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UPS arm in talks to buy AFL for Rs 3,000 million

Posted by | May 9, 2008 | |

UPS Jetair Express, domestic arm of the US-based logistics major United Parcel Services (UPS), is in talks to acquire Mumbai-based logistics company Air Freight (AFL).

According to sources, both parties have been engaged in discussions over the last few months and the deal is expected to be valued at around Rs 3,000 million.

In the wake of the above development, AFL Logistics CEO VV Rao has resigned. Sources believe that Mr Rao did not see any future role in the company considering that he was strategically involved in setting up the network of AFL Logistics, which has been successfully concluded.

AFL denied that it is talks with UPS Jetair Express. “As for Mr Rao moving on, it has been his decision and as an organisation to which he has contributed tremendously in propelling it forward, we respect his choice,” said an AFL spokesperson. Mr Rao could not be reached for his comments.

UPS is looking at acquiring both the existing divisions of AFL; the third party logistics (3PL) arm, AFL Logistics and the express courier arm, AFL Wiz. According to sources, the FY 07’ turnover of both the entities is close to Rs 1,500 million and Rs 300 million, respectively, although, both are loss-making companies.

The figures could not be confirmed as AFL is not a public-listed company. UPS, though, denies that it is in talks to acquire AFL. “No, we have a strategic sales alliance with AFL,” said a UPS Jetair Express spokesperson.

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DHL charts Saudi expansion plan

Posted by | May 9, 2008 | |

DHL Express said the company is committed to invest over 100 million Saudi riyals (USD 26.67) for infrastructure developments across Saudi Arabia.

The money will be spent in the rapid expansion of service points, with the opening of more than 15 new branches, before the end of the year.

DHL Express Country Manager for Saudi Arabia, Noor Sulaiman, said that there would be a positive impact on all of DHL’s operations and that the company was responding to the growing numbers and diverse needs of its customers, as well as the growth in the country’s economy.

“We are seeing rapid and healthy growth and it is our commitment to this country to provide our customers with greater access to our services, through the best branch locations, the highest possible standard of customer service, the most efficient world-class logistics infrastructure, additional service points, increased fleet, extended pick up times, reduced transit times, and Time Definite Delivery,” he said.

The new branches will be rolled out in important population centres across the kingdom in the coming eight months with exact locations to be announced in the near future.

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USPS looks to expand package returns service with major carriers (U.S)

Posted by | May 9, 2008 | |

Looking to cooperate more with its competitors, the U.S. Postal Service is hoping to expand its package returns service through major carriers UPS, FedEx Corp. and DHL, says Jim Cochrane, acting vice president of ground packages at the U.S.P.S. But while none of the three big carriers have yet to publicly express an interest in the service, the Postal Services’ sole returns partner for now, Newgistics Inc., plans a major expansion of the service this year, Newgistics CFO Mike Twomey says.

The Postal Service wants to expand the returns service—through which the U.S.P.S. takes packages from a consumer’s home address to a postal facility, where a private carrier picks it up to complete delivery back to a retailer or manufacturer—as part of a broad effort to expand its delivery business in cooperation with carrier companies. Newgistics specializes in serving apparel and consumer electronics retailers, so extending the U.S.P.S. returns service through other carriers could broaden its reach.

UPS, FedEx and DHL all declined to comment on the Postal Service plan. Cochrane, noting the three carriers were all aware of the Postal Service’s interest in working with them, also declined to say if the U.S.P.S. had entered contract negotiations with any of the carriers.

The Postal Service, in an attempt to run its own operations more efficiently, is providing its shipping partners financial incentives to pick up and deliver packages at direct-delivery units, such as local post offices, instead of at regional bulk mail centers. Newgistics will use its shipping management system to look at a matrix of carrier shipping rates and Postal Service incentives to determine whether it’s more cost-effective to ship to a direct-delivery unit or to a bulk mail center.

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FedEx Delivers for Mother's Day

Posted by | May 9, 2008 | |

With Mother’s day just days away, FedEx has ramped up operations to support one of its busiest times of the year. Millions of flowers and gifts will pass through its hubs as FedEx is ready to brighten the day for mothers across the nation and around the world.

