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UPS: Fourth quarter results

Posted by | Jan 30, 2008 | |

UPS reported adjusted diluted earnings per share of USD 1.13 for its fourth quarter, an 8.7 pct increase over last year. Revenue improved 6.1pct driven by a double-digit increase in international export volume, growth and firm pricing in the U.S. package business and market-leading shipment gains at UPS Freight.

During the quarter, the company announced the ratification of a new five-year agreement with the International Brotherhood of Teamsters, eight months before expiration of the existing contract. As a result, USD 6.1 billion was paid to withdraw approximately 45,000 UPS employees from the Central States multi-employer pension plan and expensed to the U.S. Package segment in the quarter. Including the impact of that charge, diluted earnings per share fell to a loss of USD 2.46 for the three-month period.

The fourth quarter produced solid growth in spite of a sluggish U.S. economy. Consolidated average daily package volume reached a record level of 17.7 million pieces, an increase of 359,000 per day. Adjusted net income for the quarter benefited from a lower effective tax rate.
For the full year, the company delivered a record 3.97 billion packages, an average of 15.8 million per day. Consolidated revenue climbed 4.5pct to USD 49.7 billion. Adjusted diluted earnings per share were USD 4.17, an increase of 8pct compared to 2006 and at the midpoint of UPS’s earnings guidance for 2007. Before adjustments, operating profit equaled USD 578 million and diluted earnings per share totaled USD 0.42.

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The International Organization for Standardization to work hand in hand with the UPU

Posted by | Jan 30, 2008 | |

Alan Bryden, Secretary General of the International Organization for Standardization (ISO), and Edouard Dayan, Director General of the Universal Postal Union, concluded a cooperation agreement today aimed at strengthening the exchange of information for finalizing standards of mutual interest to the two organizations.

Closer cooperation in standardization work has become necessary in an increasingly specialized technological environment. Furthermore, liberalization and postal sector developments have led to the development of new standards to meet the needs of the sector and its customers for enhanced quality of service.

As postal operators diversify their activities, incorporate e-commerce into their parcel and logistics services and develop their financial services, they need to operate in a standardized environment.

As Edouard Dayan pointed out, “The UPU manages a three-dimensional network: physical, electronic and financial. We have already developed many standards for the processing of physical mail. We now need to focus on standards for electronic and financial services. The cooperation agreement with the ISO is intended to do just that.”

As a standards organization, the UPU has already developed nearly a hundred technical standards for the postal sector. The agreement will enable the UPU to better position itself on the world stage and help it to prepare and better disseminate postal standards, particularly for financial and electronic services, that are recognized internationally, not only by postal experts but also by standards experts in other activity sectors.

One feature of the agreement is the creation of a contact committee of six officials responsible for implementing the provisions of the agreement. Thus, the ISO and the UPU will each be able to incorporate in its own standards references to the other organization’s standards.

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USPS first-quarter results reflect drop in mail volume

Posted by | Jan 30, 2008 | |

The U.S. Postal Service announced that mail volume was down 3.0 percent, or 1.7 billion pieces, for the first quarter of fiscal 2008, according to preliminary financial results presented today to the Postal Service Board of Governors.

First-Class Mail volume decreased 3.9 percent and Standard Mail decreased 2.6 percent in the quarter ending Dec. 31, 2007.

Chief Financial Officer and Executive Vice President H. Glen Walker attributed the declining mail volume to “disturbing trends” in the overall U.S. economy.

Net income for the first quarter is estimated at USD 672 million on revenue of USD 20.4 billion.

Final first-quarter financial results will be released in February.

First Quarter Service Scores

National on-time performance scores for the delivery of First-Class Mail hit all-time first-quarter highs in two of the three categories the Postal Service tracks. National overnight service was 96 percent on-time — a first for three quarters in a row. Two-day service was 93 percent on-time. Three-day performance was 88 percent, a two-point improvement over the same period last year.

First-Class Mail performance is measured independently by IBM Global Business Services. The process measures First-Class Mail from the time it is deposited into a collection box until it is delivered to a home or business.

