Key insights
- The USPS has secured a significant $10 billion deal with DHL eCommerce for last-mile parcel delivery services in the US. This partnership allows DHL to leverage USPS's extensive delivery network, while providing USPS with crucial revenue amidst financial challenges. The agreement supports DHL's US market expansion and highlights USPS's unique position in the domestic logistics landscape, potentially improving its financial stability and operational capacity.
Investing.com -- The U.S. Postal Service announced Thursday it has secured a multi-year agreement with DHL eCommerce valued at more than $10 billion to manage last-mile parcel delivery services across the United States.
DHL eCommerce, the U.S. division of German logistics company DHL Group (ETR:DHLn), stated the partnership will support its expansion in the American market over the coming years.
The agreement establishes that DHL eCommerce will manage pickups and sorting operations at its 19 U.S. distribution hubs, while USPS will handle final delivery to customers.
The contract comes at a crucial time for USPS, which faces severe financial constraints and has warned it could exhaust its cash reserves as early as February. Last month, Amazon.com (NASDAQ:AMZN) finalized a new package delivery agreement with the postal service.
Postmaster General David Steiner noted that USPS is the only carrier that delivers to 170 million U.S. households six days weekly. He said the arrangement provides DHL access to the largest market globally.
Steiner explained that DHL would need to either invest substantial capital to build a complete delivery network or partner with an organization that possesses last-mile delivery capabilities like USPS. He described the agreement as mutually beneficial for both parties.
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