USPS, DHL partner in a $10 billion 'last-mile' delivery agreement

Audio By Carbonatix

NEW YORK (AP) — The United States Postal Service said Thursday it reached a $10 billion deal to provide “last-mile” package delivery services for DHL eCommerce, an arm of German package services provider DHL.

The USPS said in December it intended to open its last-mile delivery network to large and small shippers, expanding beyond current arrangements with Amazon and UPS.

Last-mile delivery refers to the final step of getting a package from a local distribution center to a customer’s door, the most labor-intensive part of the delivery process.

Postmaster General David Steiner said in a call with reporters that since the USPS delivers to 170 million locations six days a week, “we are the best last-mile provider by default.”

“For us, this is a matter of meeting the customers where they are and meeting the customers' needs,” he said.

The USPS and DHL said the agreement is a multi-year commitment, but did not elaborate.

Under Steiner, the USPS has been trying to expand the 250-year-old postal service's revenue base. In March, Steiner told The Associated Press that the USPS could run out of cash within a year, unless Congress lifts a decades-old cap and allows the agency to borrow more money.

Scott Ashbaugh, CEO of DHL eCommerce Americas, said the deal will help DHL eCommerce grow in the U.S.

“Working with USPS allows us to serve communities nationwide in a highly efficient way, minimizing additional vehicles on the road and supporting our commitment to reducing emissions," he said.