Amazon, USPS and risk of a widening delivery divide in rural America

Key Points:

• Amazon plans to reduce the volume of packages it ships through USPS by about 20%, or 200 million shipments annually, shifting more deliveries to its own network, pending Postal Regulatory Commission approval.
• This reduction could increase USPS shipping costs and reduce service reliability, especially in rural areas, as fixed delivery network costs are spread over fewer packages, potentially leading to higher prices and slower deliveries.
• Rural deliveries are more expensive due to lower volume and density, with carriers already charging surcharges for remote areas; small businesses and rural consumers are expected to face price increases and less frequent service first.
• Despite the shift, Amazon will still rely on USPS for rural deliveries where it is more cost-effective, while continuing to expand its own logistics network to improve delivery speeds and control costs.
• The changes may lead to higher shipping costs for third-party sellers on Amazon and potentially higher prices or fewer free shipping options for non-Prime consumers, while Prime members are likely to remain insulated from immediate cost increases.