The U.S. Postal Service announced Thursday that it has secured a major long-term partnership with DHL eCommerce valued at more than $10 billion, a deal expected to significantly expand package delivery operations across the United States while providing a critical financial boost to the struggling postal agency.
Under the multiyear agreement, USPS will handle final-mile delivery services for DHL eCommerce shipments throughout the country, leveraging the Postal Service’s enormous nationwide delivery network.
DHL eCommerce, a division of Germany-based DHL Group, said the arrangement is expected to accelerate its expansion efforts in the American market over the coming years.
Postmaster General David Steiner said the Postal Service’s unmatched reach made it the obvious partner for DHL as the company seeks to strengthen its foothold in the United States.
“No one else delivers to 170 million U.S. households six days a week,” Steiner said, adding that the agreement gives DHL “the opportunity to play in the largest market in the world.”
Steiner explained that DHL faced two options if it wanted to dramatically grow its U.S. operations: either invest enormous sums building its own nationwide delivery infrastructure or work with an organization that already possesses the necessary network.
He said DHL either had “to invest a ton of capital to build out an end-to-end network, or they need to partner with someone that has that last mile capability” like USPS.
Under the deal, DHL eCommerce will continue managing package pickup and sorting operations through its 19 American distribution hubs, while USPS carriers will complete the final delivery stage to customers.
DHL eCommerce Americas CEO Scott Ashbaugh said the agreement positions the company for substantial long-term growth in the U.S. shipping market, particularly in handling somewhat heavier packages than it traditionally has focused on.
Ashbaugh also indicated that DHL may expand its physical footprint in the United States by opening additional hubs.
“We expect to roughly double our business by the 2030 horizon,” Ashbaugh said.
The agreement arrives at a crucial moment for the Postal Service, which has faced mounting financial strain and previously warned that it could exhaust its cash reserves as early as February.
The DHL partnership follows another significant development for USPS. Last month, Amazon reached a separate package delivery agreement with the Postal Service as the agency continues seeking major commercial partnerships to stabilize its finances.
{Matzav.com}
