The year that was: 2011 (Part Four)

Our annual review of the year concludes with a look back at the key events that shaped the mail and express industry in the fourth quarter of the 2011 calendar year… In the final three months of 2011, the sudden slowdown in the global economy does nothing to dent parcel volumes in the run-up to Christmas as consumers flock to the internet to do their festive shopping.

October

The IATA reveals figures showing that global freight volumes are shifting from air to ground, particularly in major markets like North America, Europe and Asia. The gloom does not look like it will improve “any time soon”. TNT Express is one of the integrators hit particularly badly by the sudden downturn for express products in Asia, issuing a profit warning this month. FedEx continues expanding its capacity in North America and Europe, particularly on the ground side.

With prime opportunities still in e-commerce, a brand new low-cost start-up launches in the US, seeking to take on UPS and FedEx in shipping online purchases for less.

The UK gains a new postal industry regulator – Ofgem – which unveils proposals for the “biggest ever” shake-up of the UK mail market, including plans to allow Royal Mail to set its own postal rates. UK parcel delivery company Yodel confirms that it is to close 45 depots as it integrates the acquired assets of DHL’s domestic UK business.

Bad news for the US Postal Service as the GAO steps in line behind the White House in denying USPS access to its $75bn civil service pension fund surplus. Controlling Republicans in the US House of Representatives push forward with controversial cost-cutting legislation, but a complete inability to work with Democrats means little optimism for success.

Brazil’s top labour court brings the country’s partial postal strike to an end, after almost a month. Deutsche Post agrees a labour deal with the Ver.di union including an interesting way to cut costs through a “partial retirement” system. PostNL is cutting costs by reducing the size of its workforce, but it forms a special Jobs Company to help those out of a job to get back into employment.

This year’s All-Russian Conference of Postal Workers sees 1,500 Russian Post staff members discussing the company’s plans to modernise. Also this month, Canada Post’s top executives defend their modernisation plans in a public meeting.

And, La Poste makes a big move to improve its carbon footprint, ordering 10,000 electric vehicles from Renault.

November

November, and with Christmas looming large, the industry’s minds turn to parcels. We reported on Hermes UK‘s growth in a difficult UK economy, largely thanks to e-commerce. We highlighted the growing necessity for parcel delivery firms to engage with consumers through smartphones.

The German parcel market saw a particularly intense jostling for market share ahead of the Christmas surge, with Hermes Germany launching a new loyalty programme, and also a low-cost delivery service specifically geared to small packages, which draws industry criticism for lowering the bar in an industry already struggling with low margins. GLS Germany launches a new “green” package service. DHL Parcel cuts its prices to win market share ahead of Christmas, but DPD Germany says it will have to raise its prices to cope with its rising costs.

Companies preparing for a record Christmas surge in parcel volumes include Royal Mail, which invests to set up a separate parcel network, and lays on 5,000 extra vehicles. UPS, which is taking on 55,000 temporary workers for the festive period, predicts that the peak day will come late in December, as more people use the internet for last-minute shopping.

Elsewhere, Canada Post loses a 28-year court battle that will see it paying out around $150m in compensation.

The US Postal Service records a $5.6bn loss for the 2011 year, half the expected loss thanks to a little accounting trickery,  while the US Senate marks up its proposals for a USPS rescue. But USPS says neither the Senate bill nor a rival bill in the US House of Representatives will be enough to save it.

December

As the year draws to a close, the US Postal Service files with regulators to slow down its First Class Mail service in order to significantly reduce the size of its processing network. But just ahead of Christmas, the US Postmaster General bows to pressure from Congress to delay any mail plant or post office closures until May 2012.

FedEx has its Christmas somewhat spoiled by a YouTube video that goes viral, airing an “unacceptable” package delivery to millions of viewers in the US and around the world.

In the UK, parcel delivery firms have avoided the major disruption a year ago, but early suggestions are that some have been caught out by the prolonged onslaught of last-minute internet purchases. Royal Mail is hit by multiple IT problems at the worst possible time of the year, the Christmas run-up.

Elsewhere, Croatian Post makes an interesting acquisition paving the way towards a new hybrid mail service. Bidding opens for 818 post office franchises in Brazil. The Dutch government says it will abolish Monday deliveries to help PostNL finances.

And, La Poste and Swiss Post announce plans to combine their international mail operations.


That’s it for our annual review of 2011. From the entire team at Post&Parcel, we hope you have a good New Year and a very successful 2012.

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