Other Board Action

The Board today approved three facility projects: expansion of the processing and distribution centers in West Sacramento, CA, and Providence, RI, and the purchase and renovation of an existing building and site to serve as the Perris, CA, Delivery Distribution Center.

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US Postal Service revenue dips with economy’s downturn

Posted by | Jan 30, 2008 | |

The U.S. Postal Service is delivering its best service ever, but the slowing economy kept the agency short of its expected revenue by almost a half-billion dollars last quarter.
A new pricing structure was expected to boost revenues, but the nation’s slowing economy has meant less mail. The Postal Service’s first-quarter volume dropped by 1.7 billion pieces, almost 3 percent, from the same period in 2007. The first quarter runs from October through December. The decrease affected virtually all categories of mail. The steepest decline was in Express Mail, which lost nearly 11 percent of its volume.

Periodicals were the only category to post an increase, a modest 1.2 percent.

Despite the drop, the Postal Service managed to post USD 689 million in increased revenue over the first quarter of 2007, mostly attributable to the increased fees. But that figure was USD 500 million short of expectations: The higher prices couldn’t fully offset lost revenue.

Performance reviews, on the other hand, were overwhelmingly positive. The first quarter is typically the most difficult, because of holiday shipping and unpredictable weather. But national service was at all-time highs, with 96 percent of overnight mail and 93 percent of two-day mail reaching its destination on time. And a national poll found 92 percent of residential customers were pleased with the Postal Service.

The numbers were especially good for Chicago, which last year ranked as the worst mail market in the nation. Ninety-four percent of Chicago’s overnight mail and 92 percent of its two-day mail arrived on time in the first quarter, increases of 5 and 11 percent over 2007.

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MaxBox expands into Ireland, Australia

Posted by | Jan 30, 2008 | |

The MaxBox is back and expanding rapidly.

Shortly after announcing the launch of MaxBox Digital Retail Ltd., a rebranding of MaxBox’s original home, Felix Corp., the new company is showing signs of life thanks to two deals that will bring a minimum of 2,000 MaxBox kiosks to Ireland and Australia.

MaxBox closed the Ireland deal last week at the ATEi/ICE trade show in London. Ireland-based Cyberhut Ltd., a provider of automated Internet terminals to the retail sector, signed a three-year contract to distribute a minimum of 1,000 MaxBox digital retail kiosks across northern and southern Ireland. MaxBox also plans to announce a similar deal to release another 1,000 kiosks in Australia, said Andy Egan, chairman and chief executive officer of MaxBox Digital Retail, in a phone interview.

These announcements come just a month after Egan’s resignation from Felix Corp. over business differences with the company’s board chairman. However, Egan said in reality he was pushed out and eventually fired. He attributes his downfall at Felix to the chairman’s impatience with the MaxBox’s rollout.

“He wanted to do something that was more quickly and the MaxBox has always been something that has come out more slowly,” Egan said. “Finally, they weren’t supportive anymore, which I thought was ridiculous.”

Thanks to mortgaging his home, car and a few other personal items, Egan, the founder of Felix Corp., bought back the trading arm of the company from its administrators on Jan. 11.

“I think I personally have more in the kiosk industry now than anyone else in the world,” he said only half-jokingly.

One stumbling block to taking back the MaxBox portion of Felix was that the company’s administrators had already begun to yank the already deployed MaxBox kiosks. However, Egan said some of the location’s owners refused to give up their machines. As for the ones that did get removed, the company is working to get those back in place.

MaxBox has also renewed talks with KIOSK Information Systems to install MaxBox software to new and existing kiosks in the United States.

Egan said his goal in obtaining the MaxBox property again was to finish what he started. Though he said the rollout will probably continue at a slow pace for now, he expects that once a big name retailer comes on board, the number of kiosks in deployment will increase rapidly.

“I think it will still come slow for us,” he said. “But I think 2008 is the year we will get some traction.”

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Consumer interest in mobile commerce extends beyond banking

Posted by | Jan 30, 2008 | |

Consumers across the United States are ready to adopt a broad set of mobile commerce applications, according to new research from Dove Consulting. The research, sponsored by PSCU Financial Services, was conducted using focus groups in multiple cities, and gauged consumer interest in and predicted future use of three major mobile applications: mobile banking (using a mobile device to access banking information), mobile payment at the point-of-sale (using a mobile device to make purchases), and mobile person-to-person payments (using a mobile device to send money to another mobile device).

