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New postal union finding its feet / JPU merger with Zenyusei creates nation's largest corporate labor union

Posted by | Oct 30, 2007 | |

The Japan Postal Union (JPU) and All Japan Postal Office Labor Union (Zenyusei)–two of now privatized Japan Post’s biggest unions–merged on Oct. 22 to form the nation’s largest corporate labor union.

With 220,000 members, Japan Post Group Union (JP Union) eclipses NTT’s 180,000-member labor union. Zenyusei Chairman Yoshikazu Yamaguchi became the first chairman of the merged union, while JPU Secretary General Shozo Namba landed the post of secretary general.

JPU, with a membership of 137,000, had indicated a strong interest in a merger, while Zenyusei, with 83,000 members, was hesitant about a tie-up over concerns it would be overwhelmed in the JPU, observers said.

However, the merger plan was pushed through more quickly as the administration of former Prime Minister Junichiro Koizumi pressed on with privatization.

JPU and Zenyusei had agreed to oppose postal privatization, and although the agreement was only a formality, it proved successful in allowing the two to coordinate their efforts in opposing the changes.

But as the country’s largest union, JP Union will now have to bear the heavy responsibility of tackling a number of thorny issues.

First and foremost is the question of what it will do in the annual wage negotiations in the spring. The union of NTT Corp., which was privatized in 1985, has been taking part in the joint annual spring wage negotiations as a private corporate union since NTT was privatized.

Akira Yamagishi, the first chairman of the Japanese Trade Union Confederation (Rengo), came from the NTT union. In contrast, none of the JPU leaders were chosen for leadership positions in the defunct General Council of Trade Unions of Japan (Sohyo) and Rengo.

Although one of the chairmen of the defunct Japan Socialist Party was a member of JPU, the union did not have a strong voice in the labor movement because internal differences meant its leadership lineup was changed repeatedly.

Zenyusei, for its part, failed to make its presence felt among government and public workers unions.

Next year’s spring labor campaign will therefore provide a useful insight into the JP Union’s future direction.

In addition, there are questions over how much distance the JP Union will keep from the management of the privatized entities. Corporate downsizing is unavoidable at a private firm whose business has deteriorated. Restructuring efforts might include personnel cuts through transfers, secondments and early retirement as well as a review of operations.

One JP Union official commented: “It’s very hard to increase earnings while maintaining regional services. So labor and management will need to work together in finding a new business model.”

The mail delivery business has already been affected by a sharp increase in the number of nonregular workers. Labor and management have signed an agreement on a system opening the door to nonregular workers to become regular workers. Improving working conditions for nonregular workers will be essential to facilitate any expansion of the JP Union.

This may run counter to the needs of a private firm that is seeking to increase efficiency. But if the JP Union seeks only compromises with management, it will have less of an impact than it might otherwise have, despite its size.

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Competition in UK starting to benefit smaller businesses

Posted by | Oct 30, 2007 | |

Research commissioned by Postcomm, the independent regulator for postal services, has found the benefits that large mailers have been experiencing since the market was opened have now started to slowly spread to smaller businesses. However, much more progress is needed and the challenge posed by growing alternatives to mail confirms the need for mail operators to continue to pursue greater innovation.

The market research, which forms part of Postcomm’s latest annual Business Customer Survey, revealed:
Although Royal Mail remains the dominant operator, one in five small and medium mailers and more than a third of large mailers are using more than one mail provider;
one in five respondents have explored alternatives to mail and have moved some of their mail to other media in the past 12 months which confirms the need for all postal operators to place more emphasis on customer service and innovation; and more than half of respondents agreed that competition has improved choice and more than a third believe competition has improved Royal Mail’s quality of service.

Also published today is Postcomm’s annual Competitive Market Review (CMR), which looks at factors affecting competition in the postal sector. Key findings of the CMR included:
– mail volumes were 2 per cent down on last year but there are indications that direct mail is growing in sectors such as building societies, charity, and health;
– end-to-end competition has declined by four million items and stands at less than one per cent of total mail volume, but mail volumes collected by ‘access’ operators and delivered by Royal Mail have more than doubled and now represent 19 per cent of revenue-derived mail volumes.

Both documents were launched at the UK Mail Show.

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Consultation Starts On Changes To Post Office Network – Post Office Ltd announces plans for Cardiff and Glamorgan Valleys

Posted by | Oct 30, 2007 | |

Post Office Ltd opened a six-week local public consultation on its Area Plan for the Cardiff and Glamorgan Valleys area. In line with the criteria and factors set by the UK Government in its Response Document (DTI The Post Office Network, Government response to public consultation May 2007 – www.dti.gov.uk/consultations/page36024.html), the Area Plan proposes future provision of Post Office services through a network of 153 branches across the area, resulting in the closure of 31 existing branches (see full list below).

Under the proposals, more than 99.7 pct of the area’s population will either see no change, or will remain within one mile (by road distance) of an alternative branch.

