The United States Postal Service (USPS) has officially announced a pivot that could reshape American e-commerce logistics. Starting in late January or early February 2026, the agency will open its "last-mile" delivery network to a competitive bidding process, allowing retailers and logistics carriers of all sizes to bid for access to its 18,000 local Delivery Destination Units (DDUs).
This move, described by Postmaster General David Steiner as a way to "democratize" access, effectively ends the era of preferential treatment for the USPS's largest client: Amazon.
The "Fraught" Partnership
For years, Amazon has been the Postal Service's largest customer, generating over $6 billion in annual revenue (roughly 7.5% of the agency's total) by injecting parcels deep into the postal network for final delivery. However, this symbiotic relationship has turned "fraught" as the current contract approaches its October 2026 expiration.
According to reports from The Washington Post and other outlets in December 2025, negotiations between the two giants have stalled. The core conflict lies in the new bidding model:
- USPS Position: The agency wants to implement a "reverse auction" or competitive bidding system where capacity goes to the highest bidder, rather than locking in low fixed rates for a single dominant player.
- Amazon Position: Unwilling to compete in an open auction for capacity it previously monopolized, Amazon is reportedly preparing "contingency plans" to pull its volume from the USPS entirely.
The New Bidding Process: How It Works
For the first time, regional carriers, 3PLs, and other major retailers (like Walmart or Target) will have the same opportunity as Amazon to inject packages directly into local post offices for same-day or next-day final delivery.
- Timeline: Bidding opens in early 2026. Winning bidders will be notified in Q2 2026, with service commencing in Q3 2026.
- Mechanism: Shippers will propose a combination of volume and pricing for specific locations.
- Goal: The USPS aims to replace Amazon's potentially lost volume with a diversified mix of clients, reducing its dangerous reliance on a single company that is aggressively building its own competing delivery network.
If Amazon follows through on its threat to walk away, it would accelerate the company's shift toward a fully verticalized supply chain. Amazon has already built a massive internal network that handles nearly 50% of its own deliveries. Losing the USPS would force Amazon to rely entirely on its own vans and "Amazon Flex" drivers for rural and difficult-to-reach addresses—areas where the USPS has historically been the most cost-effective option.
For other merchants, this is a rare window of opportunity. The "democratization" of the DDU network means that smaller logistics players may finally be able to offer rates and speeds competitive with Prime, leveling the playing field just as the dominant player loses its advantage.
The 2026 logistics landscape is shifting rapidly. If you are looking to diversify your carrier mix or take advantage of the new USPS bidding process, Linktrans can help. Contact us today to strategize your last-mile approach before the new rates take effect.
04 Jan, 2026
