Amazon and the USPS at odds over business relationship concerning package deliveries: What this means for you

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A US Postal worker delivers Amazon boxes (Photo by Spencer Platt/Getty Images)

After failing to come to a new business agreement, e-commerce giant Amazon looks to be reducing their shipments through the U.S. Postal Service, Reuters reports. 

According to U.S. Postmaster General David Steiner, Amazon is considered the biggest customer of the USPS and uses it nearly two billion times a year to deliver packages to consumers. However, the business has already started reducing postal shipments and plans to have them cut by at least two-thirds by end of their current contract. 

Amazon, USPS contract woes

Dig deeper:

The two have been in negotiations for over a year about extending their relationship. Steiner told a U.S. House committee that the USPS could be out of cash within the next year. In an effort to raise funds, in January the USPS began an auction process to take proposals for its last-mile delivery network, according to Reuters.  

What they're saying:

In response, Amazon said it was "surprised" USPS wanted to run an auction, stating they wanted to increase their volumes with USPS. 

"We negotiated with them in good faith for over a year to try and reach a deal that would bring them billions in revenue and believed we were heading toward an agreement, when the USPS abruptly walked away at the 11th hour and introduced the auction concept," Amazon said in a statement. 

The backstory:

Last year, Amazon said they intended to spend more than $4 billion to expand its deliveries in rural areas to meet the demand of shoppers in small towns and the countryside. 

Timeline:

Their contract with the Postal Service ends in September.