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DHL Taps USPS for Last-mile US Deliveries in New $10 Billion Deal

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DHL Taps USPS for Last-mile US Deliveries in New $10 Billion Deal

DHL eCommerce, the US unit of German logistics group Deutsche Post (DHL.F), d/b/a DHL Group, further strengthened its 25-year partnership with the United States Postal Service by appointing the latter as its exclusive provider for last-mile parcel deliveries across the US.

Under the multi-year deal, valued at more than $10 billion, USPS will manage the final stage of delivery for all DHL eCommerce shipments moving through the company's 19 nationwide hubs, the companies said Thursday. Last-mile delivery refers to the final leg of the supply chain, transporting goods from a distribution hub to customers' doorsteps.

DHL eCommerce Americas Chief Executive Scott Ashbaugh said the deal will help the company expand its services while reducing the number of delivery vehicles on the road and lowering emissions.

Speaking to reporters during a same-day media webinar, Ashbaugh said the new arrangement differs from the companies' previous contract due to its longer duration, enabling DHL eCommerce to secure longer-term agreements with its customers, Supply Chain Dive reported.

The exact length of the multi-year agreement was not disclosed.

The deal also provides a financial boost to USPS, which recently warned of a cash crisis and called on Congress to expand its borrowing authority to support operations and long-term stability.

Since DHL eCommerce does not prefer investing heavily in developing its own last-mile network in the US, the deal is "a total win-win," Postmaster General and USPS CEO David Steiner said at the webinar.

Shares of DHL Group edged higher in early trading in Germany.

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