stabilize its financial position. The agency is seeking authorization for an 8% temporary price increase on packages and priority mail, scheduled to take effect on April 26. Additionally, Postmaster General David Steiner has proposed increasing the price of a first-class stamp from 78 cents to 95 cents.

Since 2007, the USPS has accumulated $118 billion in net losses, largely attributed to the decline in first-class mail volume, which has hit its lowest point since the late 1960s.

Steiner previously informed Reuters that the USPS handles approximately 1.7 billion packages annually for Amazon. Therefore, the 1 billion figure in the new deal represents a notable decrease, though it remains significantly higher than the levels Amazon had previously threatened.