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Deutsche Post cut to 'sell' at Goldman Sachs

Posted by | Aug 28, 2007 | |

Goldman Sachs has cut its rating on Deutsche Post to ‘sell’ from ‘buy’ and its target price to 18 eur from 24 eur, according to dealers, saying any delay in German mail liberalization seems unlikely, implying volume loss and margin erosion for the company.

In a note this morning, Goldman said a delay to German mail liberalization – scheduled for 2008 – now seems unlikely.

The broker said a cost-cutting program at Deutsche Post is unlikely to compensate for revenue declines. Liberalization threatens the company’s free cash flow generation and, as such, activist/private equity investors may shy away, reducing pressure for internal change, said Goldman.

Goldman has added Deutsche Post to its ‘conviction sell’ List.

Since it was upgraded to ‘buy’ on January 24, 2006, noted Goldman, the stock has declined 1.1 pct vs. a 19.1 pct increase in the FTSE World Europe.

The German coalition government has agreed to continue with plans to liberalize the market for mail weighing less than 50 grams for January 2008, assuming agreement can be reached on minimum wage legislation, noted Goldman.

It expects this to drive poor share price performance for Deutsche Post.

The broker has reduced its EBIT estimates by 9.5 pct for 2008 and 13.7 pct for 2009.

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E-commerce grows 50 pct per year in Brazil

Posted by | Aug 28, 2007 | |

At a growth rate of 50 pct a year, electronic commerce is emerging as a new business alternative for micro- and small businesses. According to the consultant at the Brazilian Chamber of Electronic Commerce, Edílson Flausino, business via internet already account for 17 pct of sales by companies that use the system professionally.

Lemuel Costa e Silva, Electronic Commerce manager at the Department of Postal Service Business and Operations on the Internet, said that approximately eight million people throughout the Brazilian territory buy products at virtual stores.

Lemuel cited store chain Lojas Americanas as an example of successful electronic commerce in the country, as he explained that ‘americanas.com’ is responsible for up to 40pct of the company’s business. The manager presented the postal service’s Correios NetShopping as one of the options for entrepreneurs to sell via the internet: “we can host stores and create links to companies in our Website.”

Fabíola Cordeiro, product manager at e-bit Informação, a company that provides information on electronic commerce, was established in 1999, and pioneered the conduction of surveys on e-commerce habits and trends in Brazil, states that around 1,000 virtual stores in the country are currently listed on e-bit: “the figure tends to grow from 41 pct to 76 pct each year.”

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UPS and iShip Celebrating Anniversaries

Posted by | Aug 28, 2007 | |

UPS and its subsidiary iShip, two companies founded in the Seattle area, both are celebrating major anniversaries this year. UPS turns 100 today and iShip now is 10 years old.

iShip developed and supports Web-based technology used to process small package shipments at outlets of The UPS Store, Mail Boxes Etc., UPS Customer Centers and corporate customers nationwide.

Acquired by UPS in 2001, iShip “offers a reliable and scalable solution that can handle a great deal of shipping volume, especially during the peak shipping periods,” said Dave Barnes, UPS’s chief information officer. “It also provides customers complete visibility and greater control over shipping expenditures.”

iShip, Inc., provides Web-based shipping and manifesting solutions to more than 5,000 retail shipping centers and thousands of enterprise users nationwide. iShip’s customers use the software to ship tens of millions of packages annually. iShip’s suite of products is highly configurable and can be deployed as either single carrier or multi-carrier solutions, depending on the customer’s needs.

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DHL chosen by leading regional department store chain

Posted by | Aug 28, 2007 | |

DHL announced it has been selected as the exclusive small package delivery provider for the Bon-Ton Stores, Inc., one of the largest regional department store chains in the United States. DHL will provide US domestic Express and home delivery services, supporting The Bon-Ton store’s entire network.

The Bon-Ton operates 278 stores in 23 states in the Northeast, Midwest and upper Great Plains under the Bon-Ton, Bergner’s, Boston Store, Carson Pirie Scott, Elder-Beerman, Herberger’s, Younkers and, under the Parisian nameplate two stores in the Detroit, Mich. area. In addition to a bridal registry and new on-line store, The Bon Ton offers a broad assortment of brand-name fashion apparel and accessories for women, men and children, as well as cosmetics and home furnishings.

DHL worked with Bon-Ton to offer store customers the added convenience of delivery of in-store items purchased at any Bon-Ton store. DHL will deliver these items upon request by customers to a business or residence through its Express delivery or DHL@home business-to-residential delivery service.

From Bon-Ton fulfillment centers, DHL will deliver all products ordered through the online store, as well as items ordered from the Bon-Ton Bridal Registry.

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FedEx adds new flights between Memphis (US) and Manchester (UK)

Posted by | Aug 28, 2007 | |

FedEx Express, the cargo airline of FedEx Corp., is launching new direct flights between its headquarters in Memphis and Manchester, England.

