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FedEx CEO: Economy will come back

Posted by | Oct 6, 2008 | |

FedEx CEO Fred Smith says the economy is stronger than most people realize, and that mountains of cash is “on the sidelines” in emerging markets, waiting to be invested.

Asked in an interview what it would take to turn around the U.S. economy as the credit crisis unfolds, Smith, who founded the global freight carrier, said things in the real economy are not that bad.

“The industrial economy is a lot stronger and more resilient than I think people give it credit for,” Smith told Fortune.

“And there’s an enormous amount of money in China, in the Middle East, and elsewhere that has to be invested. It can’t just be placid on the sidelines. So after a period of trauma and readjustment, my guess is that the economy will come around.”

“They’re showing pretty clearly that the economies of the industrialized world are slow, and that the emerging economies, like China and India and the intra-Asia trade, all continue to grow at pretty good levels but at substantially lower growth rates than was the case a few months or years ago.”

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FedEx Express opens new station to process shipments within Mexico

Posted by | Oct 6, 2008 | |

FedEx Express announced the start of operations for FedEx Express Nacional, a domestic overnight service in Mexico, and the opening of the Toluca Hub Multiplex, its new center of operations for domestic shipments.
The service covers all 32 Mexican states with the support of two new centers of operations in Toluca (Multiplex) and San Luis Potosi, the latter to open in early 2009.
The express shipping market in Mexico is valued at USD 822 million and is projected to grow to USD 1.5 billion in the next 10 years, according to the Mexican Civil Parcel and Shipping Association.
FedEx begins domestic express operations today from the Toluca Hub Multiplex. The new facility has the capacity to process 6,000 shipments per hour with 48 new employees. FedEx expects the sorting capacity and the number of employees to increase during the next few years.
Toluca Hub Multiplex is the FedEx Express domestic service distribution center in Mexico’s Federal District metropolitan area and measures 3,780 square meters. It is located close to the two largest industrial parks in Toluca.

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Qatar post pilots Motorola's RFID solution to measure the quality of postal services

Posted by | Oct 6, 2008 | |

RFID technology was evaluated by Qatar Post as part of a wider initiative to measure the quality of postal services throughout the Middle East. Motorola radio frequency identification (RFID) readers and other technology suppliers, were part of the trial in a joint project with Emirates Post and Saudi Post.

Qatar Post, which is member of UPU Quality of Service Project Group Steering Committee, recently concluded a successful trial in the Arab region (22 Countries) during which it deployed and tested both passive and semi-active RFID systems. The project was initiated to evaluate various RFID technologies as a way to measure the postal quality across the three countries. This unique trial could pave the way for the use of cost-effective RFID technologies to track mail around the world.

Motorola XR480 fixed RFID readers were installed along with other antennas in mail processing centers across Qatar, United Arab Emirates, and Saudi Arabia to track anonymous test envelopes containing RFID tags. This created a simulated environment of how mail moves through the postal system and help authorities better understand the time and route that mail takes on its journey from collection to delivery.

This trial will allow and help Qatar Post to make both short-term and long-term decisions about its future business. On a day-to-day basis, Qatar Post will be able to identify delays in the delivery process and make adjustments accordingly. On a long-term basis, it can evaluate the average route of a letter and assess whether it is following the most efficient course, altering routing accordingly. It also allows Qatar Post to see where any potential errors in its delivery processes might occur, so that these can be corrected before they impact customers or incur extra charges.

This unique trial also could ultimately lead to the adoption of RFID by postal companies around the world, providing them with a measurement matrix for international deliveries as post moves from one national carrier to another. This trial will not only be important for the Arab region but will help the remaining countries` members to prove the success of RFID as a method to monitor post, reduce costs and provide better services for customers.

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Canada Post Chosen As One Of Canada’s Top 100 Employers

Posted by | Oct 6, 2008 | |

Canada Post has again been chosen as one of Canada’s Top 100 employers by Mediacorp, which selected the 100 out of 16,000 companies invited to participate. This was after Mediacorp reviewed recruitment histories for nearly 75,000 Canadian firms before deciding whom to invite.
“On behalf of our 72,000 employees, I’m very proud that Canada Post has been recognized as a top 100 employers for the third year in a row,” said Moya Greene, President and CEO. “Being among the Top 100 helps us compete with the best corporations in Canada and likely the world.”
To be included in the Top 100, companies have to show their quality in terms of physical workplace; work and social atmosphere; health, financial and family benefits; vacation and time off; employee communications; performance management; training and skills development; and community involvement.

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DHL 'Mistakes' Make USD 3B Loss Unsustainable

Posted by | Oct 5, 2008 | |

Addressing the U.S. House of Representatives Committee on the Judiciary, DHL CEO John Mullen cited constraints on foreign investment in U.S. airlines as a reason for the express operator’s USD 3 billion losses since 2003.

