The year that was: 2011 (Part Two)
Our annual review of the year continues with a look back at the key events that shaped the mail and express industry in the second quarter of the 2011 calendar year… This quarter saw USPS struggling as mail volume declines accelerated, Canada Post rocked by a major strike and national lock-out, the demerger of TNT and global integrators building up their international networks, although there were early signs of a slowdown in air cargo.
Republicans in Congress grilled USPS on the cost effectiveness of a new union deal, while Democrats proposed a multi-billion dollar rebate to help its financial struggles. But in the meantime, USPS unveiled a number of product developments it hoped would help take control of its losses, from a simplified address mail service for small businesses and a regional service for e-commerce to a discount aiming to promote the use of smartphone QR codes in mail, as well as forming key partnerships to expand international mail volumes.
The global integrators were building up their international service coverage, including FedEx in the Middle East and Asia, with fast-growing Latin America also a key focus for developing services for those like UPS and TNT.
TNT revealed the shape of its forthcoming demerger, with postal operations set to be branded “PostNL”, though keeping the famous orange colour.
As USPS losses continued to spiral, the Postal Service prepared to mount a significant reduction in its processing infrastructure, while also in this month a major collective bargaining agreement with the American Postal Workers Union was signed to help cut costs. But mail volumes were suddenly declining at a much faster rate.
The Brazilian government decided to introduce reforms to modernise the country’s Post and Telegraph Company, giving it scope to provide a broader range of services, and to operate abroad.
Although profits fell just ahead of its demerger, TNT shareholders gave the go-ahead to the company’s splitting into TNT Express and PostNL.
Also this month, a volcanic eruption in Iceland caused transatlantic delays, while union talks in Canada threatened to turn into all-out strike action at Canada Post.
And as June arrived, postal workers in Canada decided to strike. Despite rotating around different cities to minimise disruption, the strikes saw the Canadian public deciding not to use the mail, leading to Canada Post calling a full national shutdown to minimise its losses. The situation required back-to-work legislation from the government to resolve at the very end of the month.
There were early signs that international air cargo volumes were not progressing well, but the global integrators were pressing ahead with expansion of their network capacity, particularly in Asia. DHL planned to expand in Indonesia and invested in three new aircraft for the Asian region, as well as launching new intercontinental routes.
In the US, House Republicans introduced “sweeping” reform measures, as warnings came that USPS was not reducing the size of its network fast enough to keep up with declining mail volumes.
Meanwhile, an interesting conference in the US saw search giant Google revealing what it would do if it ran the US Postal Service.
(The year that was 2011 will continue with Part Three tomorrow)