The week that was: 17 August, 2012
Summing up the biggest stories of the week in the mail and express industry, as reported by Post&Parcel. This week, FedEx looks to streamline its workforce, GLS launches a Chinese alliance, and the EU pauses its UPS-TNT merger probe…
FedEx Corporation said it is looking to downsize its workforce within the United States, offering buyouts for workers in its FedEx Express and FedEx Services divisions.
The company said the “vast majority” of staff reductions would occur among administrative, non-operational staff from FedEx Express, which has been seeing business shift from more premium air services towards FedEx Ground, particularly with the rise of ecommerce in the US. And, staff will also have incentives to leave in the FedEx Services division, which includes functions like IT, marketing and sales.
Chairman Frederick W Smith insisted his company’s long-term strategy was working, but in a letter to shareholders he stressed the need for his company to “run a lean and flexible organisation” to cope with the current challenges in the global economy.
Royal Mail said its European parcels business, GLS, is partnering with Chinese express delivery company ZJS Express to launch a new China-to-Europe business-to-business parcel delivery service.
The new service, branded as Euro Business Parcel in China, will be positioned as a “value-for-money” alternative to current premium international B2B express delivery options. In particular, it will mean a lower cost service suitable for shipments that may be less time-sensitive than those requiring rapid transport at premium prices.
Currently, the company said much of the China B2B parcel export market is largely made up of premium express companies offering delivery within two-to-three days. Royal Mail said the GLS Euro Business Parcel service will offer transit times of between three and five working days. The company is also promising full end-to-end tracking for shipments and “world-class” customer service.
The volume of UK parcels sent by consumers to alternative collection points looks set to double over the next five years, said parcel shipping management specialists GFS.
The prediction came as Royal Mail revealed it is preparing to start rolling out its Delivery to a Neighbour service next month, allowing customers to have parcel delivered to a trusted neighbour when not at home to receive them.
And, it was revealed that Amazon is now working with parcel collection network CollectPlus to allow its ecommerce customers to have their purchases sent to a local convenience store when they are not at home.
UPS and TNT said they were still expecting their merger to go ahead in the fourth quarter of 2012, despite this week’s “pause” in the EU Commission’s competition investigation.
EU officials said more time was needed to get hold of certain information about the EUR 5bn proposed merger between the two companies. The investigation had previously been expected to take until 12th December, that deadline having already been extended from an original 28th November deadline.
UPS said the suspension of the investigation was merely a normal part of the EU Commission information gathering process.
Significant price rises are on the way for parcels being shipped by the Postal Service out of the United States, if regulators allow USPS to move its international First Class package service to the competitive side of its portfolio.
The Postal Regulatory Commission said this week it is now reviewing a request from USPS to transfer its First Class International Packages and Rolls service out of the current regulated market-dominant portfolio.
The Postal Service said the international parcels product is already effectively a competitive service, competing in a “vibrant” marketplace against the likes of FedEx, DHL and UPS, and should therefore be treated by regulators as a competitive service.