Amazon finds itself in a defensive position following reports of its plan to reduce shipments through the United States Postal Service (USPS), which is facing financial challenges. The Wall Street Journal revealed that Amazon intends to slash USPS shipments by at least two-thirds by fall, coinciding with the expiration of their current contract. Amazon asserts that negotiations soured when the USPS abruptly withdrew from discussions for a new contract.
The USPS currently handles a significant portion of Amazon’s last-mile deliveries, particularly in remote areas where costs are higher. While Amazon has been investing in its delivery network, the USPS still plays a crucial role, especially in rural locations. The USPS’s financial woes have been exacerbated by discounted shipping rates provided to major shippers like Amazon, a practice the agency is now reconsidering.
To boost revenue, the USPS has introduced a new bidding process for last-mile delivery services. This move comes as the agency faces a critical financial outlook, with concerns raised about its sustainability if current operations persist. Amazon’s shift away from extensive USPS utilization underscores the evolving dynamics of last-mile delivery in the ecommerce landscape.
Source: The Verge