The detailed Area Plan proposal for Cardiff and Glamorgan Valleys area is now available from Post Office Ltd at: www.postoffice.co.uk/networkchange or by emailing: [email protected] or by writing to: Post Office Ltd, Freepost Consultation Team (no stamp required)

Post Office Ltd is now seeking views on the proposed future service provision in the area, in particular views on access to Post Office services, the accessibility of alternative branches to those proposed for closure. Consultation is due to end on December 10, 2007.

The UK Government has already undertaken a 12-week national consultation before reaching a decision to reduce the UK-wide network of Post Office branches by up to 2,500 from its current level of over 14,000, while continuing to provide funding (subject to EU state-aid clearance) to support a more sustainable network in the future. The proposals now published support the national accessibility criteria introduced by the UK Government.

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Williams Lea enters German market with Corporate Information Solutions proposition

Posted by | Oct 30, 2007 | |

Williams Lea, subsidiary of Deutsche Post World Net and leading global provider of Corporate Information Solutions, is successfully moving ahead with its expansion strategy. This month, the company will start operating in Germany under the brand Williams Lea Deutschland. As part of this expansion, Williams Lea Deutschland will take over Deutsche Post’s document management business with more than 2,800 employees at more than 60 locations in Germany.

The launch has been marked with the announcement of a multi-year exclusive partnership with The Reader’s Digest Association, Inc (RDA), the world’s largest global publisher and direct marketer. The relationship represents a managed cost base of over 700 million euros over the contract duration and will see Williams Lea deliver outsourced print procurement and marketing solutions to RDA’s operations in 19 countries with the global transfer of 100 RDA employees.

Since being acquired by Deutsche Post World Net at the beginning of 2006, Williams Lea has nearly doubled its revenue. For the ongoing fiscal year, the company is projecting its revenue will reach 1.2 billion euros and boasts a client portfolio including Microsoft, Norwich Union, British Telecom and BMW.

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Online mailing service ViaPost draws interest from DM

Posted by | Oct 30, 2007 | |

Online postal service ViaPost, due to roll out in early December, has attracted the attentions of direct mail printers.

The initiative, which could cut a letter’s carbon footprint by 75 pct and involves Royal Mail and Microsoft, allows users to send files direct from their computer to a local production site before being delivered by Royal Mail.

ViaPost chief executive Simon Campbell told printweek.com: “The benefit to printers is that each roll-out will be quick and we can tell the printer from the off that we will fill their capacity to, say, 50 pct or however much they can provide us with.”

“If someone from China wants to send a letter to the UK using ViaPost, you are cutting out the air mile, which provides a massive saving.”

ViaPost has already forecasted sending “10m items” per week based on registrations of interest to its trial website.

The service will launch with eight distribution sites in “high-volume” areas, such as London, with plans to increase this to 25 as the scheme builds momentum.

ViaPost upholds confidentiality by employing “industrial closed processes” when printing and processing the letters.

“We are using HP Indigo and Xerox iGen3 machines and Pitney Bowes folders. The levels of security are very high,” said Campbell.

The service is due to launch in time for the Christmas rush.

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Canadian Pacific Railway (US) (CP-$70.46-Peer Perform). What a Difference a Year Makes

Posted by | Oct 30, 2007 | |

GWR, Reports before the market, call at 11:00AM, (888) 428-4479

Canadian Pacific Railway (US) (CP-$70.46-Peer Perform)

What a Difference a Year Makes

• UPSIDE REPORT. Yesterday evening, CP reported 3Q continuing EPS of C$1.23, above both Cons. of $1.18 and our $1.17. Rev., EBIT and EPS grew by 3%, 8% and 14%, mostly decelerated from 7%, 9% and 12% growth during 2Q. Results were a bit worse on an operating basis as CP benefited by $0.02 from a lower tax rate and from a 1-time labor settlement gain which was not yet quantified.

• REPORTED YIELDS TURN NEGATIVE. Total yields declined 3.7% y-o-y, well below our +0.3% estimate and down from +2.2% last qtr. Yields were negative at CP for the 1st time since 1Q:04, although we suspect most of this is related to mix and the weaker US dollar. Total vols increased 6.2% and margins improved 110bp y-o-y including the impact from the 1-time labor benefit.

• CP GUIDES TO LOW END OF EPS RANGE. CP now expects C07 EPS at the low end of its unchanged C$4.30-$4.45 range. Despite -2.2% vols in C06, CP grew EPS by 20% last year and beat its original EPS guidance by C$0.10. However, this year with vols tracking up 3% YTD, CP is reducing guidance to the low-end of its initial range and forecasting only 9% EPS growth. Despite stronger vols, CP is suffering with slower yield growth and fewer productivity gains. What a difference a year makes.

• LOWERING OUR EPS ESTIMATES. We are lowering our 4Q:07 estimate by 7% to C$1.21, vs. prior Consensus of C$1.28. Our C07 estimate of C$4.33 is now in-line with CP’s lowered expectations. We are also lowering our C08 estimate by 4% to C$4.90, and we are now below prior Consensus of C$4.94. We expect the weak U.S. dollar to continue to be a drag on reported rev. and EPS.