Currently, U.S. law limits foreign ownership of American air carriers to a 49 pct equity interest and a 25 pct voting interest and with DHL losing USD 5 million a day Mullen said the situation had become “unsustainable.”

In an attempt to integrate the unusual structure of DHL – U.S. ownership of the domestic lift and foreign control of the international operations – Deutsche Post World Net (DPWN) acquired DHL International in 2002 and Airborne Express in 2003.

In order to comply with U.S. law, DHL was then required to divest itself of Airborne’s air operations (ABX), leaving DHL Express to operate ground operations only in the U.S.

So while it may have been one brand, the new DHL has remained several distinct components – including air capacity provided by ABX and ASTAR. Mullen acknowledges that the inability to control its U.S. capacity has resulted in a “substantial cost disadvantage” compared to FedEx and UPS.

In the five years since acquiring Airborne, DHL has invested USD 0.9 billion in its Wilmington, Ohio hub in order to integrate the ground operations of the former DHL and Airborne into a single air express provider.

So when UPS came calling with a more cost-effective solution to DHL’s domestic lift, Mullen and DPWN CEO Frank Appel decided to call “time” on the Wilmington hub operation and its capacity contracts with ABX and ASTAR.

However Mullen denied as “false” claims that DHL is abandoning its Wilmington Air Park facility after accepting more than USD 400 million in incentive benefits from the State of Ohio: “DHL was induced to consolidate operations at the Air Park, rather than in Northern Kentucky, in part by the offer of incentives that the State has valued in excess of $400 million.

DHL says it will provide more than USD 260 million in severance, retention, and health benefits for the workforce in Wilmington, including funding the severance and benefits programs of the ABX and ASTAR Employees.

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3,000 more post offices could close if Royal Mail loses pensions contract (UK)

Posted by | Oct 4, 2008 | |

Three thousand more post offices could close if the Government does not award a major benefits contract to the Royal Mail in the next few weeks.

The latest uncertainty to the post office network hinges on whether the Department for Work and Pensions extends the Post Office Card Account (POCA) after 2010.

The card account is a lifeline for many branches as it pays out benefits and pensions to four million people and cannot be used in other banks or shops.

Pressure is already building on ministers with over 170 MPs signing a Commons motion urging the Government to keep the contract with the Post Office.

Ministers are insisting that any decision is taken on commercial grounds. PayPoint, the UK’s biggest payment network, with 20,000 outlets in shops across the country, is believed to be the favourite to replace the Post Office in supplying the pension and benefit service.

But they are very worried about the fall-out from taking away the contract from the Post Office.

The Department for Work and Pensions said the contract would be awarded in “early Autumn” but declined to comment further.

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Parcel shipping: Domestic problems persist for DHL Express USA

Posted by | Oct 3, 2008 | |

DHL Express USA has terminated roughly 80-to-90 percent—or hundreds—of its domestic sales force staffers, LM has learned.

According to an industry source, DHL Express USA will retain somewhere between 80-to-150 U.S.-based sales staff that will now be referred to as “international” sales representatives.

The UPS-DHL contract was originally expected to be finalized by August; industry analysts are suggesting it may take at least another two months.

While market conditions remain challenging for DHL Express USA, the industry source said it is by no means certain that it will exit domestic ground operations.

But a research report by Robert W. Baird transportation analyst Jon A. Langenfeld said that, according to industry contacts, deteriorating conditions could force DHL to more drastically eliminate its U.S. domestic parcel operations.

And Morgan Stanley analyst William Greene wrote in a research note that due to anecdotal reports of extremely large volume declines at DHL it is becoming more difficult to see how DHL can deliver USD 1 billion in annual air revenue to UPS should the deal go through.

Greene wrote that prospects of this deal being consummated are becoming doubtful, adding that DHL’s customers appear to be leaving at a rapid pace, coupled with the fact that the House anti-trust and competitive issue-related hearings could also spike the deal.

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Kenya Post plans automation to boost financial services

Posted by | Oct 3, 2008 | |

Postal Corporation of Kenya is automating its branches to inject efficiency into its operations as it looks to grow its financial services division.

The corporation plans to automate its back office operations in 340 post offices out of a branch network of 700 branches countrywide.

Financial services, account for 19 per cent of the total turnover – which came to about 3.2 billion last year – and it is expected to play a huge part in the revenues of the corporation in the coming years, Postmaster General, Fred Odhiambo said.

Financial services firm, Old Mutual, became the latest to partner with Posta to allow its customers to pay for monthly contribution into the pool of invested funds, Unit trusts, through Postapay service.

Old Mutual is eyeing to take the partnership a notch higher by selling its insurance products at the post office starting early next year according to Tavazia Madzinga, deputy group chief executive officer at Old Mutual.

However, this will have to be under the tight scrutiny of the Insurance Regulatory Authority for products which require end users — customers in this case — to be made fully aware, necessitating the need for an insurance agent at the point of sale.

The penetration of insurance products still remain relatively low and is estimated at a paltry three per cent of the Kenyan population.

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