Amazon.com has reportedly struck a deal with U.S. Postal Service (USPS) that helps alleviate the United States government’s mail service’s financial difficulties.
USPS will preserve 80% of its package delivery business with the global technology giant, which is worth US$6 billion (A$8.7 billion) in annual revenue, according to Reuters.
The 20% reduction in volumes is significantly lower than the two-thirds cut initially feared, the news organisation reported in this article.
Reuters first reported on the deal, but other news organisations subsequently wrote about it, including the Wall Street Journal in this story and Barrons in this article.
USPS has been under increasing financial pressure, issuing a warning in March that it could run out of cash by October.
Amazon has been broadening its logistics network, including its ‘last-mile’ delivery capacity and is considering moving to other carriers, but is not considered likely to replicate USPS’s extensive reach, particularly in rural areas.
In a statement, the company said it was “pleased” to reach a deal that would extend the longstanding partnership, while USPS did not immediately comment, according to Reuters.
Amazon has previously criticised USPS plans to open parts of its delivery network to outside bidders, while simultaneously investing heavily in its own infrastructure.
USPS has reported cumulative losses of $118 billion since 2007 because of a plunge in first-class mail volumes to the lowest levels since the late 1960s and, in response, has lifted prices.
