Author: Archive

Integrator share prices slump as oil prices soar

Posted by | Jul 8, 2008 | |

Stock prices of top express companies including DHL parent Deutsche Post World Net, TNT, UPS and FedEx have fallen dramatically over the last six months, primarily due to rising oil prices and worsening economic conditions.

DPWN has experienced the most dramatic fall. Its June 30 share price of EUR 16.60 represented a 17.5 pct fall on the previous month and a 28.5pct slump compared to January 2, 2008.

TNT shares also fell sharply by 14.5pct to EUR 21.72 as of June 30 compared to one month earlier, and ended the first half of 2008 with an overall decrease of 22.2pct. Despite the completion of a EUR 500 million share buyback programme, its stock price was negatively impacted by the weaker economic environment, rising oil prices and a Q1 profit drop of 17.7pct.

UPS suffered a share price drop of 14.1pct to USD 61.47 as of June 30 compared to the previous month. The six-month drop in the share price was slightly lower at 12.5pct. In Q1, the slowing US economy and unprecedented increase in the cost of fuel along with additional charges for aircraft retirement and redundancies caused lower-than-expected US package volume and an accelerating contraction in the use of premium air products which resulted in a double-digit drop in profit.

FedEx is also suffering from the triple impact of soaring fuel prices, the weak US economy and financial charges causing its shares to fall by 14.5pct to USD 78.79 as of June 30 compared to May 30. It had the lowest half-year share price fall of the “Big Four” with 8.55pct.

Trying to compensate for higher fuel costs, the four integrators increased their air fuel surcharges dramatically to the 20pct – 30pct range last month as soaring oil prices drove up operating costs.

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Ex Royal Mail marketer Batchelor set for TomTom position (UK)

Posted by | Jul 8, 2008 | |

Former Royal Mail Marketing Director Alex Batchelor is to resurface at sat-nav brand TomTom later this year as Chief Marketing Officer.

Batchelor’s departure from Royal Mail in June followed a board-level restructure that led to Group Strategy Director Alex Smith taking on overall marketing responsibility as Strategy and Commercial Director. Batchelor is to take up the role at TomTom in September.

Prior to leaving Royal Mail, Batchelor is understood to have been a keen advocate of a partnership deal with London 2012, a tie that could yet materialise. One of his final decisions was to retain Abbott Mead Vickers BBDO and Proximity London on its ad and direct accounts respectively.

In the UK, TomTom uses the strapline ‘Find your way the easy way’.

The Dutch brand has sold 20m products over the past four years, although shares dipped last month following rumours of declining UK sales.

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Regulator forces Deutsche Post to improve competitors' access to mail hubs

Posted by | Jul 7, 2008 | |

The German grid regulator Bundesnetzagentur said it has forced Deutsche Post World Net AG. to improve competitors’ access to its letter-sorting facilities, mainly by extending their opening hours.
German postal regulation allows Deutsche Post’s competitors to use the former monopolist’s mail distribution infrastructure for services they offer only partially themselves.
This includes the collection and pre-sorting of mail that is than being processed by Deutsche Post.
A spokesman for the German mail services and logistics company said new regulations are an acceptable compromise.

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Postal chief sees freight returning to rail and sea (Australia)

Posted by | Jul 7, 2008 | |

The international freight industry will face increasing pressure to cut back on flights and revert to sea and rail deliveries because of environmental concerns, the head of Australia Post predicts.
Australia Post’s managing director, Graeme John, who will be chairman of an annual meeting this week in Queensland of nine of the world’s biggest postal groups, said the problem of global warming would have an increasing influence on the way the global postal industry is run.
Mr John said growth in international freight from consumer goods such as electronics had been managed on a “just in time” basis, with air travel preferred to other forms of transport because of its speed advantage. But that approach was no longer viable.
The postal groups meeting this week – Australia, the United States, Hong Kong, Japan, South Korea, Spain, France and Britain – are members of the Kahala Post Group, a consortium created five years ago to help them compete with private freight companies.
Mr John instigated the consortium because he “wanted to do something about the dominance of the DHLs and the FedExs and UPSs in the international parcel network”, as did other former monopoly postal groups.
The Kahala group – named after a resort the members stayed at during their founding meeting in Hawaii – conceded they could not compete with the private companies on speed, so instead focused on reliability of delivery.
But to guarantee that reliability the Kahala members had to upgrade their tracking systems.
It also required the creation of a “delivery calculator” – a database of eight billion postcodes that allows a customer to walk into any postal outlet, list their destination and be told a precise window during which a parcel would be delivered.
While the private couriers already offered that certainty, and faster delivery, the Kahala members undercut their prices by 40 per cent to 50 per cent.
As well as pressure to shift towards less environmentally-damaging modes of transport, Mr John said a worsening economic environment could prompt a trend to slower “deferred” delivery services.
The Kahala partnership is also moving beyond postage, with Australia Post, China Post and the US Postal Service preparing to launch a group-owned money transfer service to compete against Western Union.

