The year that was: 2011 (Part Three)

Our annual review of the year continues with a look back at the key events that shaped the mail and express industry in the third quarter of the 2011 calendar year… The global economy began to slow down in July and August, though the situation would not become clear until towards the end of the quarter. Plans continued to close letter processing infrastructure, while investing in parcel processing networks, as well as looking to develop the digital side of the business…

July

As new figures reveal the US Postal Service is now losing a billion dollars a month, the USPS reveals plans to close more than 3,600 post offices, replacing some with new “village post office” partner-run facilities.

Other first world postal services are also looking to make network cutbacks, with PostNL cleared by Dutch authorities to close 300 delivery offices, while in the UK Royal Mail continues restructuring, confirming plans to cut 550 jobs in the Midlands. The EU decides to investigate UK government plans to provide state aid to Royal Mail to help its restructuring.

In key growth markets, however, the picture is the reverse – Brazil Post reveals plans to open 830 new post offices, as franchise operations, and invest $2.5bn in modernising its network. And, Russian Post plans to invest $500m in its network to speed up delivery.

The parcel and express segments also see investment plans this month, particularly with an eye to e-commerce opportunities. In the Middle East, Parzel makes a key acquisition ahead of a $200m investment in its automated parcel locker network in the UAE and Arabian Peninsula. FedEx expands its presence in Mexico by buying Multipack. SingPost continues building is Asia Pacific e-commerce presence buying Chinese cross-border specialist Shenzhen 4PX Express.

And DHL Express continues its worldwide repositioning – its withdrawal from domestic operations around the world to focus on international cross-border business. The company reveals it is pulling out of its Chinese joint venture DHL Sinotrans, and also this month reveals plans to invest millions in its UK international division.

August

In August, we reported on some interesting changes at Canada Post as the Corporation looked to continue reinventing itself for the modern postal era, with a significant top-down restructuring of the company into a physical mail and a digital mail division. We also reported on changes to the role of the mail carrier as Canada Post looked to improve efficiency and cut costs.

The UK authorities decided to take bulk mail out of the portfolio of services covered by Royal Mail’s universal service obligation, as part of a reshaping of the postal regulatory arena under an open market and possible future privatisation of Royal Mail.

China revealed a five-year modernisation plan for its postal services, but an explosion in a parcel revealed concerns about security levels in the country’s delivery infrastructure.

We reported on US efforts to boost consumer interest in digital mail, with US residents firmly sticking to the mail for their bills and statements. Over in Europe, Swiss Post was continuing to push the boundaries of hybrid mail, with plans to deliver physical newspapers abroad on the day of printing via digital technology.

While other integrators were reporting relatively good second quarters of the year, TNT revealed a huge slump in profits caused by rising costs, putting it in a difficult situation not long after its demerger from PostNL.

September

Postal reform legislation progressed through Brazil’s Congress, but problems were cause by a partial strike. Strikes were also seen in Egypt, with workers unhappy about pay levels in common with many sectors of the country following January’s revolution.

Russia’s government revealed that it is preparing postal reforms that might see Russian Post floated on the stock market.

In the digital world, Neopost was preparing to launch a hybrid mail service in France, but in the US, Pitney Bowes decided it needed more time to get mailers on board its Volly digital mail service, and delayed its consumer launch into 2012.

UPS launched a new alert service to try to reduce the number of missed deliveries in the US, and also announced a $200m investment plan for its European hub in Germany. Deutsche Post DHL was also investing in Germany, preparing a EUR 750m plan to speed up its German parcel deliveries. FedEx was being hit by a slowing economy, but saw potential for extending economy products in Asia and for chasing growth in Latin America.

And, as Congress debated various proposals to save the US Postal Service, USPS launched a major review, looking to close more than half its mail processing plants.

Stay tuned for the conclusion of our “The Year That Was” annual review, looking at the final three months of the year, tomorrow.

See also:

• The year that was: 2011 (Part One) – Looking back on the major mail and express stories from January through March 2011
• The year that was: 2011 (Part Two) – Charting the big stories from April to June 2011