U.S. Postal Service secures DHL eCommerce delivery deal worth over $10 billion
The agreement expands the U.S. Postal Service's role in parcel delivery as it seeks new revenue sources amid financial strain. The multi-year contract covers last-mile parcel services across the United States and is expected to be worth more than $10 billion.
Highlights
- USPS secures a multi-year DHL eCommerce contract worth over $10 billion to provide last-mile parcel delivery across the U.S.
- DHL eCommerce will use its 19 U.S. hubs for pickups and sortation, then rely on USPS’s network to reach 170 million U.S. households six days a week.
- DHL expects this deal to support its U.S. expansion, targeting heavier parcels and potentially doubling its business by 2030.
Contract scope and network strategy
As reported by Reuters, the U.S. Postal Service said Thursday that it had reached a multi-year deal with DHL eCommerce under which USPS will provide last-mile parcel delivery services in the United States.DHL eCommerce, part of Germany's DHL Group, said the agreement will help it grow in the U.S. market over the next several years. Postmaster General David Steiner said in an interview that no other operator delivers to 170 million U.S. households six days a week, giving DHL access to what he called the world's largest market.
Steiner said DHL either had to invest significant capital to build an end-to-end network or partner with a carrier that already has last-mile capability such as USPS. Under the arrangement, DHL eCommerce handles pickups and sortation across its 19 U.S. hubs before USPS completes final-mile deliveries.
Growth plans and financial significance
DHL eCommerce Americas CEO Scott Ashbaugh said the deal would support the company's U.S. expansion and help it target slightly heavier parcels. He added that the company could add more U.S. hubs and expects to roughly double its business by the 2030 horizon.The contract is significant for USPS, which has warned that it could run out of cash as soon as February. The new DHL arrangement follows another package-delivery agreement announced last month by Amazon.com and the U.S. Postal Service.
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