Amazon Reportedly Inks Deal To Ship Over 1B Packages With USPS, Dragging Down UPS, FDX Stocks

• According to The Wall Street Journal, the federal agency that oversees the Postal Service, the Postal Regulatory Commission, must now review and approve the agreement.
• Last month, it was reported that Amazon is planning to reduce the number of packages shipped through the USPS by at least two-third by this fall.
• Amazon had previously relied significantly on UPS and FedEx, but has now significantly pulled back on volume.

Retail giant Amazon.com (AMZN) has reportedly inked a deal with the U.S. Postal Service under which the latter will ship more than one billion of its packages per year.

Reuters reported, citing sources, that Amazon retained around 80% of its existing deliveries with USPS under the deal, overturning its plan to replace the Postal Service with its own nationwide delivery service by a significant margin. The two companies instead zeroed in on a 20% reduction, the report said.

While shares of AMZN edged up 1% at the time of writing, shares of parcel carriers United Parcel Service Inc. (UPS) and FedEx (FDX) moved about 1% lower. While Amazon previously relied significantly on UPS and FedEx, it has now significantly pulled back on volume.

Amazon And USPS Partnership

Amazon is USPS’s single-largest customer, accounting for $6 billion in USPS’s annual revenue, as per Reuters. According to The Wall Street Journal, the federal agency that oversees the Postal Service, the Postal Regulatory Commission, must now review and approve the agreement. The 20% cut would still hurt the Postal Service, the daily noted.

Last month, it was reported that Amazon is planning to reduce the number of packages shipped through the USPS by at least two-third by this fall.

How Did Retail Traders React?

On Stocktwits, retail sentiment around AMZN stock stayed within the ‘bearish’ territory over the past 24 hours, while message volume remained at ‘normal’ levels.

Sentiment around UPS stock trended in the ‘extremely bearish’ territory at the time of writing, while sentiment around FDX shares stayed ‘bearish’.

AMZN shares have gained 21% over the past 12 months.

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