Amazon’s Delivery Alliance Faces Uncertainty as USPS Plans Auction

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A foundational logistics partnership that has served Amazon for decades is now under threat. Reports indicate the United States Postal Service (USPS) is considering a competitive auction process for its services, a move that has introduced significant uncertainty into Amazon's long-term delivery strategy and briefly weighed on its share price this week.

While Amazon has been engaged in talks to renew and expand its contract with the USPS, which expires in October 2026, the postal service has reportedly charted a different course. According to information from the Washington Post, USPS head David Steiner is planning a "reverse auction" for early 2026. This mechanism would essentially open bidding for access to postal infrastructure, potentially inviting Amazon's rivals to compete for the capacity.

Company executives expressed surprise at this development, noting that discussions over the past year had been aimed at extending a collaboration that has lasted for thirty years. Amazon confirmed that negotiations are ongoing but acknowledged a significant gap remains to be bridged following the USPS's new auction strategy.

High Stakes for Both Sides

The financial implications of a partnership breakdown are substantial for both entities, though their relative positions have evolved. Amazon remains the single largest customer for the USPS, contributing over $6 billion in revenue for 2025 and accounting for approximately 7.5% of the agency's total income. For a postal service that reported a $9.5 billion loss last year, losing such a client would be a major blow.

However, Amazon has dramatically decreased its reliance on external carriers. Its in-house logistics network handled 6.3 billion parcels in 2024, a volume that is now close behind the USPS's 6.9 billion. Projections from Pitney Bowes suggest Amazon is on track to surpass the postal service in total parcel volume by 2028—a milestone that could be reached even sooner should the current negotiations fail.

Market Confidence Endures Despite Headwinds

Despite the logistical uncertainty and a share price dip to €196.80 on Thursday, the prevailing analyst view remains bullish. Market experts maintain their positive long-term outlook, with many investors believing Amazon possesses sufficient in-house delivery capacity to absorb any potential reduction in USPS services. The key factor for future share performance will be whether the two parties can agree on a new framework agreement before the proposed auction in early 2026.