The week that was: 20 July 2012

Summing up the biggest stories of the week on Post&Parcel, with Royal Mail’s price cap extended, DHL opening a MegaHub in Hong Kong and FedEx facing a billion-dollar bidding war for a postal contract…

MPs warn restructuring could “erode the ethos” of Post Office Ltd

Members of Britain’s House of Commons expressed “serious concerns” over current plans to modernise the Post Office Ltd network.

The House of Commons Business, Innovation and Skills Committee said the ongoing effort to transform 6,000 of the UK’s 11,800 post offices into 4,000 “Main” and 2,000 “Local” branches was too inflexible to the needs of communities, and that the model was based on “narrowly focussed” research.

The Committee did support the overall direction of the government’s plans to restructure the Post Office Ltd network to wean it off state subsidy. However, it said there were problems in the details of the plan, which will see around GBP 200m invested in redesigning the 6,000 branches.

DHL Supply Chain opens MegaHub in Hong Kong

DHL Supply Chain has opened its new EUR 63m state-of-the-art “MegaHub” facility in Hong Kong, which will serve as the company’s new Hong Kong headquarters.

The facility in Tsing Yi brings together the company’s Hong Kong operations and expands its infrastructure in nearly 900,000 square feet of warehouse space.

The new MegaHub is located close to Hong Kong international airport, the city’s business district and container terminals, and major highways connecting to mainland China.

USPS mulling transport options as FedEx warns of bidding war

FedEx Express could lose its biggest single contract next year as the US Postal Service mounts a bidding war for its air transportation services for First Class, Priority and Express Mail.

The integrator told investors this week that one of its key risks going forward was losing the USPS deal when the current agreement runs out in September 2013.

The Postal Service is FedEx Express’s largest single customer, using the Memphis-based company’s air network since 2001 for its overnight and express services. Last year saw FedEx earning very nearly $1.5bn from the Postal Service.

Nightline launches parcel terminal network for Ireland

Irish parcel carrier Nightline has launched the first phase of its new network of self-service parcel terminals to transform the last mile of ecommerce in the Republic.

The company has invested EUR 5m in its plans, which will see 400 of the “Parcel Motels” rolled out across the island by the end of 2014.

The first phase has seen 20 Parcel Motels installed in the Dublin area so far, which will grow to 100 around the Irish capital by the close of this year.

Royal Mail price caps confirmed for large letters, small parcels

The UK postal regulator Ofcom confirmed its decision to extend Royal Mail’s remaining price cap on Second Class letters to include Second Class large letters and small parcels.

The move followed the deregulation of most of Royal Mail’s prices back in April, when Ofcom decided the universal service provider was in a better position to control its own postal rates, since customers now have the option of alternative communication channels like the Internet.

Today Ofcom issued its final decision setting the cap for Second class large letters and small parcels, up to 2kg in weight, at a rate 53% above the 2011-12 rate.

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