Amazon has reached a new agreement with the United States Postal Service that will see the agency retain around 80 per cent of its package delivery volumes from the retailer, easing concerns over a far steeper cut previously under consideration.

Reuters reported that the deal, announced on 6 April, represents a significant shift from earlier plans in which Amazon had threatened to reduce its reliance on USPS by two-thirds or more. People familiar with the arrangement said the revised terms limit the reduction to about 20 per cent, preserving the bulk of a partnership that generates billions in annual revenue for the postal service.

Amazon said in a statement that “we’re pleased to have reached a new agreement with USPS that furthers our longstanding partnership and will let us continue supporting our customers and communities together”. USPS did not immediately respond to requests for comment.

The agreement is critical for USPS, which has warned it could run out of cash as soon as October. The agency has reported cumulative losses of $118 billion since 2007, driven by a long-term decline in first-class mail volumes, and has increasingly relied on parcel deliveries to offset the shortfall.

People familiar with the relationship said Amazon accounts for roughly $6 billion in annual revenue for USPS, representing about 15 per cent of total package volumes. A more severe reduction had raised concerns about the financial viability of the postal service, given its dependence on large commercial customers.

The Wall Street Journal reported that the deal remains tentative and is subject to approval by the Postal Regulatory Commission. The publication said the revised arrangement would still result in USPS delivering more than one billion Amazon packages annually, despite the reduced volume.

Amazon’s broader logistics strategy remains focused on expanding its in-house delivery network, including a plan announced in April 2025 to invest more than $4 billion in rural delivery capacity by the end of 2026. However, sources told Reuters the company is unlikely to replicate the full nationwide reach of USPS, particularly in remote areas.

Postmaster General David Steiner told Reuters in December that USPS handled about 1.7 billion packages annually for Amazon, highlighting the scale of the partnership. The agency has also proposed price increases, including an 8 per cent rise in priority mail and package delivery rates, to address rising costs.

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