Author: Archive

Post Office compensation claim could cost millions

Posted by | Feb 6, 2008 | |

Royal Mail could be forced to pay several million pounds in compensation amid accusations that it flouted employment law in its restructuring of the Post Office network.

The organisation’s Post Office division is being taken to an employment tribunal by the Communication Workers Union (CWU), on behalf of 1,300 employees who worked for Crown Post Offices that were franchised to WHSmith and other organisations.

The CWU says that the workers were told that they could take redundancy or be redeployed to other Post Offices, but not that they were entitled under law to transfer to the new owners of the offices under the same terms and conditions as they enjoyed at the Post Office. Crown offices are the larger high street branches that are directly managed by Royal Mail, as opposed to the small branches that are run as individual businesses. The union’s claim will be heard at a tribunal in London in May. The CWU is asking for 13 weeks’ payment for the workers, averaging GBP 5,000 each.

The claim for compensation on behalf of the workers, which could total GBP 6.5 million, emerged as MPs on the Commons Business and Enterprise Committee held an inquiry into the closure of up to 2,500 Post Offices. Peter Luff, chair of the committee, asked Alan Cook, the Post Office’s managing director, to provide evidence of the communication to the employees. He said: “We would like further details on this, because I can’t see how this complies with the law.”

The issue flared as the Court of Appeal upheld a GBP 9.62 million fine on Royal Mail imposed by Postcomm for failing to protect mail that went astray. The problem was highlighted in a Channel 4 television investigation.

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Deutsche Postbank shares soar

Posted by | Feb 6, 2008 | |

Shares of Germany’s largest retail bank Deutsche Postbank AG rose by as much as 11pct in early trade Wednesday, following a report by Financial Times Deutschland daily on a possible merger of the bank.

Deutsche Postbank shares traded off earlier highs, up 9.1pct at EUR 56.18, outperforming Germany’s blue-chip DAX index, which was trading just 0.6pct higher.

According to the newspaper, Deutsche Post Chief Executive Klaus Zumwinkel is looking to expand Deutsche Postbank operations through a merger, citing people close to the company.

U.S. investment bank Morgan Stanley (MS) is conducting exploratory queries, the newspaper reported. Deutsche Bank AG (DB), Allianz SE (AZ) and ING Groep NV (ING) were among the first potential partners contacted, the newspaper said.

Deutsche Post, Deutsche Bank, Allianz and ING declined to comment on the report.

Morgan Stanley wasn’t immediately available for comment.

Zumwinkel has said on several occasions that Deutsche Postbank “currently” isn’t up for sale, but with the deregulation of Germany’s postal market, “one could think more intensely” about the future for Deutsche Post’s stake in Deutsche Postbank.

And the complications of having Deutsche Post as a minority investor may be uncomfortable for any potential banking merger partner, the analyst said.

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Postcomm publishes decision document on Royal Mail zonal pricing application (UK)

Posted by | Feb 5, 2008 | |

Postcomm has today published a decision document giving its reasons for the rejection of Royal Mail’s application to charge large mailers – using products which are not part of the universal service – different prices depending on where in the UK their mail is delivered (Royal Mail calls this zonal pricing).

The reasons for this decision are broadly that Postcomm is not satisfied that the change would be introduced in a manner which avoids unreasonable changes to users, and because it involves discrimination.

In order to provide clarity to users of postal services, Postcomm announced in December 2007 that it would reject this application from Royal Mail.

This decision does not mean that Postcomm is ruling out any future moves towards retail zonal pricing for products outside the universal service should Royal Mail propose an alternative approach that avoids the problems presented by the current application. Postcomm is generally supportive of pricing that is more reflective of costs.

Royal Mail’s ‘zonal pricing’ application did not include services paid for by stamps or those bulk mail products that are included within the definition of the universal service and which must, under the Postal Services Act, remain priced at a uniform rate regardless of delivery zone across the country. It is open to Royal Mail to submit a new application if it can be framed to meet the relevant regulatory tests.

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Itella Logistics to acquire Kauko Group

Posted by | Feb 5, 2008 | |

Itella Logistics has signed an agreement on the acquisition of Kauko Group specialized in providing international transport services.

Kauko Group will complement Itella Logistics’s service range outstandingly through its solid expertise in international road, air and sea freight, and will enable us to be even better equipped to implement global transport solutions, says Vesa Vertanen, Senior Vice President, Itella Logistics.

The sellers in this acquisition include Kaukohuolinta Invest Oy, part of the Juuranto Group company, Kauko Group’s operative management and Spedex Oy. – We are delighted that the buyer is Itella, a Finnish company which, as an international logistics operator, has good prospects for developing the company further, says Helena Juuranto-Perttunen, member of Kauko Groups’ Board of Directors.

Kauko Group has approximately 110 employees and, in addition to its head office located in Tuusula, offices in Turku, Tampere, Lahti, Tallinn, Riga, and a representative office in Moscow. In 2007, Kauko Group posted net sales of approximately EUR 56 million.

In connection with the acquisition, Kauko Group’s current Managing Director, Jarmo Halonen, has been appointed Country Manager of Itella Logistics Finland.

In connection with the acquisition, Itella Logistics has also entered into an agreement concerning the acquisition of Kauko Group´s Swedish affiliate company , Hansar Logistics AB, which will continue to operate as an independent company until further notice.

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GLS to offers real-time tracking in Germany and Austria

Posted by | Feb 5, 2008 | |

GLS is now enabling its customers to track their parcels in real-time in Germany and Austria. The service is planned to be rolled out at other European subsidiaries in the next phase.

The parcels company said it has equipped its delivery staff with bluebooth-enabled mobile phones for data exchange with their hand-held scanners. On delivery GLS collects the digital signature and scans the individual parcel ID.

