In a critical development for both Amazon and the U.S. Postal Service (USPS), a new agreement has been reached regarding package deliveries. This deal is pivotal as it allows USPS to retain approximately 80% of its existing deliveries from Amazon, which translates to about $6 billion in annual revenue for the postal service.

Amazon’s partnership with USPS is significant, with the postal service delivering around 1.7 billion packages annually for the e-commerce giant. This agreement comes at a time when USPS has been facing severe financial challenges, reporting net losses of $118 billion since 2007.

Previously, Amazon had threatened to cut USPS deliveries by as much as two-thirds, a move that could have resulted in over $1 billion in lost revenue for the postal service. The looming expiration of Amazon’s contract with USPS in September 2026 added urgency to the negotiations.

In response to the new agreement, an Amazon spokesperson stated, “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.” This sentiment underscores the importance of the collaboration for both entities.

USPS had recently warned that it could run out of cash as soon as October, amplifying the stakes of the negotiations. Additionally, Amazon had criticized USPS’s plans to auction off access to its last-mile delivery network, further complicating the relationship.

The new deal not only stabilizes USPS’s revenue stream but also ensures that Amazon can continue to rely on a robust delivery network as it expands its operations.

As the logistics landscape evolves, both companies will need to navigate ongoing challenges and opportunities. Details remain unconfirmed regarding the specific terms of the agreement and how it will impact future operations.