Amazon and the U.S. Postal Service have reached a new package-handling agreement, according to people familiar with the matter, after Amazon threatened to drastically cut back on the number of packages it sends through the struggling agency.
Instead of reducing the number of packages Amazon ships through the Postal Service by two-thirds by this fall, as outlined in an earlier proposal, the two sides now have a tentative deal that will result in a 20% reduction, the people said.
The Postal Regulatory Commission, the federal agency that oversees the Postal Service, must now review and approve the agreement.
The new tentative deal would still have the Postal Service deliver more than 1 billion packages for Amazon a year. The loss of revenue from the 20% cut, however, could hurt the Postal Service. It has grown to rely on the billions of dollars it makes from Amazon’s guaranteed volumes.
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