Amazon and the U.S. Postal Service (USPS) have come to terms on a new agreement six months ahead of their current contract’s Oct. 1 expiration date.

According to separate reports from the Wall Street Journal and Reuters, the new deal would reduce the number of packages Amazon ships through the Postal Service by 20 percent. Under the new deal, USPS would still deliver more than 1 billion packages for Amazon per year.

The deal is a more moderate dial-down compared to figures indicated within prior reports, in which the e-commerce giant would have cut its business at the USPS by at least two thirds.

Amazon confirmed the deal, of which terms and length have not been disclosed. USPS has not commented on the matter.

“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 said in a statement.

The Postal Regulatory Commission (PRC), the federal agency that oversees the USPS, must now review and approve the agreement.

Amazon is the Postal Service’s top customer, generating more than $6 billion in annual revenue for the agency in 2025 and accounting for nearly 15 percent of its delivered packages, according to the reports. That number reaches 30 percent to 40 percent in some rural areas.

The reported revenue number would be roughly 7.5 percent of the national carrier’s $80.5 billion in revenue it reeled in last year.

A 20 percent cut in Amazon volumes would put a significant dent in revenue for the USPS, which has dealt with financial struggles for two decades. In 2025 alone, net losses at the Postal Service reached $9 billion, on top of the $9.5 billion lost in the year prior.

The agency blames its controllable losses in part to the six-day-per-week universal service obligation. According to the USPS, 71 percent of delivery routes are unprofitable, and roughly 60 percent of post offices do not cover the cost of their operations

The struggle for profitability suggests USPS still needs Amazon’s volume, even at a lower-than-traditional number. Last month, Postmaster General David Steiner told a House subcommittee hearing this month that the courier would be out of cash by as early as October if it continues operating at its current run rate without congressional assistance.

At the same time, parcel carriers have shown growing concern about dedicating a portion of their packages to Amazon. UPS is in the middle of a major decoupling with Amazon in which the former is reducing the number of parcels it delivers for the latter by 50 percent.

For Amazon, the e-commerce giant risked losing business in rural areas of the U.S. if a new deal saw a substantial downturn in packages carried, even as it spends $4 billion to furthers its own rural ambitions.

The logistics giants had been undergoing negotiations since last February, and at times appeared on rocky footing—leading to the earlier winddown threat.

In December, the USPS introduced a new auction process enabling retailers and logistics carriers to bid on access to its last-mile delivery network in a move that surprised Amazon, and likely threw a wrench in the contract negotiations between both parties.

Two months later, more than 20 companies submitted bids to have the Postal Service bring packages from 18,000 local post offices and delivery hubs to their final destinations.

According to the WSJ report, Amazon proposed cutting back its volumes by two thirds in the wake of the bidding process. The tech titan had recently been reaching out to other smaller carriers to see if they would take some of Amazon’s parcel volumes.

Both parties had returned to more direct negotiations after the parcel volume and revenue projections from several companies that submitted bids fell short of the federal agency’s expectations, the WSJ report said.

On Monday, the PRC approved the courier’s request to add an 8 percent fuel surcharge. The extra fee was implemented as the Postal Service aims to fend off higher transportation costs stemming from rising oil prices, which have escalated since the beginning of the war in Iran.

The fee will be effective April 26 through Jan. 17, 2027, but the charges are expected to be a “bridge” to a more permanent mechanism that could include different surcharges in the future.