EXCLUSIVE-Amazon says it has reached deal with US Postal Service on package deliveries

By David Shepardson

WASHINGTON, April 6 (Reuters) - Amazon.com AMZN.O said Monday it has reached a new agreement with the U.S. Postal Service on package deliveries.

Sources told Reuters the deal will result in Amazon, which is USPS's largest single customer, retaining around 80% of its existing deliveries with USPS, or more than 1 billion packages per year.

Amazon’s plan to replace the Postal Service with its own nationwide delivery service posed an existential threat to the mail agency, which has a roughly $80 billion budget. Amazon represented $6 billion in annual revenue, according to two people familiar with the business arrangement.

"We're pleased to have reached a new agreement with USPS that furthers our longstanding partnership and will let us continue supporting our customers and communities together," Amazon said in a statement.

Amazon earlier had criticized USPS plans to auction off access to its last‑mile delivery network. The retailer had threatened to cut its delivery business at the cash-strapped Postal Service by at least two thirds, Reuters reported last month.

USPS did not immediately comment.