Year: 2005

Parcel giants bid for Royal Mail’s Euro arm

Royal Mail is under intense pressure from the Treasury to sell its successful European parcels business, GLS, as well as billions of pounds worth of property. Ministers and officials have told Allan Leighton, Royal Mail’s chairman, that the company must raise cash to help fill the pounds 4bn hole in its pension fund. “There is no way that we can simply write a cheque for billions to sort out the pension fund when the company is sitting on assets worth a fortune,” said a government member. Leighton has received approaches from the world’s largest logistics businesses, FedEx, UPS and TNT, all of which want to buy GLS. “We could sell it tomorrow,” said an executive close to Royal Mail. Leighton is determined to retain GLS. He believes Royal Mail’s future prosperity relies to an extent on its ownership of an unregulated, international business such as GLS.

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Protests at secrecy over UK Royal Mail findings

Alan Johnson, the trade and industry secretary, is to keep secret the findings of an independent expert advising the government on Royal Mail’s future, a move that yesterday sparked cross-party protests ahead of a decision on the postal operator’s ownership. The Department of Trade and Industry has ruled out making public any of the advice provided by Sir George Bain, whose work was commissioned by Mr Johnson in the summer. The decision, revealed in a written parliamentary answer this week, has prompted immediate calls for Sir George’s findings to be published alongside a government decision ex-pected within months on plans by Royal Mail’s management for an employee share giveaway.
There is growing concern among Labour backbenchers and trade unions that ministers could renege on a manifesto policy to keep the Royal Mail in “public hands” by agreeing to a proposal from Allan Leighton, chairman, to give employees tradeable shares in the business.

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Business Is flourishing for Portuguese Post CTT

The state owned Portuguese mail service provider CTT Correios de Portugal would like to generate sales of EUR 175 million in the express mail sector in 2006, according to its president Luis Nazare. CTT took over the Spanish CEP company Tourline Express about a year ago.

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Posten Interim Report January-September 2005

Net sales totaled SEK 18,285m (18,215)
– Operating earnings totaled SEK 942m (784). Last year’s operating earnings included capital
gains of SEK 206m
– After-tax earnings totaled SEK 939m (884). Last year’s figure included a positive tax effect of
SEK 163m resulting from an accounting change
– Equity-assets ratio was 30 percent (24)
– Cash flows from operating activities totaled SEK 1,023m (557)

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Irish An Post staff accused of sabotage in bid to turn public against company

Postal workers are waging a campaign of sabotage and disruption against An Post, it was claimed last night. The company said that the aim was to ratchet up the pressure ahead of threatened industrial action next week over An Post’s refusal to implement an agreed pay increase. In the past month alone An Post has logged more than 30 incidents of what it believes are deliberate attempts to delay mail services in order to get the public “off side” with An Post by presenting it as being unable to run an efficient service. He cited experienced drivers “getting lost” on their way to mail centres in Dublin, Cork, Portlaoise and Athlone. Communications Workers’ Union general secretary Steve Fitzpatrick said that if allegations that his members had wilfully delayed mail were substantiated, he would not defend them. However, he said that his union had been accused of intimidation, fraud and now sabotage and “there was not one shred of evidence the CWU was behind this”.

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Irish An Post needs to address the onset of competition

An Post requires radical restructuring, new work practices and greater volumes of mail rather than higher prices. With full market liberalisation around the corner, An Post is undoubtedly under pressure and the pending strike by the Communications Workers Union (CWU) is adding significantly to its woes. The union’s refusal to implement the Labour Court’s recommendations is indicative of the problems that the company faces. Its survival depends on both unions and management adapting to the new competitive environment that looms. The payroll bills at An Post account for 64 per cent of its operating costs and inefficient work practices are damaging the company’s competitiveness.

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Belgravium in new sector thanks to UK postal contract

Belgravium Technologies, the company that makes hand-held systems which track goods through the supply chain, has won a new contract to supply hand-held units to TNT Mail. TNT hopes the deal will help it to secure the number two slot behind Royal Mail in the UK postal market. TNT will use the hand- held units to assist the sorting out of the mail. TNT said the units will provide real-time data capture to TNT’s warehouse operations.

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FedEx big day could be record

FedEx expects its busiest day in company history will be Dec. 12 when an anticipated avalanche of 8.5 million packages – 400,000 more than last year’s busiest day – will be headed to doorsteps around the world through FedEx Express and FedEx Ground. FedEx typically handles 6 million packages a day.

“Economic growth continues on a healthy and sustainable pace with recent indicators suggesting that the holiday season will be solid,” said FedEx economist Gene Huang. “Improving trends in merchandise sales, business orders, the services sector and employment in the United States remain in place, and this bodes well for holiday sales.”

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