Amazon Leaves Unprofitable Delivery Routes for USPS

It’s Amazon’s world, and we’re all just living in it. As shown in a recent study by Axios, Amazon’s biggest shipper by percentage of package volume is now the company itself. While these metrics are great for Amazon, this paradigm shift poses a problem for other shipping carriers. Now that Amazon transports most of its packages in the company’s own delivery network, it leaves the unprofitable routes to other carriers like USPS.

Why USPS Gets the Short End of the Stick

Unfortunately, USPS will suffer the most out of all the major shipping carriers. As the below chart shows, USPS’ share of Amazon’s shipments has steadily decreased since 2017. As Amazon continues to adopt more packages into its network, Amazon will obviously hone in on the most profitable routes. Naturally, the routes that Amazon does leave for other carriers like USPS won’t have much built-in profitability. However, USPS will get the shortest end of the stick here because UPS and FedEx never took on as much volume as USPS did for Amazon, anyway.

How This Could Affect USPS’ Business in the Long Term

Amazon accounts for just about 50% of all eCommerce in America. While physical retail keeps slowing down, eCommerce is expected to grow massively over the next few years (and beyond). As Amazon transports a higher number of packages in its network, more eCommerce parcels will get taken away from USPS. Simply put, losing this much package volume is something the Postal Service can’t really afford, considering the financial situation USPS is currently in.