Year: 2008

DHL considers U.S. future

Posted by | Jan 16, 2008 | |

Deutsche Post will likely unveil plans for its problem-plagued DHL business in the United States on March 6, say analysts.

When the German parent company releases its earnings report, losses are expected for the express unit which lags behind UPS and FedEx in the U.S. market.

In December, Bear Stearns called for the German parent company to “back away from U.S. domestic express.” In last month’s report, Bear Stearns analyst Andrew Beh called on Deutsche Post management to “reconsider its strategy to become a global express operation offering international and domestic service in all major markets under an integrated brand and service umbrella.”

This month another investment analyst, Morgan Stanley, also made a rare direct call for a DHL pull out, saying Deutsche Post needed to make the move in order to make its own financial projections.

Deutsche Post and DHL say they remain committed to their U.S. operations.

“The U.S. is an important market in our commitment to offer a truly global service network,” DHL said in a statement. “As the world’s leading Express and Logistics company, the U.S. is strategically important to the Group both as a stand-alone market and as a high-performance extension of our global service platform.”

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DHL Ireland profits plunged 200pc in 2006

Posted by | Jan 16, 2008 | |

The Irish wing of distribution giant DHL endured a profit fall of more than 200pc in 2006, despite a marginal increase in turnover to EUR 163m.
Figures just filed with the Companies Office show the earnings plunge was largely linked to exceptional costs, including EUR 1.354m for redundancy and relocation costs.
Those costs were linked to DHL’s 2007 move to a new distribution centre in north Dublin.
One of Ireland’s largest private distributors, DHL employed 795 people at the end of 2006, down from 843 the previous year.
The company achieved sales of EUR 163m for the year, up from 2005’s result of EUR 157m. Operating profit, however, tumbled from EUR 5.417m in 2005 to EUR 2.885m in 2006, on foot of higher costs.
A higher interest and tax bill put further pressure on the company’s bottom line, which ultimately delivered profits of EUR 1.16m for the year, down from EUR 4.468m the previous year.
The company’s directors noted the year’s performance was “in line with expectations and in line with overall performance of the Irish market”.
The accounts also detail a EUR 20.2m loan which was advanced to DHL in 2006 by ultimate parent company Deutsche Post AG, and a EUR 559,000 pension refund which will be treated in the 2007 filings.
During the year, the company’s four directors saw their own remuneration drop by more than 18pc to EUR 346,000, while average staff costs rose by about EUR 1,500 to EUR 47,500.
DHL Ireland closed the year with equity shareholders funds of EUR 12.1m, up from EUR 10.3m in 2005, and retained profits of more than EUR 10m.

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US Postal Service needs more autonomy

Posted by | Jan 16, 2008 | |

The U.S. Postal Service is hurt more than it is helped by its status as a government entity, the Federal Trade Commission said in a study released on Wednesday.
Federal constraints, such as restrictions on the postal service’s ability to manage its labor force and configure its network, increase its costs by an estimated USD 330 million to USD 782 million a year, the FTC found.
The FTC report recommended that Congress reduce constraints on the postal service, narrow the scope of its monopoly, and make the postal service’s competitive products division a separate corporate entity.
The service does enjoy a monopoly on the delivery of items such as personal letters, bills and advertisements.
The postal service also benefits from being exempt from certain state and local requirements such as taxes and licensing, it said. The FTC estimated the value of these implicit subsidies range from USD 39 million to USD 117 million a year for the postal service’s competitive products operations.
Overall, the FTC said the postal service’s government- related benefits and restrictions hurt the entire competitive mail industry by distorting the market.
Legal constraints cause the postal service to use more resources to create its products, but the higher costs are partially masked from consumers by the service’s legal advantages.
These distortions mean more resources are used to produce the current volume of mail products than is necessary.
The postal service, which handled 212 billion pieces of mail and earned nearly USD 75 billion in fiscal 2007, has struggled in recent years because of increased competition from commercial rivals such as FedEx Corp and United Parcel Service Inc and because of the growing use of the Internet.

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Royal Mail offers chocolate mailpacks (UK)

Posted by | Jan 16, 2008 | |

Royal Mail is stepping up its efforts to get companies to use direct mail by creating a new personalised mailpack made entirely of chocolate.

The pack aims to demonstrate to businesses the benefits of enhancing brand communications by engaging more senses through direct mail initiatives with its own chocolate mailing.

It includes an engraved personalised message and a brochure with a heat-sensitive cover. The ‘chocolate letter’, created by Proximity London, demonstrates the sensory experience of direct mail, and also gives examples of best-practice sensory direct mail from around the world.

The campaign follows Royal Mail’s partnership with Brand Sense, the sense branding specialists, to develop a solution which will enable brand managers to connect with customers to engage three or more of the senses through direct mail.

The “chocolate letter” pack is being sent to senior marketers at 1,000 of the top UK businesses and their creative agencies. It aims to demonstrate how direct mail is more effective than any other channel in engaging all five senses by creating emotional and more profitable connections with customers.

