Summing up the biggest stories of the week from the pages of Post&Parcel, including the US Postal Service historic default, positive signs for TNT Express, and Deutsche Post’s tax problems…
The US Postal Service defaulted on a payment to the federal government this week for the first time in history, refusing to pay $5.5bn for its Congressional mandate to prefund future retiree healthcare liabilities.
The default came as an audit of USPS finances forecast that it would be down to just $100m by October 2012. Blamed for more than 80% of the Postal Service’s losses in recent years, Congress took immediate action by going on vacation.
The Postal Service issued a statement insisting it still had the money to pay staff and suppliers. “This action will have no material effect on the operations of the Postal Service,” it said. “We will continue to deliver the mail, pay our employees and suppliers, and meet our other financial obligations.
UPS acquisition target TNT Express beat expectations to record improved results in its second quarter despite increasingly difficult economic conditions.
Overall revenues were up 1.7% to EUR 1.83bn for the three months to the end of June 2012, with operating income up 67% to EUR 77m. The company said it had been quite surprised by the stable volumes in Europe, Middle East and Asia considering the “challenging” economic conditions.
However, as with its rivals, TNT Express did see a significant shift by customers towards its more economic service options, but executives said continuing cost control measures had helped counter this shift to non-premium products.
Deutsche Post DHL revealed a good performance in its second quarter of the year – on an underlying basis.
While it recorded a 7.3% increase in revenues, thanks to a stable mail business, growing parcel volumes and supply chain numbers boosted considerably by Asia, net profits were down nearly a third because of requirements to repay VAT to the German government.
Along with a EUR 181m VAT repayment, Deutsche Post’s cash reserves were hit by a requirement to pay EUR 298m of state aid back to the German government after a long-running investigation by the EU Commission.
UPS revealed the shape of its global visibility system of the future – finger power. Staff are being given special scanning systems that fit on their fingers, to speed up package scanning and improve accuracy…