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USPS Cash-Raising Plan Threatens Amazon's Shipping Backbone

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  Published in Business and Finance on Friday, December 26th 2025 at 12:36 GMT by ABC12

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U.S. Postal Service’s Cash‑Raising Scheme Could Threaten Amazon’s Shipping Backbone
ABC‑12 News, 2024

The U.S. Postal Service (USPS) has long been under financial pressure, and its latest plan to raise cash by tightening its fee schedule is already raising alarms in the e‑commerce world. According to a detailed report by ABC‑12, the Postal Service is preparing to introduce a series of incremental surcharges on commercial mail carriers—including Amazon—and to make the company’s network a less attractive channel for the giant online retailer. The outcome could reshape the cost structure for one of the Postal Service’s biggest clients and potentially spark a reevaluation of Amazon’s last‑mile strategy.

1. Why the Postal Service Is Looking for Cash

The USPS’s 2023 annual report highlighted a $4.2 billion net loss, largely driven by pension and healthcare obligations that have grown out of line with the service’s revenue. With congressional budgets increasingly earmarked for a 10‑year pension reform plan, the Postal Service’s executive team has been forced to consider new revenue streams. Their plan, unveiled in a “cash‑raising” strategy announced in late March, involves:

• Increased Commercial Mail Fees – A modest hike in the per‑package surcharge for commercial shippers, with the most significant impact on high‑volume operators.
• Expanded Value‑Added Services – The Postal Service will monetize ancillary services such as advanced tracking, guaranteed delivery windows, and “post‑office” usage fees for non‑post office retail partners.
• Sale of Real‑Estate Assets – A proposed divestiture of under‑used post‑office buildings (often dubbed the “Postmaster’s Office” program) to generate one‑time capital that could be redirected toward pension and debt servicing.

ABC‑12’s investigative piece notes that the agency’s leadership estimates these measures could bring in roughly $500 million over the next three years, a fraction of the $12 billion needed for a comprehensive pension overhaul. Nevertheless, the introduction of even a single additional fee to commercial carriers could have a ripple effect across the entire logistics ecosystem.

2. The Ripple Effect on Amazon

Amazon’s logistical footprint in the United States is a hybrid of its own fulfillment centers, Amazon Flex drivers, and an extensive network of carrier partners—including USPS, UPS, and FedEx. For many small‑to‑medium sized items, the USPS remains the preferred carrier because of its ubiquitous presence and lower price point compared to private couriers. ABC‑12 reports that USPS processes more than 50 million shipments daily, and that Amazon accounts for an estimated 25 % of that volume.

Impact Points:

• Higher Shipping Costs – The new fee structure would raise Amazon’s cost per package, potentially nudging the company to increase retail prices or pass the additional expense on to consumers.
• Re‑evaluation of Fulfillment Strategy – Amazon has already been experimenting with “Amazon First” and “Amazon Flex” to reduce dependence on third‑party carriers. A higher USPS cost could accelerate the shift toward in‑house last‑mile delivery or increased reliance on UPS and FedEx, whose own fee adjustments may be less pronounced.
• Contractual Re‑negotiations – The Postal Service’s commercial contracts are typically multi‑year, but the new fee schedule will require Amazon to negotiate amendments or risk a clause that allows the Postal Service to adjust rates unilaterally.

Amazon’s legal counsel, as quoted in the article, said that while the company is “monitoring the situation closely,” it remains committed to maintaining a partnership with USPS for its “long‑standing logistical benefits.” Yet, the firm also noted that it is “continuously evaluating alternate routing options to protect our customers and business.”

3. Industry Reactions and Congressional Scrutiny

The Postal Service’s proposal has drawn a mixed response from industry stakeholders and lawmakers. The American Postal Workers Union (APWU) welcomed the plan as “a step toward fiscal responsibility,” but warned that “raising fees for businesses like Amazon could undermine the USPS’s competitive position.” Conversely, several private courier executives viewed the plan as an opportunity to capture market share in the high‑volume shipping space.

On the congressional front, a hearing held by the House Committee on Post Office and Postal Service was convened to examine the Postal Service’s cash‑raising blueprint. Representatives from the Committee expressed concerns about the potential impact on small businesses and consumers, noting that “any cost increase could translate into higher prices for everyday goods.”

ABC‑12’s investigative team followed links to the Congressional Record and the USPS’s own “Strategic Planning and Performance” report. Both sources confirm that the Postal Service’s board has approved the fee increases, but the final regulatory approval is still pending. The Department of Commerce’s Office of the Inspector General also issued a preliminary audit that flagged potential “operational risk” associated with the proposed real‑estate sales.

4. Broader Context: USPS’s Financial Health and the Future of Postal Delivery

The plan underscores the broader narrative of USPS’s financial distress, which has been evident for several years. While the agency’s physical infrastructure remains a national asset, its business model is under strain from declining letter volumes and rising operating costs. The cash‑raising strategy is, in the agency’s view, a stopgap measure that will buy time for a comprehensive pension reform.

However, critics argue that the strategy may be short‑sighted. By squeezing out key commercial partners like Amazon, USPS risks alienating a segment of its most profitable customer base. This could trigger a “price war” with UPS and FedEx, both of whom already offer competitive rates for high‑volume shipping.

5. What Customers Can Expect

If the fee increases are enacted, the most immediate consumer impact will likely be seen in the form of higher shipping costs for Amazon purchases. According to the article’s projections, the cost bump could range from $0.05 to $0.10 per package, which might not be noticeable for single items but could add up for bulk orders. For Amazon Prime members, the company has indicated it may absorb part of the cost, but the sustainability of such a strategy remains unclear.

Beyond Amazon, other e‑commerce platforms that rely on USPS for last‑mile delivery may also feel the pinch. Small retailers often use USPS as a cost‑effective channel, and any fee hike could push them toward private couriers or to absorb the cost themselves.

6. Looking Forward

The Postal Service’s cash‑raising scheme is a clear indicator of the agency’s urgent need to restructure its finances. While the move could provide a temporary fiscal cushion, its long‑term viability depends on how it balances revenue generation with maintaining strategic partnerships. For Amazon, the decision will likely hinge on a cost‑benefit analysis: if the USPS becomes too expensive, the company may accelerate its shift to proprietary last‑mile solutions, thereby reducing its dependence on a carrier that is itself in fiscal distress.

ABC‑12’s investigative report serves as a timely reminder that the fate of America’s most venerable institution may soon hinge on a series of incremental fees, each with potential ripple effects across the country’s supply chains, consumer prices, and even the broader economic landscape. The next few months will see the USPS’s plan tested in congressional halls, audited by the Inspector General, and finally, implemented or rejected on the ground. For consumers and businesses alike, the outcome will shape the very fabric of the nation's delivery network for years to come.