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Postal users left with mixed feelings by delay in postal liberalisation

The Postal Users Group (PUG) expressed disappointment about the further delay in the liberalisation of the postal market following the vote in the Plenary of the European Parliament yesterday in Strasbourg. MEPs rejected the Commission’s proposal of 2009 as the deadline for removing the remaining “reserved area” (i.e. monopoly by the national postal operator, which is now for letters of 50 grams or less) and opted for market opening by 31 December 2010, with an exemption for the new Member States and Member States with a “difficult topography” who can liberalise their markets by 31 December 2012.

The European Parliament’s Plenary has also adopted some amendments that confirm a more user oriented focus for the European postal sector. The Postal Users Group is particularly happy with the proposal for a reimbursement scheme for stolen, damaged or lost postal items by the Member States and the guarantee of affordable postal services, as well as the increased transparency and efficiency of the European postal sector, which will be of benefit to the users of postal services in Europe – both consumers and businesses.

Throughout PUG has stressed the need for the Public Postal Operators (PPOs) to focus on user needs – such as small and large publishers, e-commerce providers and direct marketers – to achieve the full potential of the sector. This is a message that PPOs working in liberalised – or soon to be liberalised – markets have take to heart, and are working with users to launch innovative new products and services that help grow mail as a viable communication with a healthy and sustainable future.

Per Mortensen, Chairman of the PUG, expressed mixed feelings about the outcome of the vote: “It’s a shame that the deadline for liberalisation has been postponed. However, I am happy that there is now a fixed date and that we, the users, can prepare for the further development of a healthy business relationship between the Posts and its customers. Users will enjoy the full potential of a liberalised postal sector and the efficiency and innovation that comes with it”.

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European postal operators take stock of Parliament’s improvements

12 European postal operators take stock of the European Parliament’s improvements brought to the proposal for a third postal directive.

The European Parliament has adopted, with a broad majority, amendments bringing significant changes to the initial proposal of the Commission.

Taking into consideration the great uncertainty of universal service financing and the risks of social dumping, the European Parliament has proposed substantial improvements on these two points and asks for the postponement of the date of realisation of the Internal Market in order to cope with them. The repeated reference to the economic role of universal postal services as well as to their contribution to the territorial and social cohesion is to be welcomed. It recalls one of the original objectives of the Community postal policy, thus balancing the liberalisation process.

However, the postal operators from Austria, Belgium, Cyprus, France, Greece, Hungary, Italy, Latvia, Luxembourg, Malta, Poland and Slovakia want to stress that the postponement alone does not address the many legal, economic and technical questions which remain as acute as ever.

It is therefore extremely important to deepen the discussions on those points.

As a consequence, the signatories call the Council to follow the cautious approach adopted by the European Parliament and to enrich the directive proposal by addressing the remaining issues in order to properly manage the next liberalisation steps.

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FedEx fails to clinch Safexpress deal

Federal Express’ attempt to enter the domestic logistics business have received a setback with the failure of its attempt to buy out SafeExpress, one of the largest Indian logistics company.

This deal could have been significant for FedEx Express, because its competitors, DHL and TNT, have been successful in entering the domestic logistics segment in India through strategic acqusitions. TNT acquired Speedage, a divison of ARC India, in 2006 for an amount of Rs 200 crore (GBP 2.46 million), while DHL had acquired 81.03 pct of Blue Dart in 2004 for an amount of Rs 730 crore (GBP 8.97 million).

Had the deal gone through, it would have given FedEx a fairly huge chunk of the market in the express cargo, 3PL and warehousing segment.

The opportunity for integrated solutions in the logistics industry is huge and FedEx Express, the world’s largest express distribution company did not want to miss it. A proposed Central Sales Tax (CST) phase out, investments in infrastructure and technology as well as pick up in manufacturing outsourcing have been driving the demand for logistics solutions in India.

Something had to give. So, in a final meeting, held at one of the banker’s place, a couple of weeks back, FedEx walked away from the deal. Ernst & Young were the bankers of Safexpress, while FedEx was represented by JP Morgan. The anxiety in the minds of top officials with respect to Mr Jain’s inability to take a standing decision on the matter has been building up for a while now. The employees were not sure of their fate in the course of change in ownership.

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Botswana: A Case for Co-Operation between Banks And Botswanapost

A recent book on banking in Botswana identifies post offices as a potential tool for increasing the banking footprint throughout the country.

“Enhancing Access To Banking and Financial Services” is written by Keith Jefferis. In it, the former Deputy Governor of the Bank of Botswana (BoB) says the relationship between the Botswana Savings Bank (BSB) and BotswanaPost offers great potential to spread banking services more widely.