An MD-11 flight originating at the shipping giant’s hub in Paris will stop in Manchester each day Monday to Thursday before flying to Tennessee.

The flights will increase the company’s daily capacity between the U.S. and U.K. by up to 50 percent and between Europe and the U.S. by 20 percent, FedEx announced Tuesday.

“Manchester is the fastest-growing region in the U.K., which has led to increased market demand for reliable, time-definite express transportation services,” said Robert W. Elliott, president, FedEx Express, Europe, Middle East, Indian subcontinent and Africa.

The airline already operates two express freighters from Stansted in southeastern England to Newark, New Jersey, and Memphis. The new flight is expected to increase next-day service and allow later pickup times for northern Britain.

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UPS Celebrates it's 100-Year Anniversary

Posted by | Aug 28, 2007 | |

UPS Inc. celebrates it’s 100-year anniversary later this month, it now is the world’s largest shipping carrier – a USD 47 billion business with a fleet of trucks, an airline and operations in 200 countries.

Increasing competition for delivery of goods has meant the company has had to broaden its global reach and expand its business beyond small package delivery to shipping heavy freight and providing logistics services for companies.

But even as the Internet has made it easier to send, receive or download items electronically instead of paying a service to deliver them, the breaking down of trade barriers has given shippers like UPS overseas opportunities they haven’t had in the past.
the global economy.

These days, the U.S. small package delivery market has slowed along with the economy. As a result, UPS has been increasingly looking beyond U.S. borders for business, offering faster delivery to worldwide destinations. International growth has helped the company’s bottom line.

Last month, UPS reported a 4.1 percent rise in second-quarter earnings on a modest increase in sales. The company’s shares, on an adjusted basis, are up more than 14 percent over the last year.

A century from now, Chief Executive Mike Eskew expects that delivering small packages will still be an important part of the Atlanta-based company’s business, but he isn’t sure it will be the largest part. In 2001, the company expanded its services by acquiring the Mail Boxes Etc. chain. Most of the stores were later renamed The UPS Store.

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Post Office marks 145th anniversary of savings

Posted by | Aug 28, 2007 | |

As the Post Office marks its 145th year as a home for the nation’s savings; research into today’s savings behavior compared to yesteryear reveals that we’re saving less than our counterparts did last century.

Overall, one in four (24 per cent) people today don’t save at all and a third (32 per cent) save infrequently. In contrast, 70 per cent of adults play the National Lottery on a regular basis, meaning we’re more likely to play the lottery than save regularly.

The majority of savers (56 per cent) say they are not saving for any particular goal, just “the future”. The single biggest reason for saving is for a holiday (29 per cent).

A third (35 per cent) of 18-24 yr olds are saving for a deposit on a home, while almost half (48 per cent) of those aged 55 – 64 are frantically topping up their retirement savings.

Lack of spare money is the main reason for not saving today (71 per cent). For 27 per cent of people there are just too many debts to pay off, while 17 per cent say they just spend all their money before they can save it.

The Post Office has produced a historic savings time line to chart the UK’s savings habits.

It reveals the savings ratio – the proportion of post-tax income that households save rather than spend – has varied significantly over the years. The highest peak at 12.4 per cent was in 1980 (along with high inflation). One of the lowest periods occurred between 1946 and 1955 during the post war slump when the savings ratio only entered positive territory once (0.3 pct) during Queen Elizabeth II’s coronation.

With the savings ratio now at 2.1pct – its lowest point since 1959 – the Post Office is using this anniversary as a timely reminder for people to remember the importance of saving.

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Deutsche Post rated second class

Posted by | Aug 28, 2007 | |

German mail operator Deutsche Post is not going to have a very happy new year in 2008 when the German postal sector is liberalized, say the analysts that downgraded the stock on Tuesday.

Although there have been efforts to delay the liberalization of Europe’s 88 billion euro (USD119.9 billion) mail market, which was pushed back to 2011 from 2009 in July, Germany is still on target to open up its national postal sector to competition at the start of next year.

“A delay to German mail liberalization (scheduled for 2008) now seems unlikely,” said Matthew Lloyd, analyst with Goldman Sachs. He told clients that Deutsche Post faced volume loss and margin erosion from increased competition, and downgraded the stock to “Sell” from “Buy.”

Shares in Deutsche Post fell 67 eurocents (91 cents), or 3.1 pct, to 20.82 euros (USD28.37) in Frankfurt. The stock finished bottom of the DAX index, which slid 28.52 points, or 0.4 pct , to 7,457.47.

Although Deutsche Post currently has over 90 pct market share in Germany, the threat to its business from outside competition has seen the company forecast a drop in earnings between 10 pct -20 pct in 2009.

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