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FedEx contract loss means Business Post shares struggle

Posted by | Dec 20, 2006 | |

Business Post shares suffered yesterday when US logistics giant FedEx confirmed it was scrapping a major contract with the company, which has a hub in Birmingham.

The move follows FedEx’s pounds 120 million acquisition of ANC Holdings, a major rival to Business Post in the UK.

Business Post’s shares retreated 32 1/4 ViTp to 429 3/4 p in early trading but later recovered some lost ground to close 17 1/4 p down at 444 1/2 p, a loss of 3.7 per cent. FedEx said it intended to terminate Business Post’s contract as “Global Service Participant” in the UK, a contract that accounts for about six per cent of the company’s turnover.

Given the operational gearing of the contract, the impact on earnings is likely to be slightly higher, City analysts believe.

Broker Altium has, however, maintained its earnings estimate for the time being.

But it has cut its long-term target price for the stock from 450p to 425p, while Teather & Greenwood downgraded shares from “buy” to “sell”.

Business Post said in a Stock Exchange statement that it expected the FedEx contract, which only came into effect in September this year, to end in September 2007.

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Direct Mail spending surges 7.5% in 2006, more growth ahead

Posted by | Dec 20, 2006 | |

Despite rising postal rates, higher raw materials costs and the advent of numerous alternative channels, marketers continue to seek out the return on investment benefits of direct mail. spending USD60.6 billion on the channel in 2006 – according to a white paper released today by Winterberry Group, a leading strategic consulting firm serving the marketing industry.

The white paper, entitled Vertical Market Trends in Direct Mail and the Impact on Production Service Providers 2006, is the New York-based consulting firm’s third annual study of the direct mail production sector.
Winterberry Group forecasts continued growth in direct mail through the 2009 timeframe.

The white paper further outlines three macro trends and five vertical market trends which should play significant roles in shaping the direction of direct mail use in 2007. The macro trends include:

– Complex, high-volume multichannel campaigns become the industry standard, driven by enhanced marketing database segmentation tools and widespread CRM adoption

– Forthcoming postal rate increase, combined with new delivery point validation
regulations, drive the need for advanced data hygiene and postal optimization services

– Strategy and creative service providers move to integrate analytics and consumer
targeting services with their existing portfolios, in order to counteract the threat of service commoditization in the agency space.

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President Bush Signs New Postal Law

Posted by | Dec 20, 2006 | |

President George W. Bush today signed into law new postal legislation that will benefit both residential and business customers by ensuring predictable price increases tied to the rate of inflation.

The Postal Accountability and Enhancement Act is the first major change to the Postal Service since 1971. The law enables the organization to continue its transformation efforts and cost-cutting measures.

This is the culmination of a 12-year effort by Congress to secure changes to the laws governing the Postal Service. It will link future rate increases to the Consumer Price Index and give the Postal Service more flexibility for pricing competitive products. The Act also reconstitutes the existing Postal Rate Commission into a regulatory body with greater authority and responsibility. The current rate case under consideration will proceed as scheduled. The Postal Service will be able to file one last rate case under the current rules.

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Panel to attract private companies in air cargo

Posted by | Dec 20, 2006 | |

In order to attract private investments in air cargo operations from Reliance, Tatas and Deccan Aviation, the government has set up an inter-ministerial group (IMG).
“The group will identify requirements of different sectors – ranging from those trading in perishable goods to consumer durables – and make suggestions to expedite and improve cargo trade at domestic airports,” an official in the government said.
The civil aviation ministry, which is formulating a new policy to develop domestic airports for international cargo handling, will include suggestions of various ministries in that policy.
The move is significant since a host of private companies such as Reliance and Deccan Aviation as well as Tata group have recently shown interest in starting dedicated air cargo carriers, he said. The group comprises of officials from civil aviation, finance and commerce ministries. Representatives from the cargo industry such as DHL Express and Blue Dart are also part of the IMG.

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RFID at China Post

Posted by | Dec 20, 2006 | |

Symbol Technologies has been involved in several major postal RFID programs around the world. At China Post, they have implemented UHF readers in 20 post offices in Shanghai. China Post, which ships 10 billion articles a year, wanted to trial RFID to:
Validate the use of UHF
Improve shipment tracking
Increase processing efficiency

It wanted to achieve a 99% read accuracy through this demonstrator project. Gen2 UHF tags are embedded in a robust plastic case but the EPC numbering system is not used – China Post use their own numbering system. Truck drivers were given handheld readers with fixed readers at the distribution/sorting centers. Concord Unity, the systems integrator, has reported so far a 99.4% performance rate when reading and encoding tags. The tags are attached to mail bags and are used to track letters sent by the express mail service. The system has resulted in several major paybacks so far – demonstrating that 33% more post could be processed in the same time as before; and ensuring delivery bags were sent to the correct location reducing errors and delays.

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Where is Asia’s Express Market going?

Posted by | Dec 19, 2006 | |

There’s only one way to go and that is UP. In 2007 we will see more new players entering the market as Asia’s economies continue to grow. Courier industry is characterized by high entry barriers. It needs huge investment in infrastructure and technology and there is intense competition in the industry. The market for courier industry can be divided into individual, corporate and small and medium enterprises. On the basis of type of delivery, it can also be divided into overnight delivery and same day delivery services.

Courier companies are using information technology to enhance the quality of their customer service and obtain competitive edge. There are only a few global courier companies like Fed Ex, DHL, UPS and TNT and there is intense competition among them with each one trying to establish its superiority. In India, presently, DHL, Blue Dart and Elbee are the major players contributing to 70% of industry’s revenues. An interesting observation in the past three years , is that the big Four are now entering the domestic market, an area that they have been relatively weak in. This could also result to a backlash on their main core international businesss. Asia’s domestic courier market has always been the strength of the home-grown operators with intimate familiarity of the terrain.

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FedEx seeks improved software testing

Posted by | Dec 19, 2006 | |

Believing current software testing approaches are antiquated, FedEx is working with the University of Memphis to take testing to its next steps.

The package delivery company has commissioned the university to research a number of topics pertaining to the matter, through the FedEx Institute of Technology program at the school. The testing project, called the Systems Testing Excellence Program (STEP) could result in the largest testing organization in the country.

Specifically, FedEx seeks methodologies to make testing processes shorter while ensuring that applications are high-quality. Current testing practices are basically the same as they were in the 1980s, said Dave Miller, vice president of information technology at FedEx. Code is written and then turned over to unit testing; testers look for defects and send that detail back to the development team, Miller said. Determinations are made on whether an issue actually is a defect or requirements shortcoming.

“We sort of believe that testing as a discipline has probably not kept up pace,” with other areas of IT, Miller said.

FedEx’s focus is on testing of large, complex, integrated software systems, on both mainframe and distributed systems.

“We want to make sure we’re in the forefront of the testing space,” Miller said.

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