What a Privatized USPS Could Mean for Your Next Amazon Delivery?

What a Privatized USPS Could Mean for Your Next Amazon Delivery?
Fact checked by Vikki Velasquez

What a Privatized USPS Could Mean for Your Next Amazon Delivery?

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Privatizing the United States Postal Service (USPS) has been a controversial topic for years, gaining attention during Donald Trump’s first presidency when he called it a “joke.” With Trump back in office, the topic has emerged again.

The USPS incurred a $9.5 billion loss in 2024, up from a $6.5 billion loss in 2023. This urged Trump to call for privatization, believing that these losses were unsustainable and that this financial inefficiency warranted an overhaul. The impact of privatization would be enormous.

However, privatizing the service could mean slower deliveries, higher shipping costs, and even fewer services in certain locations—all of which could impact how you get your next Amazon package and how much you pay for it.

Key Takeaways

  • The United States Postal Service loses billions of dollars annually, which has prompted calls from President Trump to privatize the organization.
  • Privatization could result in higher costs, slower deliveries, and reduced services, particularly in rural areas where affordable options are already limited.
  • While Amazon relies on the USPS for its last-mile deliveries, it is expanding its own logistics network to reduce dependency.
  • Transforming the USPS into a private entity may remedy its financial issues but risks undermining its role in providing affordable and equitable service nationwide.

USPS and Privatization

The USPS operates under a “universal service obligation,” which means it must serve every address in the country at consistent rates, even in remote areas. This ensures equal access to mail and package deliveries for all U.S. residents.

Without this mandate, private companies may prioritize profit over service, and customers could incur higher costs as shipping fees increase, especially for less accessible areas, such as rural locations.

According to economist Bryce Quillin, co-founder of It’s A Working Title, “Currently, USPS offers some of the most affordable shipping rates, with Priority Mail averaging just over $8 per package compared to private carriers like FedEx and UPS, whose rates can be as much as 40% higher for similar services.” 

Important

The USPS plays a vital role in delivering mail and packages across the nation, including to remote rural areas where private operators, such as FedEx and UPS, charge much more or don’t cover altogether. It has also become the “last-mile” delivery service for e-commerce companies, like Amazon.

The USPS employs over 635,000 workers, making it one of the largest employers in the country. Privatizing the USPS could lead to many job losses or reduced benefits for employees, which would have adverse economic effects across the country.

Decrease in Usage

The calls for overhauling the USPS, however, are not unfounded. Due to the advent of digital communication, online banking, and bill payments, traditional mail has become obsolete.

In 2000, the use of first-class mail was at a high of 103.5 billion pieces and dropped to 45.98 billion pieces by 2023. Cato Institute determined the per capita basis of the 2023 mail volume was 37% of the 2000s.

Amazon and USPS: The Last-Mile Connection

Customers and USPS employees may not be the only ones who see the adverse impact of a privatized U.S. postal system. The impact would be felt among e-commerce companies, such as Amazon.

For Amazon, the USPS has been a critical component of its delivery process. The USPS’s ability to reach every U.S. address at a flat rate has allowed Amazon to offer extremely cost-effective delivery options to its customers, particularly in rural areas.

If the USPS were privatized, this could mean increased expenses for Amazon, which a portion would most likely be passed onto you as the customer, as well as possible operational disruptions, delaying how quickly you receive your packages. Customers may also notice:

  • Amazon’s discounted rates for bulk shipments could disappear
  • Its two-day shipping standard may be affected
  • Higher product prices or subscription fees

“A shift to privatized postal services may cause retailers to pass higher logistics costs onto consumers, potentially dampening demand and reducing profit margins in the short-run,” said Quillin.

Note

In 2023, the USPS had 31,123 locations, about 500 fewer than in 2015. However, the number of USPS retail customer visits dropped 28% during that time, indicating that some locations should be closed.

Amazon Insulates Itself

Amazon has taken steps to lessen the impact of a privatized USPS system. It’s possible the impact could be minimal as Amazon has been expanding its one- to two-day delivery capabilities to rural areas, and the USPS would handle fewer of those.

Amazon has been building out its logistics network in rural areas by using hyper-efficient warehouses, contracted drivers, and mom-and-pop shops. Because the company is seeing increased demand in remote areas, it seeks to increase its shipping and have more control over its deliveries.

Amazon also believes that offering faster delivery to rural customers will increase the rate at which customers in these areas purchase goods. This increased volume would offset the higher delivery costs through the fees Amazon charges its sellers.

By expanding its logistics network, Amazon is trying to deliver 90% of its packages. As of 2025, the company delivers about two-thirds of its own packages in the U.S. In 2023, the USPS delivered only 9% of Amazon’s packages and UPS handled approximately 8%.

Though Amazon can insulate itself from a privatized USPS, smaller retailers may feel more of the brunt. “Privatization could lead to price hikes as market forces replace USPS’s government-subsidized pricing model, disproportionately affecting small retailers that rely on cost-effective shipping to remain competitive,” said Quillin.

The Bottom Line

The debate on the privatization of the USPS raises many questions about the balance of efficiency, accessibility, and equality. While converting the USPS to a private entity could remedy many of its financial woes and streamline the entity, it risks impeding its role as a universal service provider.

For many Americans and e-commerce companies like Amazon, the impact could be significant, felt through higher costs and slower service. While companies like Amazon have the power to transform their businesses and mitigate the impact, smaller businesses and individuals don’t have such capabilities.

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