Amazon said Monday (April 6) that it has reached a new deal with the United States Postal Service (USPS) in which the postal agency will continue to make 80% of the package deliveries it currently makes for the retailer, Reuters reported Monday.
In March, Amazon threatened to cut two-thirds or more of the package deliveries currently made by USPS, according to the report.
Now, Amazon said that while it will continue to expand its delivery capabilities, it will stop short of the reach offered by USPS, per the report.
“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,” Amazon told Reuters.
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The USPS did not immediately reply to PYMNTS’ request for comment.
The Wall Street Journal reported Monday that Amazon and USPS reached a deal, adding that the deal is tentative and must be approved by the Postal Regulatory Commission.
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The report said 15% of the packages delivered by USPS come from Amazon. It added that while Amazon has been expanding its one- and two-day delivery services in rural areas, the company still relies on USPS for many rural deliveries.
It was reported in March that Amazon revealed its plan to reduce the number of packages it ships via USPS during the bidding process for USPS’ last-mile delivery services, when the postal service solicited bids from Amazon and other businesses for the first time.
Sources with knowledge of the matter told PYMNTS at the time that the USPS decision to introduce an auction led to uncertainty for Amazon around available capacity and pricing, leaving the company with no long-term visibility to plan for having to reallocate hundreds of millions of packages late in the contracting cycle. This left Amazon to build alternative capacity.
The USPS had announced about three months earlier, in December, that it planned to make its last-mile delivery service available to shippers of all sizes and would soon begin accepting bids. Previously, USPS had offered only a limited number of very large customers delivery service direct from its 18,000 delivery destination units (DDUs).
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