An Amazon employee unloads a package in New York on November 29, 2024.
David Dee Delgado | Getty Images
Amazon Addressing its business relationship with the U.S. Postal Service, it said in a blog post Wednesday that contract renewal negotiations with the Postal Service collapsed in December when the Postal Service “abruptly walked away at the eleventh hour.”
The comments came after multiple news outlets reported on Tuesday that Amazon plans to significantly reduce the number of packages it sends through the Postal Service after the two sides failed to reach an agreement.
The company has long been the Postal Service’s largest customer and is reportedly aiming to cut its volume by at least two-thirds when its contract expires at the end of September.
“Our goal was to increase, not reduce, our volume of business with the USPS until it abruptly withdrew on December 11,” Amazon said.
Amazon said it had been negotiating with the Postal Service for more than a year to reach a new long-term agreement before negotiations broke down. The company said it then placed a bid as part of a new auction process for carriers, expressing its desire to “continue the partnership, even at a reduced level.”
“We have repeatedly requested that we work with Postmaster General (David) Steiner to work toward a resolution,” Amazon said in a statement. “We want to find a way forward, but that window is rapidly closing.”
Postal Service officials did not respond to requests for comment.
In December, the company announced a new last-mile “bid solicitation platform” that it said could generate billions of dollars in revenue and help make the Postal Service “a more financially viable institution.”
Steiner testified Tuesday at a House Oversight Subcommittee hearing on the Postal Service’s financial future. He said postal carriers were “at a critical juncture” and warned that without support from Congress they would run out of funding within 12 months.
Steiner told Reuters in December that Amazon uses the Postal Service 1.7 billion times a year to handle packages and that without the service, the company “would not be where it is today.”
Over the past decade, Amazon has built a sprawling logistics and fulfillment operation that allows it to handle more of its own deliveries and reduce its reliance on outside carriers like the Postal Service. fedex or UPS.
The company oversees thousands of last-mile delivery companies and an up-and-coming network of planes, trucks and ships that deliver packages exclusively for Amazon. There are also warehouses and aviation hubs scattered throughout the country that can quickly transport cargo.
The company has recently set its sights on expanding delivery to small towns in rural America. These areas are typically served by post offices because they have higher costs and a smaller population than urban areas.
Amazon last year pledged to spend about $4 billion by the end of 2026 to triple the size of its local delivery network.
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