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Freight business opens up lucrative routes for FedEx

Posted by | Mar 18, 2005 | |

When Greg Farmer backs his FedEx truck into the loading bay of a vehicle parts warehouse in Atlanta, it looks like he is too late. All of that day’s small packages are being loaded on another truck bearing the logo of UPS, FedEx’s arch-rival.

But Mr Farmer is not there to collect small packages. His cargo is three big crates, so heavy they need to be manoeuvred by forklift truck. “When I tell people I drive for FedEx they assume I deliver parcels,” says the 29-year-old driver. “I have to explain that we also handle freight.”

While small packages dominate, road freight is becoming an increasingly important part of FedEx’s business.

Freight revenues increased 19 per cent to USD747m in the third quarter and operating profits were up 46 per cent at USD54m.

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FedEx warns oil prices to hit profits

Posted by | Mar 18, 2005 | |

FedEx increased its third-quarter net earnings by a better than expected 53 per cent but warned that high oil prices would erode profits in the fourth quarter.

Alan Graf, chief financial officer, said this year’s renewed increase in fuel prices was having a “significant impact” on margins.

US light crude yesterday rose above USD57 a barrel for the first time, amid strong global demand and tight supply.

However, Fred Smith, chairman and chief executive of FedEx, said he remained confident about prospects for the company and the world economy. “We have solid momentum in the business and customer demand is strong,” he said. “Economic conditions remain favourable, and we are optimistic about future growth.”

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French La Poste to sell 70 pct of TAT Express

Posted by | Mar 18, 2005 | |

French national post office La Poste announced its plans to sell up to 70 pct of the share capital of its subsidiary, express freight transport company TAT Express, to an unnamed French company, it was reported on March 17, 2005. The French trade unions had been informed for this decision at an extraordinary works’ council dedicated to the opening of the capital of TAT Express on March 10, 2005. TAT Express launched a restructuring plan in December 2003 which led to 200 job cuts and modification of the work contracts of another 200 company employees. TAT Express reduced its agencies in France to 33 and generated a 150 mln euro (USD200.5 mln) turnover for 2004.

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An Post mobile top-up divisions sold for EUR85m

Posted by | Mar 18, 2005 | |

An Post has sold two international subsidiaries, which provide top-up services to mobile phone users, for EUR85 million.

Irish electronic payments group Alphyra bought the companies, which are called PostTS UK and PostTS Spain. It said yesterday’s transaction consolidated its position as the biggest independent payments operator in Europe.

The deal represents a good return for An Post, which said it had invested about EUR16 million in the firms since it bought them from the Caudwell Group in 2002.

An Post said in a statement that the sale of the two international divisions was part of its overall recovery strategy, which may see 2,000 jobs go at the firm.

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Pitney Bowes applauds introduction of postal reform legislation

Posted by | Mar 18, 2005 | |

Pitney Bowes applauded the introduction of new postal reform legislation by Chairman Susan Collins and Senator Tom Carper, the Committee Democrat who has taken the lead on postal reform issues.

“With the introduction of Senate legislation, we move one step closer to delivering real postal reform that ensures our postal system will be the most efficient and effective that it can be,” said Michael J. Critelli, chairman and CEO of Pitney Bowes. “Having the best Postal Service possible will help everyone who mails — individuals and families for personal correspondence, small businesses that send a few letters and packages a month, and large volume commercial mailers. All of them drive the USD900 billion postal service industry.”

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German Hermes to increase number of outlets to 11,000 in 2005

Posted by | Mar 18, 2005 | |

German logistics services provider Hermes Versand, a subsidiary of mail order company Otto GmbH, plans to increase the number of its outlets to 11,000 in 2005 and get closer to the 12,000 of its chief competitor Deutsche Post, Hermes said on March 18, 2005. In 2004, Hermes snapped up 3.0 percentage points of the Deutsche Post share in the market for package deliveries to private clients and plans to have a 10 pct market share by the end of the current fiscal year, two years ahead of schedule, Hanjo Schneider, CEO of Hermes Logistik Group, said. The market, dominated by Deutsche Post and Hermes, has a volume of 60 million packages a year. According to Schneider, Hermes’ prices stand on average 25 pct below those of its larger rival.

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Denmark favours CVC Capital for Post talks

Posted by | Mar 18, 2005 | |

CVC Capital Partners, the UK private equity company, yesterday made clear its intention to play a leading role in a consolidating European postal sector after entering exclusive talks to buy 25 per cent of Denmark’s postal service.
The decision by the Danish ministry of transport and energy to favour CVC dashed the hopes of rival European mail groups. TPG, of the Netherlands, and Germany’s Deutsche Post had both submitted bids for Post Danmark. The Dutch company considered the stake critical as European markets are slowly opened to foreign predators. CVC said it had “substantial capital resources to provide Post Danmark with a strong platform for acquisitions and strategic alliances”, throwing down the gauntlet to mail groups as European governments weigh liberalisation.

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