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France declines comment on La Poste IPO target

Posted by | Jul 7, 2008 | |

The French government declined on Monday 7th July to comment on a report that a possible partial privatisation of La Poste could raise 2 to 3 billion euros (USD 4.7 billion) to help prepare one of the bastions of state ownership for competition.
French President Nicolas Sarkozy’s Chief of Staff lifted a taboo on changing the ownership of the postal service, one of the country’s biggest employers with 280,000 staff, on Sunday by saying the idea of a stock market listing “deserves interest”.
The move would form part of France’s efforts to prepare itself for the liberalisation of the European postal market by 2011.
“We have no comment because La Poste has not put forward a proposal yet,” a finance ministry spokesman said.
“A flotation is one of the options being studied,” a spokeswoman for La Poste said, but said a proposal had not been made formal.
The tentative flotation plan, first reported in Le Monde last week, has angered unions already involved in sporadic strikes to defend pension rights and the 35-hour working week.
The Sud-PTT postal union said it would be “the end of the public postal service” and that a similar step taken by France Telecom had merely saddled it with massive debts.
French daily Echos said on Monday that La Poste, which generated sales of 20.8 billion euros in 2007, was looking to sell 20 percent of its share capital in a possible flotation that would value it at more than 10 billion euros.
Sarkozy’s Chief of Staff Claude Gueant warned on French radio on Sunday of the consequences of failing to respond.
“If we do nothing, very clearly it will be the German post or the Dutch post that will distribute mail in France,” he said.
France’s post office derives 56 percent of its revenues from mail services and 23 percent from its low-fee banking subsidiary La Banque Postale.
Any move towards privatisation would require changing the legal status of the French postal service, a delicate political operation that would involve turning it into a public limited company or “societe anonyme” instead of a civil service branch.
The government says any changes would not threaten La Poste’s public service status.

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Emirates Post canvases support for amended terminal dues system at Pan African Postal Union meeting

Posted by | Jul 7, 2008 | |

Emirates Post made a strong case for amendments to Universal Postal Union’s new Terminal Dues system (that fixes the postal charges to be paid by individual countries for international mail) at the recent meeting of the Pan African Postal Union (PAPU) in Cairo.
Acting on behalf of Arab postal corporations, Emirates Post highlighted the unfair clauses in the system and introduced the delegates to the amendments suggested by Emirates Post and other like-minded postal bodies.
The new terminal dues system is to be put to vote at the UPU (Universal Postal Union) Congress in Geneva later this month.
The 43 countries of PAPU can make a difference by casting their vote in favour of the amendments.
Mr. Nasser Qadoumi, Postal Operations Consultant, Emirates Post, urged PAPU members to remain united on the issue, and support the move for a more equitable terminal dues system that will benefit developing countries and also take into consideration the plight of under-developed countries.
Commenting on Emirates Post’s stand on the terminal dues issue, Mr. Ibrahim Bin Karam, CEO of Emirates Post, said: ‘As the Arab countries have appointed Emirates Post to campaign for an amended terminal dues system, we are doing our utmost to seek support from all quarters, especially the powerful PAPU. In this meeting, we succeeded in convincing the African countries on the need to have a fair terminal dues system.’
Emirates Post was invited by PAPU to make a presentation on the terminal dues system at the 7th ordinary session of PAPU plenipotentiary conference.

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Royal Mail and La Poste Privatisation Plans

Posted by | Jul 7, 2008 | |

Both the UK and France are looking at the possibility of part-privatisation of their state-owned postal services although postal unions and some MPs are likely to resist any attempts to privatise, in part or in whole.

In the UK, there is growing concern that the funding of the universal service is being undermined by what some see as an over-zealous drive to introduce competition into the market. The CWU (communication workers union), which repesents the majority of postal workers at Royal Mail, has already hinted at the possible withdrawal of it’s contribution to Labour Party funds if the present government continues to back what it describes as a ‘slash and burn’ policy on postal reform. The union’s present view is that Royal Mail is being run down as an excuse to privatise it.

The European Commission has taken a rather ‘loose’ approach to deciding how the USO could be maintained in a deregulated European postal market by saying that it was up to individual countries to decide how it should be funded. Some argue that in a somewhat grand plan to liberalise postal services quickly, it has effectively ‘passed the buck’ on the USO. Last year saw demonstrations in Berlin from unions concerned about the USO and the impact on jobs.

Neither the UK or France has made any firm committment to privatisation yet, but the idea is likely to find favour with both governments as a way to ease problems in a more competitive market. Directors at France’s La Poste, are said to be keen on the idea of an IPO that would involve 20 percent of the company’s total capital, said to be worth around 10 billion euros.

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Royal Mail: too slow to adapt to a changing business worldChristine Buckley, Industrial Editor

Posted by | Jul 7, 2008 | |

By the end of the year there will be just over 11,500 post offices left in Britain. Twenty years ago there were nearly double that amount at 21,100.

Too many people, particularly those left without a local post office, the decline of the network is the most visible evidence of more sweeping changes that have been hitting Royal Mail.

The public has not taken the axing of one in two post offices over 20 years without a fight. The latest round of 2,500 closures, which is nearing its completion, has triggered a storm of protests, both from spontaneous local community campaigns and from local Conservative Party petitions.

It began a regional roll out in January and will finish the last set of consultations at the end of next month in Herefordshire, the West Midlands and Worcestershire.

The network of small post offices, as opposed to the 500-plus larger, high-street offices, are franchised businesses mainly run by individuals or families. But their costs have proved difficult for Royal Mail because of changes in the workload at the offices.

Business dropped dramatically several years ago when the Government began to phase out the payment of benefits in cash at post offices. It switched to direct payment in to recipients’ bank accounts or via the Post Office card account, a no-frills bank account. The contract for the card account was given to Royal Mail but it is about to be renewed after going to tender. Sub postmasters fear the decimation of the highly shrunken network if the contract is not awarded again to Royal Mail and instead goes to a rival bidder, such as Paypoint.

Critics of Royal Mail’s handling of the closure programmes say that it is not just the loss of benefits business that led to the erosion of the network but an unimaginative range of services and tardiness in adapting to the changing world of communications.

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