The delivery confirmation is then transmitted from the mobile phone directly into the GLS central tracking and tracing IT system. Customers can thus check their shipment status about 15 minutes after delivery. Up to now, the data was first transferred when the delivery van returned to the depot, meaning customers had to wait several hours for tracking availability.

Recipients not at home at the time of delivery can also check where their shipment has been held: at a neighbour’s, at a GLS parcel shop or back at the depot.

GLS said that the next step will be to extend real-time tracking to further European subsidiaries.

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Posten becomes sole owner of Norwegian Tollpost Globe

Posted by | Feb 5, 2008 | |

Posten has today entered into an agreement with DSV Road Holding (DSV) on the acquisition of DSVs shareholding of 50 per cent in Tollpost Globe. The acquisition means that that Posten becomes sole owner of Tollpost Globe and strengthens Posten’s position in the Nordic logistics market.

In 2001, Posten acquired half of Danish DSV. Today’s acquisition means that Posten becomes the sole owner of Tollpost Globe and that Henrik Höjsgaard, CEO of Posten Logistik AB, becomes chairman of the board of executives. Robin Olsen continues as CEO of Tollpost Globe.

Tollpost Globe is a strong brand in the Nordic logistics market. The company has 935 employees, a turnover of approx. NOK 2 400 million and has national coverage distribution in Norway based on its own infrastructure. Tollpost Globe has an extensive cooperation with Posten as well as DSV. Within the cross-border parcel and pallet service to and from Norway. The commercial relationship between DSV and Tollpost will continue even after the transaction.

The acquisition sum amounts to NOK 1 070 million. The transaction’s continuation is subject to approval of competition authorities.

1 NOK = 0.181189 USD

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Logistics News: Are Reports of DHL’s Possible US Exit Premature?

Posted by | Feb 5, 2008 | |

Rumors that have been circulating for awhile that DHL might leave the U.S. parcel market were given a boost recently from a couple of stock industry analyst reports and an interview with the CFO of parent company Deutsche Post.

CFO John Allan said Deutsche Post intends to retain “a significant presence in the U.S.,” but that the company is exploring many options for the business, such as giving up a controlling stake in its U.S. express division (DHL Express US).

Allan is the former CEO of Exel Logistics, which Deutsche Post acquired in 2005.

There have been reports that Deutsche Post has been in discussions with FedEx for some type of transaction. A few transportation industry stock market analysts have been lauding the potential for such a combination.

For example, in a research note to clients, UBS analysts called the potential deal “win/win on paper,” thought it warned, “Antitrust could be a major stumbling block with such a proposal, therefore an agreement doesn’t signal a done deal.”

Allan told a German newspaper, however, that a total sale of DHL in the U.S. is “very, very unlikely.” Many believe if any sort of deal is done, it is more likely to be with FedEx than UPS, since DHL compete globally with UPS more so than FedEx.

DHL had big aspirations for its parcel and express business in the U.S. after it acquired Airborne Express in 2003. The company has made major investments in sales, marketing and infrastructure in an attempt to penetrate the U.S. market, the world’s largest. It had to spend heavily to upgrade its ground assets in the U.S., which were modest compared to those of FedEx and UPS.

Today, however, DHL’s share of the express and parcel market in the U.S. remains about 9 pct, according to most estimates. Deutsche Post recently reported that is writing down the value of its U.S. assets by USD 887 million, and that its U.S. package-delivery business has incurred annual losses of nearly USD 1 billion.

There have been some successes, however. For example, DHL recently announced an agreement with Walgreen’s, in which it will set up shipping locations for small businesses and consumers at more than 6,500 Walgreens locations by the end of this year, similar to what FexEx offers at its Kinko’s print stores chain.

The U.S. experience is an exception for Deutsche Post, which in general has enjoyed solid growth and profits in the rest of the world. DHL enjoys strong positions in Europe and Asia. However, its stock price has lagged the market. The Wall Street Journal reports that Allan, relatively new to the CFO spot, is taking a look at DHL Express US in part to “mend ties with investors who criticized the company for focusing too much on empire-building at the expense of profits.”

The researchers at investment firm Bear Sterns believe Deutsche Post may shed its domestic U.S. express and parcel business, while continuing to serve U.S. shippers for goods going to international markets. That could argue for a hybrid strategy in which it sells a controlling interest in the U.S. operation, but maintains a stake to help feed its international services.

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USPS achieves positive net income despite volume drop

Posted by | Feb 5, 2008 | |

The U.S. Postal Service ended the first quarter of fiscal 2008 with net income of USD 672 million on revenue of USD 20.4 billion, according to preliminary financial results released Jan. 30.

Total revenue for the quarter ending Dec. 31 was up 3.5 percent over the same period last year primarily due to the May price change. The price increase masked weak volume for the quarter. Total mail volume declined 3 percent; First-Class Mail was particularly affected, declining by 3.9 percent.

“The economic downturn was the main factor for the volume decline, as the hard-hit financial and housing sectors are heavy users of the mail,” said Postmaster General John Potter. “I’m proud our managers and employees adjusted quickly to these changing market conditions, making a positive quarterly net income possible. Not only did they help us tighten our belt, but they provided record levels of service.”

Total expenses were USD 19.7 billion, versus 22.7 billion for the same period last year. The USD 3.0 billion difference was due to the one-time expense of funding retiree health benefits required in quarter one 2007 by the Postal Accountability and Enhancement Act of 2006. Excluding the one-time cost, expenses remained constant, despite rising fuel and labor costs. This was accomplished while serving an additional 1.7 million new addresses versus the same period last year.

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