Royal Mail head of media development Antony Miller says: “Direct mail has for a long time been typecast as a predominantly response driven marketing medium by many. So, with this campaign we really wanted to shatter this misconception and demonstrate the flexibility of the medium by showing how it can enhance brand engagement and build deep and meaningful relationships with consumers.”

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Protests as TNT breaks German pay law

Posted by | Jan 16, 2008 | |

UNI is urging affiliates to join the protests against Dutch-based post and logistics giant TNT for undermining laws in Germany to protect postal workers as the sector is de-regulated.

UNI General Secretary Philip Jennings has accused TNT of “dubious actions in Germany” in a protest to the Amsterdam-based group’s Chief Executive Peter Bakker.
Under pressure from UNI affiliate ver.di and SPD coalition partners, the German government has introduced a legally binding minimum wage for the postal sector to ensure that rival operators do not drive conditions down in a race to the bottom to win postal business.

TNT-Post Germany – a subsidiary of TNT Group – is refusing to comply with the postal minimum wage (set at up to 9.80 euro an hour) and collective agreements negotiated by ver.di, which is the established postal union in Germany

Instead of dealing with ver.di, TNT has recognised a new union with dubious credentials to cover its operation in Germany and to negotiate agreements below collective and legal minimum standards.

The move puts at risk social provisions that governments introduce and unions negotiate to protect nearly two million postal workers in Europe as de-regulation is pushed across the European Union by 2011 for most countries and by 2013 for the remaining countries.

UNI is urging Mr Bakker to comply with Germany’s minimum wage and wants affiliates to send similar calls to the TNT CEO.

The new TNT-Post Germany union has failed to win approval of a German court to be registered. The leaders of the new union come directly from the executive offices of a postal provider and its financing is clouded in mystery.

The German labour minister has expressed serious doubts about the conduct.

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Consultation Starts On Changes To Post Office Network – Post Office Ltd announces plans for Newport and Gwent Valleys

Posted by | Jan 15, 2008 | |

Post Office Ltd opened a six-week local public consultation on its Area Plan for the Newport and Gwent 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, the Area Plan proposes future provision of Post Office services through a network of 126 Post Office® branches across the Newport and Gwent Valleys area, including establishing three new innovative Outreach service points, but to close 25 existing branches. (See full list below).

Under the proposals, more than 99.6 pct of the area’s population will either see no change, or will remain within one mile (by road distance) of an alternative branch.

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 February 25, 2008.

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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Post Office UK cuts mortgate rate

Posted by | Jan 15, 2008 | |

The Post Office® today announced an interest rate cut to its three year fixed rate mortgage to 5.48 per cent – making it the best mortgage deal of its kind on the high street.

This is the second rate cut to the Post Office®’s three year fixed rate mortgage in two months, and the third since its launch in November 2007 when it offered a rate of 6.09 per cent.

The mortgage continues to carry its low fixed arrangement fee of just GBP 399 and can be taken out on up to 95 per cent of a home’s value. There is no higher lending charge or extended tie-in, giving Post Office® customers a market leading deal.

The three year fixed rate deal is part of a range of mortgages being trialled by the Post Office® in selected branches in the North of England.

Post Office® has also slashed the rates of its three year fixed buy-to-let and self-certification mortgages to 5.99 per cent.

Post Office® director of lending Gary Fitton said: “These new rate cuts put our mortgage range at the top of the comparison tables, further proving our commitment to offering customers transparent and excellent value for money products.

The mortgage trial, launched in September 2007, follows a succession of well-received financial product launches by the Post Office® which is now the fastest growing financial services provider in the UK. It has already attracted more than one million customers with its easy to understand and good value products.

Post Office® Mortgages are provided in conjunction with Bristol and West, the Bank of Ireland’s lending arm. As a responsible lender, the Post Office® applies strict lending criteria and enforces appropriate checks before an offer is made.

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USPS adopts new standards for undeliverable-as-addressed mail from abroad

Posted by | Jan 15, 2008 | |

The US Postal Service has implemented new standards to recover the cost of handling undeliverable-as-addressed items posted from abroad with a US return address. The change took place January 14.

In the past, the USPS provided the return service without charge. Now, to recover the cost of handling these mailpieces, the new regulations will allow the USPS to collect the applicable First-Class Mail International rate.

If an item has been mailed in a foreign country by or on behalf of a US resident or US-based firm, and the foreign postage rate applied to the item is less than the US domestic rate, then the USPS will have the right to collect the applicable postage.

Essentially, this is putting down in writing something that the Universal Postal Union, a specialized agency of the United Nations, put into effect in 1999, said Yvonne Yoerger, spokeswoman for USPS.

She added that, since then, it has been up to individual countries whether they wanted to follow the practice or not. In the US, for example, the practice has not been applied consistently. “We want to get a handle on how significant this is for us,” she said.

The USPS is currently collecting data on how much money it stands to save from the change, according to Obataiye B. Akinwole, USPS classification specialist. “We know that it is an issue, we’re just looking to see how big an issue it is now,” he said.

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