USPS and DHL sign $10 billion package delivery deal

The United States Postal Service announced a $10 billion deal Thursday to deliver packages for DHL eCommerce, a division of German shipping company DHL. The agreement covers what the industry calls "last-mile" delivery—the final step of moving packages from distribution centers to customers' doors.

USPS expanded its business model in December when it opened its delivery network to large and small shippers beyond its existing arrangements with Amazon and UPS. Last-mile delivery is the most labor-intensive part of the shipping process, but also critical to customer satisfaction.

Postmaster General David Steiner said USPS reaches 170 million locations six days a week, making it uniquely positioned for this work. "We are the best last-mile provider by default," Steiner told reporters. "For us, this is a matter of meeting the customers where they are and meeting the customers' needs." The USPS and DHL did not disclose the full length or other terms of the multi-year commitment.

The deal helps USPS generate new revenue. In March, Steiner told the Associated Press the postal service could run out of cash within a year unless Congress removes a decades-old borrowing cap that restricts the agency's financial flexibility.

Scott Ashbaugh, CEO of DHL eCommerce Americas, said the partnership benefits DHL's U.S. operations. "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.