The week that was: 20 November 2009
USPS’ multi-billion dollar loss leads the news round-up as ‘The week that was’ concentrates on financial results. The strife of USPS has been widely reported through Post&Parcel’s news pages for months, with executives from the United States continuing their fight to cut costs during the recession and fighting against falling letter mail volumes. This week’s news that USPS has announced a net loss of $3.8bn for 2009 has come as no real surprise. This result comes despite its cost-cutting efforts resulting in $6bn in savings and a $4bn reduction in required payments for retiree health benefits. “Our 2009 fiscal year proved to be one of the most challenging in the history of the Postal Service,” said CFO Joseph Corbett. “The deep economic recession, and to a lesser extent the ongoing migration of mail to electronic alternatives, significantly affected all mail products, creating a large imbalance between revenues and costs.” Corbett said that USPS responded aggressively to unprecedented mail volume declines and the ongoing recession. “We undertook comprehensive cost-cutting measures across all areas of the organisation,” he said. “Most notably, we reduced work hours by 115m, or the equivalent of 65,000 full-time employees – a larger number than the entire workforce at more than 80% of Fortune 500 companies today.”
A quick flight across the Atlantic brings us to Austria, where the total revenue of Austrian Post fell by 3.4% in the first nine months of the 2009 to EUR 1,723.2m. Group revenue declined in the third quarter by 3.2%, to EUR 567.3m. Revenue in the Mail Division decreased considerably, falling 4.5%, which can be attributed to the economic downswing as well as the e-mail substitution of letters. Similarly, the company’s Parcel & Logistics Division also recorded a drop in revenue (- 2.4%). “On the basis of the ongoing difficult environment for providing postal services, it is important for me to carry out all possible measures at our disposal, both in terms of revenues as well as reducing costs, in order to optimally cope with this market situation”, said new CEO Georg Pölzl.
With the Americas and Europe already covered, Post&Parcel notes that FedEx has begun a domestic express service for the Indian market, more than a decade after setting up a base for international air cargo operations in the country. It has been reported that FedEx India would handle the domestic operations and to begin with it would offer delivery to 50 major Indian cities from 14 key cities. “We will cater to all important centers which constitute 60% India’s GDP. We will soon expand. India is a high growth market and it is driven by domestic consumption,” said Indranil Sen, managing director (marketing for Middle East, Indian subcontinent & Africa), FedEx.
And finally…
It’s not everyday you get to attend a sports luncheon with a World Cup winner, but business leaders from the mail, express and freight industries got to in London this week. Argentinean legend Ossie Ardiles headed-up a star-studded cast of former footballers – that included Ray Parlour, Rob Lee and Paul Merson – who enjoyed a lunch and auction event with industry executives at the Park Lane Hilton.