• INVESTOR WORKSHOP TODAY. CP will host its earnings conf. call later this morning, followed by its analyst day presentations in the afternoon. Earlier this morning, CP guided to C08 EPS of C$4.70-$4.85, which at the midpoint is 3% below prior Consensus and 2%-3% below our downwardly revised estimate from last night. We will revisit our model following today’s meetings.

INVESTMENT CONCLUSION: CP is currently trading at 14.8x and 7.3x our downwardly revised U.S. dollar EPS and EV/EBITDAR estimates. This compares with its 1, 3, and 5-year averages of 15.3x, 14.3x and 13.5x and 8.6x, 7.7x and 7.3x. This is also roughly in-line with our Large Cap Rail Index excluding CP, which is currently trading at 15.0x and 7.3x.

We continue to be impressed with CP’s ability to grow volumes this year when the other rails have not been able to do so. We also remain impressed with management’s continued evolution to a culture of cost improvement. That said, EPS growth has slowed this year despite increased volume growth and into reduced productivity measures (speed, dwell, etc.). We expect continued pressure on CP’s earnings over the intermediate term from 1) the relatively weak U.S. dollar, 2) contractual down y-o-y Elk Valley coal pricing during C08 and early C09, and 3) the likely ramp-up of its build-in to the Powder River Basin at some point towards the end of C08 or C09. At current high end historical valuations and facing these EPS headwinds, we remain on the sidelines with a Peer Perform rating.

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New international subsidiary in Russia for Wincor Nixdorf

Posted by | Oct 30, 2007 | |

Wincor Nixdorf has reinforced its presence in the Russian market and established its own subsidiary. “We want to strengthen our already well-established position in the promising Russian market,” explains Eckard Heidloff, President and CEO of the company, to an audience of representatives from politics, industry and press at the subsidiary’s opening in Moscow. He foresees retail banks and retail companies on the Russian market entering a phase of competition among themselves, thus providing Wincor Nixdorf with potential for growth. “In the Russian market, our customers are increasingly concerned with combining customer-friendliness and efficient processes. We would like to support them in this endeavor and, together with our partners, intend to focus on providing software and services in addition to hardware,” Heidloff pointed out.

Wincor Nixdorf finds itself in a good starting position, both in the banking and retail sectors. Strategic cooperation with local companies acting as sales and service partners has been ongoing since 1997. This business model has proven to be very successful and will be supported and extended by strengthening Wincor Nixdorf’s resources in Russia. In the last ten years, market share of ATMs has risen from 4 percent to 30 percent while the market share of electronic POS systems for retailers saw a remarkable increase from 1 percent to 42 percent. As measured by their balance sheet totals, eleven of the twenty largest retail banks are customers of Wincor Nixdorf’s. And in terms of sales, twelve of the twenty largest Russian retail companies are among Wincor Nixdorf’s customer base. In addition, Wincor Nixdorf supports international retail companies wishing to expand in the Russian market.

With 256 ATMs and 456 electronic POS systems per one million inhabitants, the Russian market offers promising perspectives compared with Western Europe. By way of comparison, Western Europe has 736 ATMs and just under 5000 POS systems installed per one million inhabitants.

Many banks and retail companies are also investing in improvements to process efficiency and customer service due to increasing competition in the Russian market. With total solutions for process improvement that include hardware, software and services, Wincor Nixdorf can make a considerable contribution to the competitiveness of banks and retail companies. In the future, Wincor Nixdorf will increasingly strive to adapt internationally successful concepts to the conditions and requirements of the Russian market. By adding further resources to its own existing service networks as well as those of partner companies, Wincor Nixdorf aims to improve service quality and availability even more.

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SingPost's net profit jumps almost 10%, revenue up 9

Posted by | Oct 30, 2007 | |

Singapore Post has booked an almost 10 per cent climb in earnings for its fiscal second quarter, thanks to higher postal revenue as well as gains by its logistics and retail businesses.

Net profit for the three months ended in September amounted to SUSD 39.66 million.

SingPost’s new CEO Wilson Tan said at a news briefing Tuesday that he looks forward to pushing new plans of expansion into 2008.

SingPost has turned in earnings numbers that were slightly better than market forecasts.

Net profit jumped almost ten per cent from the same period a year ago while revenues climbed nine per cent. This takes its net profit at half-time to SUSD 78 million.

“We have been able to see good organic growth and that is something that we are very pleased with. Certainly there were some price adjustments that we’ve been doing, and finally (on) the productivity side of things, we have been able to be a little bit more effective and efficient in our operations.”

While the earnings were better than market forecasts, SingPost also saw a 9 per cent increase in operating expenses mainly caused by rising labour costs, which rose by 7.9 per cent to SUSD 30.8 million.

The postal operator, however, is positive in its outlook, saying it is well-positioned to address challenges arising from the liberalisation of basic mail services market.

It also plans to grow its hybrid mail and online shopping service vPost businesses in the region.

SingPost has declared a dividend of 1.25 Singapore cents per share for the second quarter

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