Parcel delivery firm DHL eCommerce will use the United States Postal Service (USPS) as its exclusive provider of last-mile delivery service, under a “multi-year,” $10 billion agreement announced today.
Specifically, the deal will see DHL eCommerce continue to handle nationwide pickup, sortation across its 19 fully automated hubs, and linehaul on its air and ground network before partnering with USPS to complete the final mile for all deliveries. Through that approach, DHL eCommerce will tap into USPS’ final-mile network, which reaches more than 41,550 ZIP Codes and more than 170 million delivery points six days a week.
The exact length of the deal was not disclosed, but the deal marks an extension of the 25-year partnership between Florida-based DHL eCommerce and USPS.
According to DHL eCommerce, strengthening that relationship with USPS will help it capitalize on accelerating e‑commerce trends, and expand in the U.S. market over the next several years through its domestic and international services. More specifically, in its efforts to keep up with e-commerce growth rates, the firm intends to double its parcel business by 2030, Scott Ashbaugh, the CEO of DHL eCommerce Americas, said in a video press conference.
But to reach that goal, the firm needed a dedicated last-mile service provider. As the business to consumer (B2C) parcel arm of German logistics giant DHL, Ashbaugh said that DHL eCommerce Americas had three options for obtaining that service: building the network itself, acquiring an organization to provide the service, or partnering with an existing last-mile company. Today’s announcement means it chose the third option.
USPS Postmaster General David Steiner described the deal as a “win-win” move, saying that DHL didn’t want to spend the “massive amount of capital” it would cost to build out its own last-mile network, so it turned to USPS’ existing network instead. Those USPS operations include 160,000 street corner mailboxes, 230,000 delivery trucks, 170 million delivery addresses across the country, and 620,000 employees, Steiner said.