FedEx Express expects to see the largest delivery volume of flowers, plants and gifts for moms on Friday, May 9. On May 9, FedEx Express couriers will make 20 times more domestic flower deliveries than on an average day. Hundreds of thousands of flower deliveries have traveled through major FedEx hubs and gateways in Memphis, Miami, Indianapolis and Oakland between Tuesday, May 6 and Friday, May 9 on their way to be delivered in time for Mother’s Day.

FedEx Ground expects to see the largest delivery volumne of flowers, plans and Mother’s Day gifts on Saturday, May 10. FedEx Ground and Home Delivery will deliver more than 150,000 bouquets of flowers on May 10 alone.

For those procrastinators, FedEx will be making deliveries through Saturday, May 10 in time for Mother’s Day. Many e-commerce flower and gift retailers have located warehouses close to the FedEx Express Super Hub in Memphis, TN, allowing them to take last-minute orders up until Friday, May 9 and still have them delivered before Mother’s Day.

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FedEx Corp. Revises earnings guidance

Posted by | May 9, 2008 | |

FedEx Corp. announced that earnings for the fourth quarter ending May 31, 2008 are expected to be in the range of USD 1.45 to USD 1.50 per diluted share, compared to the previous forecast of USD 1.60 to USD 1.80.

“Since we provided earnings guidance for the fourth quarter in March when the crude oil price was slightly above USD 100 per barrel, our estimated fuel costs for the quarter have increased more than 7 percent, or USD 100 million from our previous estimate, and the weak economy has restrained demand for U.S. domestic express package and LTL freight services,” said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer. “While we have dynamic fuel surcharges in place, they cannot keep pace in the short-term with rapidly rising fuel prices. This revised outlook assumes no additional increases to the current fuel price environment and no further weakening of the economy.”

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USPS releases final address standards for commercial flat-sized mail

Posted by | May 9, 2008 | |

The USPS has published its final rule for new address standards for commercial flat-sized mail in the Federal Register.

The new standards, published May 7 and set to go into effect March 29, 2009, will require mailers to adopt new address placement and formatting requirements for periodicals, Standard Mail, bound printed matter, Media Mail and library mail flat-sized pieces sent at automation, presorted or carrier route prices, the USPS said. The standards also include similar revisions for automation and pre-sorted First-Class Mail flats.

According to the new standards, mailers will need to place delivery addresses within the top half of their mailpieces. Mailers will also need to address presorted, carrier route and automation flat-sized mail pieces using a minimum of eight-point type. Or, if the piece has a Postnet or Intelligent Mail barcode on it, a minimum of six-point type in all capital letters will be required.

In the notice, the USPS said it will publish a quick service guide and other additional materials to help mailers prepare for the change.

The new address standards will assist the USPS in its implementation of its new Flats Sequencing System (FSS), which will sort flat-sized mail into delivery sequence, thereby reducing carriers’ time spent manually sorting mail.

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Deals with mass-mailers, labor unions hurt customers

Posted by | May 9, 2008 | |

On Monday [May 12], the price of a first-class stamp will rise by a penny. With gas now costing nearly four bucks a gallon, a 42-cent stamp may not sound like much. But while stamp prices climb, the Postal Service keeps offering sweetheart deals to bulk mailers and the postal labor unions.

Ordinary consumers ought to ask why the Postal Service is delivering for everyone but them.

In the last decade, stamp prices have gone up 31 percent. Following sweeping congressional reforms in 2006, the Postal Service hinted at annual rate increases. With Monday’s increase — the second in as many years — the Postal Service seems to have settled on raising prices each year in mid-May.

At the same time, the Postal Service has taken to offering discounts to big mailers based on how much mail they send. When done right, such agreements can save both the Postal Service and the mailer money. But in several previous agreements, the Postal Service has either granted a discount for mail that would have been sent anyway or granted discounts deemed excessive by regulators.

In 2006, the Postal Service’s regulator issued a decision on an agreement with Bank One. The report wondered whether discounts were necessary in light of expert analysis revealing “tremendous growth in the amount of direct mail solicitation undertaken by the credit card industry.”

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