The online retail giant Amazon announced Monday that it has finalized a fresh partnership agreement with the United States Postal Service for package delivery services.
According to sources familiar with the arrangement, the new contract allows Amazon to maintain approximately 80% of its current shipping volume through USPS, which translates to over 1 billion packages annually. Amazon serves as the postal service’s biggest individual client.
The agreement comes as welcome relief for the financially struggling mail agency, which operates on an $80 billion budget. Amazon’s business represents roughly $6 billion in yearly revenue for USPS, according to individuals with knowledge of the partnership terms.
The retail company had previously posed a significant challenge to the postal service by developing plans to establish its own nationwide delivery network, which could have eliminated the need for USPS services entirely.
In a prepared statement, Amazon expressed satisfaction with the outcome: “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.”
The negotiations became contentious after Amazon voiced opposition to postal service proposals to auction off access to its final-mile delivery infrastructure. The e-commerce company had previously warned it might reduce its delivery partnership with the cash-strapped postal service by at least two-thirds, according to earlier reports.
The U.S. Postal Service has not yet provided a response regarding the new agreement.
