Amazon cuts back Postal Service deliveries in new agreement 

Amazon has reached a tentative deal with the U.S. Postal Service, allowing the mail agency to maintain about 80 percent of deliveries for the e-commerce giant. 

The agreement for a 20 percent cut in Postal Service deliveries comes after months of negotiations with Amazon, which previously threatened a two-thirds or larger reduction, Reuters reported last month. 

The deal will come as a relief for the U.S. Postal Service, which is struggling financially. Postmaster General David Steiner warned last month that the mail agency will run out of cash in less than a year amid the decline in traditional mail and regulations. 

 “We’re pleased to have reached a new agreement with USPS [U.S. Postal Service] that furthers our longstanding partnership and will let us continue supporting our customers and communities together,” Terrence Clark, an Amazon spokesperson, wrote in a statement to The Hill Tuesday. 

The Postal Service did not immediately respond to request for comment. 

Amazon is the Postal Service’s largest customer, according to people with knowledge of the matter, with 1.7 billion of the company’s packages delivered annually. This is about 15 percent of the Postal Service’s total year package deliveries, equaling about $6 billion in annual revenue, The Wall Street Journal reported.

The Amazon contract was set to expire in September, and the tentative agreement must now be approved by the Postal Regulatory Commission. 

Amid negotiations in the past year, the Postal Service launched a new bidding solicitation for its last-mile delivery network.

Steiner said the bidding would help the Postal Service determine the true market value of the service, the Journal reported, but the bids did not meet the agency’s expectations and prompted the Postal Service to engage more directly in negotiations with Amazon.