DHL eCommerce and the United States Postal Service announced a new exclusive multi-year contract on Wednesday for last-mile parcel delivery services in the U.S., valued at well over $10 billion.
The agreement is the largest in the two organizations’ 25-year relationship, the companies said. Packages move through DHL eCommerce’s 19 U.S. hubs, where the company oversees pickup and sorting operations, with USPS taking over at the final-delivery stage. The Postal Service’s network reaches more than 41,550 ZIP Codes and more than 170 million delivery points six days a week.
According to Reuters, Ashbaugh said the arrangement opens the door to expanding the company’s footprint in the United States and taking on somewhat heavier package weights. He also said the company could add more U.S. hubs. “We expect to roughly double our business by the 2030 horizon,” Ashbaugh told Reuters.
“This agreement creates a dependable, long-term platform for our customers,” Ashbaugh said in a statement. “Working with USPS allows us to serve communities nationwide in a highly efficient way, minimizing additional vehicles on the road and supporting our commitment to reducing emissions.”
Postmaster General and CEO David Steiner called the contract “an exciting milestone” in a statement. Speaking with Reuters, Steiner framed the agreement in terms of USPS’s unmatched reach, arguing that DHL’s realistic options were to pour significant capital into building its own nationwide infrastructure from scratch, or to lean on a partner already capable of completing the last mile — and that 170 million households receiving deliveries six days a week made USPS that partner.
DHL eCommerce is a unit of DHL Group, the German logistics company. Its U.S. operations focus on mid- to high-volume business-to-consumer retailers.
The deal is a significant win for a financially pressured USPS. The agency disclosed last month that its cash reserves could be exhausted before next year is out, and it has accumulated steep losses in recent years. Last month, USPS also reached a separate agreement with Amazon — its largest single customer — on package deliveries. That deal reduced Amazon’s shipping volume with the agency by 20%, well short of the two-thirds cut Amazon had earlier proposed.
