Amazon (AMZN) and USPS Agree New Package Deal With 20% Volume Cut

TLDR

• Amazon and USPS have agreed a new parcel-delivery deal, retaining ~80% of existing package volumes
• The deal is a much better outcome for USPS than the two-thirds cut previously threatened by Amazon
• USPS will deliver around 1 billion packages annually for Amazon under the new arrangement
• FedEx (FDX) fell 0.8% to $358.91 and UPS fell 1% to $97.16 following the news
• UPS is separately cutting Amazon delivery volume by over 50% by late 2026

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Amazon and the U.S. Postal Service have struck a new package delivery deal, pulling back from what could have been a devastating blow to the cash-strapped mail carrier.

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 agreement keeps USPS delivering roughly 1 billion packages a year for Amazon — about 80% of its current volume. That’s a far cry from the two-thirds cut Amazon had previously floated.

Amazon called it a continuation of their “longstanding partnership.” USPS didn’t immediately comment.

Amazon is USPS’s biggest customer, accounting for around $6 billion of the agency’s roughly $80 billion annual budget. Losing that revenue would have been painful. USPS warned last month it could run out of cash as early as October.

Amazon.com, Inc., AMZN

The deal still needs formal approval.

What This Means for UPS and FedEx

The news rattled rivals. FedEx (FDX) dropped 0.8% to $358.91 at the close, while UPS fell 1% to $97.16.

UPS is already in the process of cutting its own Amazon delivery volumes. Back in January 2025, UPS announced a deal with Amazon to reduce volume by more than 50% by the second half of 2026. That’s a deliberate strategic shift away from Amazon dependency.

FedEx, on the other hand, went the other way — signing a multiyear delivery deal with Amazon in May 2025.

Amazon’s Own Delivery Push Continues

Amazon isn’t stepping back from building out its own delivery network. In April 2025, the company said it would invest more than $4 billion to expand rural delivery coverage across the U.S. by the end of 2026.

That expansion will continue — just not at a scale that would directly rival USPS’s address-by-address reach, according to sources.

USPS, meanwhile, is looking for more ways to shore up its finances. The agency is seeking approval for a temporary 8% price hike on priority mail and packages, set to kick in April 26. Postmaster General David Steiner has also proposed raising first-class stamp prices to 95 cents from the current 78 cents.

USPS has racked up $118 billion in net losses since 2007, driven largely by the collapse of first-class mail volumes, which have fallen to their lowest level since the late 1960s.

Steiner previously told Reuters that USPS delivers around 1.7 billion packages annually for Amazon, making the 1 billion figure under the new deal a meaningful reduction — but still well above what Amazon had threatened.

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