“Whereas bank branches cover only 45 percent of the population, the existing network of post offices covers a significantly higher proportion of the population (65 percent) than the bank branches and therefore potentially provides a way of improving access to the rural and unbanked population,” the book says.

According to the BotswanaPost website, it has a network of 114 post offices and 75 postal agencies countrywide which are divided into 3 regions, namely, Central, North and South.

Jefferis says worldwide experience shows that providing banking services through the post office network is a viable low-cost option.

He makes a good case for the cultivation of relations between banking components of Botswana’s financial sector and postal services, saying there are strong arguments for ownership linkages between the two.

However, Jefferis raises a concern that neither savings banks nor postal services are run well and that making them effective would require reforms.

Jefferis’ book comes at a time when Botswana’s commercial banks are looking at rural areas for growth opportunities.

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Itella to buy the Swedish Logistics Company PS Logistics AB

Itella is to buy the Swedish logistics company PS Logistics AB. The turnover of the company, located in Borås, is around SEK 80 million. It has 22 employees, whose positions won’t be affected by this deal. The vendor is a holding company owned by the company’s Managing Director Stefan Pettersson and Transekspedicija of Lithuania.

PS Logistics AB provides freight warehousing, storage and contract logistics services. The deal will strengthen the position of Itella Logistics AB in Sweden, particularly in freight bound for the Baltic States and Eastern Europe. The operations of Itella Logistics in Sweden will also be expanded to cover contract logistics.

“The home market of Itella Logistics covers the Baltic area, where we are currently one of the leading logistics companies. Buying PS Logistics will improve our market position in Sweden by strengthening our current business and by introducing new business areas. At the same time, we will strengthen our Baltic operations,” states Joni Sundelin, Vice President, Itella Logistics.

The company will transfer to the ownership of Itella Logistics on 1 August 2007.

In Sweden, the Itella Group currently comprises the transport and freight forwarding company Itella Logistics AB and the information logistics company Itella Information AB.

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Installation of new automated postal machines delayed

The Postal Service is delaying the second stage of installing automated postal centers in lobbies.

Spokesman Gerry McKiernan confirmed the delay Wednesday, saying the agency is studying why some of its already installed automated centers did not perform up to expectations.

About 2,500 automated postal centers have been located in post offices across the country. The centers allow customers to weigh letters and parcels, select the type of service needed and print out postage, using credit cards to pay.

A June report from the agency’s inspector general said that as many as half of the installed centers were not meeting minimum expectations.

McKiernan said of the 2,500 installed, 514 centers were not meeting expectations for various reasons.

As a result, he said, deployment of further centers is being delayed while the problem ones are being assessed. The agency also cited cost considerations in the delay.

McKiernan said that 145 of the underperforming centers are being relocated to other offices. In the other cases, officials are trying to determine if customers just don’t want to use the machines or need assistance getting started with them.

In some cases lobby directors are being put into service to help people begin using the automated centers.

An inspector general’s report had warned that installing the planned 3,000 phase two centers could end up causing a loss of USD 115 million over seven years, rather than the anticipated USD 243 million in income.

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FedEx Kinko's Fueling Expansion in China

FedEx Kinko’s, the world’s leading provider of document solutions and business services, opened a store in eastern China’s booming coastal city Shanghai soon after it established its flagship store in the country’s capital Beijing, said local media.

The new store, located on Nanjing Road, one of the busiest commercial areas of Shanghai, will provide 24-hour-long high-quality express and printing services to both individuals and business customers. Besides ordinary business and print services, the company will handle international express shipping services.

FedEx Kinko’s, founded in 1970 and purchased by FedEx Corp. in February 2004, has opened more than 1600 stores in 11 countries worldwide.

The company, which entered into China as early as 1997, has opened 15 stores in key Chinese cities such as Beijing, Shenzhen, Guangzhou and Shanghai.

FedEx Corp., the world’s leading provider of document solutions and business services, wins its long-standing reputation in the world for its fast-speed and efficient services.

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Automated postal centres put on hold

The Postal Service is delaying the second stage of installing automated postal centres in lobbies.

About 2,500 automated postal centres have been located in post offices across the country. The centres allow customers to weigh letters and parcels, select the type of service needed and print out postage, using credit cards to pay.

McKiernan said of the 2,500 installed, 514 centres were not meeting expectations for various reasons.

McKiernan said that 145 of the underperforming centres are being relocated to other offices. In the other cases, officials are trying to determine if customers just don‘t want to use the machines or need assistance getting started with them.

An inspector general‘s report had warned that installing the planned 3,000 phase two centres could end up causing a loss of USD 115 million over seven years, rather than the anticipated USD 243 million in income.

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