When asked which of these mobile applications they were most excited about using, nearly two-thirds of study participants chose mobile banking and 30 percent chose mobile payment at the point-of-sale. Only a handful indicated they were excited about mobile person-to-person payments.

According to Chris Allen, a director with Dove Consulting and head of the payments strategy team, these results are in line with the direction the financial services industry is moving.

“Given everything financial institutions have done to encourage the adoption of mobile banking, it isn’t surprising that more people are comfortable with the technology and interested in using it,” Allen said. “I expect as more applications are developed that allow people to use their phones and mobile devices to pay for goods and services, consumer interest in this technology will grow and we will see it move into the mainstream, probably within the next two-to-four years.”

Participants indicated they are ready to start using mobile banking and mobile payment at the point-of-sale now. For both applications, adoption is likely to begin with a smaller group of tech-savvy users embracing the applications early, and the majority of consumers adopting soon afterwards once the product is more established. Person-to-person mobile payments did not resonate as strongly with participants, with few indicating they would adopt at any point in time.

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Western Union Pilots Personal Loans Offer in Hong Kong

Posted by | Jan 30, 2008 | |

Western Union customers in Hong Kong can soon apply for small personal loans from PrimeCredit Limited (“PrimeCredit”), a wholly owned subsidiary of Standard Chartered Bank PLC, following an agreement signed by the two companies to offer a pilot consumer lending program.

Effective from 18 February 2008, the program will allow Western Union consumers in Hong Kong to draw 12- to 18-month installment loans from PrimeCredit, then remit the borrowed money via Western Union Money Transfer.

“One of Western Union’s strategic objectives is continually to explore new service offerings that meet our consumers’ needs,” said Isabella Lau, regional vice president, Marketing, Asia Pacific, Western Union. “Our business model is to generate revenue from loan origination and repayment.

“We know that our consumers often do not have access to banking and financial services. With Western Union’s extensive experience serving this segment, we are well-placed to identify and provide access to quality services that meet their needs.”

Internal research found that 79 percent of consumers sending money transfers are receptive to other financial services offerings from Western Union, and that one in four Western Union consumers would consider applying for a loan product associated with Western Union.

PrimeCredit has more than 10 years of experience serving migrant workers in Hong Kong, with 17 of its 31 branches focused specifically on overseas workers. Many of PrimeCredit’s Hong Kong branches are open on Sundays, offering additional flexibility for consumers.

Initially, the program will be offered to Western Union’s Filipino consumer base in Hong Kong. The offer is expected to be extended to other consumer segments and other markets in the Asia Pacific region once the program matures.

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Deutsche Post World Net and Daimler AG give go-ahead for the first hybrid truck in Europe

Posted by | Jan 29, 2008 | |

Deutsche Post World Net is the first logistics company in Europe to trial hybrid trucks in its operations. The go-ahead for the largest fleet test in the company’s history was given on January 29, 2008 during the World Mobility Forum in Stuttgart. Andreas Renschler, member of the Board of Management of Daimler AG and Head of Daimler Trucks, today handed over the first two vehicles, a Mercedes-Benz Atego BlueTec Hybrid and a Mitsubishi Fuso Canter Eco Hybrid, to Deutsche Post World Net.

The trial will initially include DHL Express operations in the UK as well as mail transport in Germany. In the coming months further Daimler hybrid vehicles will be integrated into the DHL fleet.

DHL can already draw on past experiences with hybrid vehicles in Japan where DHL has been successfully using the Fuso Canter Eco Hybrid since July 2006.

Deutsche Post World Net is currently working on a comprehensive climate protection program for the entire Group. One point of focus is the use of alternative drives, such as electric, gas and hybrid engines. With its DHL Innovation Center, opened in March 2007, the Group thus is leading in technologies and innovations. It is facing up to its responsibility as the world’s market leader in logistics and helping to limit greenhouse gas emissions.

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