The U.S. Postal Service announced a multi-year agreement with DHL eCommerce on Thursday to handle last-mile parcel deliveries in the United States, a contract the agencies expect to exceed $10 billion in total value.
Under the terms described by both organizations, DHL eCommerce - a unit of the German logistics company DHL Group - will conduct pickups and sortation at its 19 U.S. hubs. The Postal Service will then perform the final-mile delivery to residences nationwide.
Postmaster General David Steiner emphasized the scale advantage the Postal Service brings to the partnership, noting that no other delivery provider reaches 170 million U.S. households six days a week. Steiner said the arrangement gives DHL "the opportunity to play in the largest market in the world." He added that DHL faced a choice: "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.
Senior DHL eCommerce executives framed the contract as central to their U.S. expansion plans. Scott Ashbaugh, CEO of DHL eCommerce Americas, said the pact will support growth in the United States and enable the company to target slightly heavier parcels. He also indicated that the company could expand its physical footprint in the country by adding additional hubs.
"We expect to roughly double our business by the 2030 horizon," Ashbaugh said.
The agreement arrives at a sensitive moment for the Postal Service. The agency has issued warnings that it could run out of cash as soon as February, making the new revenue stream particularly consequential for its near-term finances.
The new deal with DHL follows recent developments in the parcel-delivery market, including a separate announcement last month that Amazon.com had reached a new agreement with the Postal Service on package deliveries.
Operationally, the deal leverages DHL eCommerce's hub-based sortation and the Postal Service's expansive delivery network to combine capabilities rather than having DHL invest in a full nationwide delivery infrastructure itself. Both parties have described the partnership as supporting DHL's expansion in the U.S. while providing the Postal Service with significant contract revenue.
Details beyond the broad financial expectation and the description of roles - DHL handling pickups and sortation across 19 U.S. hubs and USPS completing last-mile deliveries to 170 million households six days a week - were not disclosed in the announcement.
Market and sector implications: The pact affects logistics, e-commerce distribution, and postal operations. Carriers, parcel sortation services, and retailers that rely on delivery networks are among the sectors likely to monitor the operational execution and commercial terms as the contract is implemented.