Why is the USPS offering last-mile services to new customers?

The USPS is seeking to increase revenue and mitigate billions in ongoing financial losses by opening its last-mile delivery network to additional clients.

How much revenue does the Amazon contract generate for the USPS?

The contract with Amazon reportedly brings in approximately $6 billion annually to the US Postal Service.

What is 'universal service' for the USPS?

Universal service is the USPS's legal obligation to deliver mail nationwide at a single price, including to remote and expensive-to-reach locations.

Home / Business and Economy / USPS Risks Amazon Split Over New Delivery Plans

USPS Risks Amazon Split Over New Delivery Plans

24 Dec

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Summary

USPS faces potential cash shortage within 12-24 months.
Amazon contract reportedly generates $6 billion annually for USPS.
USPS plans to auction last-mile services, risking Amazon's partnership.

USPS Risks Amazon Split Over New Delivery Plans

The US Postal Service is considering opening its lucrative last-mile delivery services to new clients in an attempt to offset billions in ongoing financial losses. This strategic shift, aimed at securing additional revenue streams, carries a significant risk of alienating its most valuable customer, Amazon.

The agency has reported substantial deficits, with $9 billion lost in the twelve months prior to September. USPS officials have expressed concern over their financial stability, indicating a potential cash shortage within the next 12 to 24 months without intervention. While cost-cutting measures are in place, they are deemed insufficient to resolve the deep-seated financial challenges.

USPS plans to solicit bids from other shipping companies for access to its distribution centers. Amazon, a partner for over 30 years, has expressed surprise at this development and is evaluating its options, which could include significantly reducing its reliance on USPS. This situation highlights the delicate balance the postal service must strike between financial necessity and maintaining crucial partnerships.