USPS adds 8% surcharge to cover shipping costs, fuel prices rise
The average cost of a gallon of gas on Long Island is up 17 cents from last week and $1.02 from this time last month, according to AAA.
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Amazon.com announced Monday that it has reached a new agreement with the U.S. Postal Service for package delivery, with the cash-strapped postal system retaining about 80% of existing deliveries from its largest customers, people said.
This 20% cut is a dramatically better outcome for the Postal Service than the more than two-thirds cut that Reuters reported that Amazon threatened last month.
The USPS warned last month that it could run out of cash as early as October and that the risk of Amazon replacing its carriers by expanding its own delivery network or using competitors is an existential threat.
Amazon will continue to expand its delivery footprint, but it won’t be able to match the per-address reach of the USPS, the people said.
Reuters first reported the deal.
The USPS has a budget of about $80 billion, and Amazon represented $6 billion in annual revenue for the agency, according to two people familiar with the deal.
“We are pleased to have reached this new agreement that further strengthens our long-standing partnership with the USPS and allows us to continue supporting our customers and communities together,” Amazon said in a statement.
USPS did not immediately comment. U.S. Postmaster General David Steiner told Reuters in December that the USPS delivers about 1.7 billion packages to Amazon annually.
Amazon has criticized USPS’ plan to auction off access to its last-mile delivery network. Amazon announced in April 2025 that it would spend more than $4 billion to expand its U.S. rural delivery network by the end of 2026.
Last month, the USPS announced it was seeking approval to temporarily increase priority mail and package delivery rates by 8% starting April 26 to combat rising shipping and fuel costs.
Steiner said in March that raising the price of first-class stamps from the current 78 cents to 95 cents would help the USPS cut losses.
The USPS has reported a $118 billion net loss since 2007 as the volume of first-class mail, its most profitable product, fell to its lowest level since the late 1960s.
