Year: 2005

Spend and deliver: UPS acquisition of Overnite

Posted by | May 17, 2005 | |

Even UPS has its gaps. The world’s largest package delivery company plugged an obvious one with yesterday’s acquisition of Overnite. The deal takes UPS into less-than-truckload freight services in the US for the first time, after several years watching the success of rival FedEx in that area. Overnite is no steal for UPS. The delivery group is paying a 46 per cent premium, while giving no guidance on the synergies available to justify such a chunky uplift. There should be some. UPS will be able to squeeze some benefits from having a ground freight network to link with the air freight operations of Menlo Forwarding. From the customer perspective, UPS will be able to offer a more complete set of products. Having filled an obvious gap in the US, UPS could turn its attention to faster growing international markets for its next move. Exel, the UK-based logistics group with a strong international presence, would, for example, be a bigger bite. Investors should not underestimate UPS’s appetite.

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DHL named best express operator and best 3PL at the 2005 Asian Freight & Supply Chain Awards

Posted by | May 17, 2005 | |

At the prestigious 2005 Asian Freight & Supply Chain Awards (AFSCA) yesterday evening in Hong Kong, DHL was named Best Express Operator for the 19th consecutive year, reflecting the company’s market leadership and service excellence in air express offerings in Asia Pacific. DHL also clinched the Best 3PL accolade for the first time, in recognition of DHL’s expertise in supply chain management. Both awards underscore DHL’s leadership and ability to offer the full suite of express and supply chain solutions from a single source. “We are extremely honoured to receive these accolades,” said Scott Price, Chief Executive Officer, DHL Express Asia Pacific. “The awards represent our customers’ vote of confidence in DHL. Over the last few years, we have put in place a carefully thought-out strategy building on our infrastructure investments, domestic acquisitions, network coverage; and the development of innovative express delivery solutions in response to a changing marketplace.”

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USPS continues to report volume gains

Posted by | May 16, 2005 | |

Jim Cochrane, Manager of Package Services for the USPS stated at Bear Stearns Transport Conference that volume growth within its Priority and Express Mail, and Parcel Post producs (all of which compete with UPS, FedEx and DHL Amercias products) continues to trend positive. The USPS had learned its lesson from taking too large rate increases too close together when it raised Priority Mail prices by 30% in two years in 2001-2002. After shrinking for three years, Priority Mail and Parcel Post grew 2.8% (including 5.5% in March) and 8.4% last quarter.

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Correos de Chile focusing on packages

Posted by | May 16, 2005 | |

The Chilean mail service Correos de Chile had in 1998 a turnover of 350mil letters that dropped dramatically to 70mil letters per day in 2004, and is focusing in packages says president Eduardo Moyado. Regarding letters it would concentrate in express letters or delivered certified letters. Currently packages represent 14percent of Correos overall sales of Pesos$1,586mil in 2004 (Pesos$999mil in 2003), a percent to enlarge to 25percent by 2008.

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Royal mail chairman defends Crozier’s GBP3m windfall

Posted by | May 16, 2005 | |

Allan Leighton, the chairman of Royal Mail, launched a stout defence of the bonuses being paid to top managers at the postal service yesterday as it emerged that Adam Crozier, the former Football Association head who took over as Royal Mail’s chief executive, has been awarded a windfall of almost pounds 3m.

The payment is believed to be the largest made to someone running a state-owned entity.

Details of Mr Crozier’s pay are due to be published this week alongside Royal Mail’s end of year figures, which are expected to show a huge jump in profitability, with operating profits up from pounds 220m to more than pounds 500m during the past 12 months.

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Otto Gruppe to open up distribution network to external customers

Posted by | May 16, 2005 | |

German mail order company Otto Gruppe is planning to open up its distribution network to external customers, according to a report in German daily Die Welt to be published tomorrow, citing unidentified sources.

Otto, which has been using its seven distribution centres and warehouses for the company’s own distribution needs, wants to offer its services to external customers in a bid to counteract falling sales at its German mail order business, which dropped around 5 pct last year, and to compete with rivals such as Deutsche Post AG’s DHL unit, the newspaper said.

The company is currently developing a plan on how to open up its business, with a final decision expected by mid-July, it said.

Otto Gruppe declined to comment, Die Welt added.

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Push to partly privatise the UK postal service

Posted by | May 16, 2005 | |

Allan Leighton, Royal Mail chairman, will push for a meeting with ministers this week to discuss a John Lewis-style partial privatisation of the state-owned postal operator in which staff would gain a stake.

The plan is for Royal Mail to borrow an extra GBP 2 billion against its balance sheet. Part of the cash would be used to buy a slice of the government’s 100 per cent shareholding held on behalf of staff in an employee share ownership trust. A further section of the capital would be allocated to address the GBP 2.5 billion pension deficit.

Royal Mail is set to report record results tomorrow with annual operating profits in excess of GBP 500 million, compared with GBP 220 million 12 months ago, and a significantly improved delivery performance.

This is well ahead of previous estimates and will enable Royal Mail to pay each of its 195,000 postal staff and other employees a bonus of more than GBP 1,000.

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DX Services breaks UK Royal Mail’s pillar box monopoly

Posted by | May 16, 2005 | |

Royal Mail’s 150-year monopoly on pillar box deliveries is to be broken by a new rival in the partially deregulated postal market.

DX Services, the only other UK postal business to run an end-to-end delivery network, has installed blue pillar boxes to take business-to-business letters and packages in 96 outlets of retailer Mail Boxes Etc.

Items posted in the boxes will be delivered to company addresses overnight, with the option of bar-code tracking and a customer signature on delivery.

However, customers will only be able to post items during office hours since the DX pillar boxes will remain inside the Mail Boxes Etc outlets.

Peter Brougham, DX chief executive, said his company’s new service would offer small to medium-sized companies “a real alternative” to the existing postal service.

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