Tag: DHL

Deutsche Post cancels HP outsourcing deal

Posted by | Aug 1, 2008 | |

Deutsche Post World Net has backed out of a planned IT outsourcing megadeal with Hewlett-Packard worth billions of dollars, InformationWeek has learned.

Deutsche Post, the German logistics company and parent to DHL, chose not to finalize the contract after a six-month review found the “benefits, particularly in the early years, do not outweigh the risks,” according to an internal memo.

The dropped outsourcing deal called for HP to hire 2,500 Deutsche Post employees, including those working for DHL. It included taking over the operations and management of data, infrastructure, networks, and software running in data centers in Scottsdale, Ariz.; Prague, the Czech Republic; Malaysia; and other regions.

Although the companies didn’t make the contract size public in January, when they announced the signing of a letter of intent, they said Deutsche Post would save at least 1 billion euros over seven years by outsourcing IT and expected to reach a “definitive agreement” with HP by the middle of 2008.

In a July 21 e-mail to employees, Stephen McGuckin, IT Services Managing Director at Deutsche Post, wrote that the deal had fallen through partly because it wasn’t going to bring Deutsche Post the expected savings.

During the past six months, “both companies have learnt much about the challenges, risks and benefits of the proposed outsourcing. More significantly [Deutsche Post] IT Services continued to improve its cost position, increased the number of services delivered while also maintaining service levels. Simply put, during the six months of the evaluation, our improving cost position made HP’s job that much harder and their cost reduction target that much more difficult to achieve.”

McGuckin added that the decision is “not a reflection of HP’s merits as a service provider; it is a vote of confidence in [Deutsche Post] IT Services and our track record of service delivery.”

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Financial investor bids over EUR 500m for Seur controlling stake

Posted by | Aug 1, 2008 | |

British private equity company Doughty Hanson has bid more than EUR 500 million to buy a 52 pct majority stake in Spanish express parcels operator Seur in an offer valuing the company at about EUR 1 billion. DHL and UPS were apparently also interested in the company.
According to Spanish business newspaper Expansión, the UK financial investor has made the offer to a group of Seur franchisees who have decided to sell off their shareholdings in the group. The offer, valuing the whole company at EUR 1 billion, is thus worth about EUR 520 million.
Expansión, citing market sources, described the bid as “friendly” and said that Doughty Hanson was ready to work with other Seur shareholders, including La Poste subsidiary GeoPost, which owns a 19.6 pct share in the group.
The other Seur shareholders now have 45 days to decide whether to exercise their right to block the bid with a counter-offer of at least the same size, the newspaper wrote. Sources close to La Poste said that no decision has yet been taken about this, it added.
Seur, with revenues of EUR 665 million last year, has a complex, decentralised ownership structure comprising regional franchisees who also own small stakes in the parent company Seur SA. Seur has 85 franchisees in total controlled by 54 companies. The franchisees seeking to sell their holdings represent 52 pct of Seur capital, 65 pct of the franchises by number, and generate 5 pct of gross profits, according to the newspaper.

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Postal Service wants limits on its universal service obligation (U.S)

Posted by | Jul 31, 2008 | |

The U.S. Postal Service wants to exempt its competitive products (like Priority Mail and package services) from the universal service obligation. Doing so would allow it to cut back on offerings in sparsely populated areas where business is thin.

The Postal Service argues that those services shouldn’t be treated differently than those of competitors such as FedEx, DHL and UPS. An exemption would allow the Postal Service to choose which competitive products it offers in a given market, and what standards of service to apply. Products covered by the universal service obligation such as first-class mail, must be offered in a uniform fashion across the country.
But even if the agency gets approval from Congress to exempt those competitive services from universal service, an international treaty would create a paradox: The Postal Service would still be required to deliver mail and packages coming into the United States from overseas, even if it doesn’t offer the products in a given market.

The Postal Service made its request for the exemption in a lengthy set of comments submitted to the Postal Regulatory Commission last week. PRC has also solicited public comment on the universal service obligation; the commission will submit a final report to Congress in December.

Under the 2006 Postal Accountability and Enhancement Act, postal products were divided into two categories: market-dominant and competitive. Products in the former group (like first-class mail) are covered by the universal service obligation because the Postal Service has a monopoly over their delivery. But the latter group competes with products offered by commercial shippers like UPS and FedEx.

An exemption for the competitive products would be just one step toward restoring profitability at the financially troubled Postal Service. The agency posted a USD 706 million loss in the second quarter of 2008; decreasing mail volume and increasing fuel costs have squeezed its bottom line. And, the Postal Service can’t rely on market-dominant products to reverse that trend: Price increases for those products are capped at the rate of inflation.

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Deutsche Post unfazed by US presidential candidate concern over DHL cuts

Posted by | Jul 31, 2008 | |

Deutsche Post World Net (DPWN) shook off criticism by US presidential candidates Barack Obama and John McCain of the planned closure of DHL’s air hub at Wilmington, Ohio, and stressed it is on track with the US restructuring measures.

On Tuesday (29th July), Obama and McCain both took up the issue of the planned Wilmington closure, with the expected loss of some 8,000 jobs at DHL and sub-contractors ABX Air and Astar Air Cargo. They each called for an investigation into potential anti-trust issues resulting from the planned DHL-UPS airlift deal, and spoke out in favour of government support for workers who lost their jobs.

Speaking at company press conference on its half-year financial results, DPWN CEO Frank Appel said he was “sorry” about the job losses at Wilmington but stressed the cuts were necessary in view of the likely USD 1.3 billion loss at DHL Express USA this year and to strengthen DPWN as a whole. “If we did not do this, then we would endanger even more jobs,” he declared.

In response to questions, Appel said DPWN had held talks with various US officials for some time and commented that the statements of the two presidential candidates were “moderate” and showed they understood DHL’s problems.

Due to DHL’s heavy US losses, the situation was not comparable with that of Nokia, which was forced to pay back subsidies in Germany after announcing the closure of a production site, he said. DHL Express had received “low” subsidies at Wilmington but did not expect to have to pay them back.

Appel also stressed that the measures to restructure DHL Express USA were on track despite deteriorating market conditions and the weakening US economic environment. The first DHL-contracted aircraft had been taken out of service, the first DHL ground stations closed and other cost reduction measures had been implemented, he said.

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Blue Dart Profit 206.69 million up by 19.94 pct

Posted by | Jul 31, 2008 | |

Blue Dart Express Limited declared its financial results for the quarter and half year ended June 30, 2008 at their Board Meeting held in the city.

Profit after tax for the 2nd quarter ended June 30, 2008 was Rs 206.69 million, an increase of 19.94 pct over the corresponding period of the previous year. Income from operations for the 1st half ended June 30, 2008 was Rs 4,842.86 million, an increase of 31.19 pct over the corresponding period of the previous year.

With the reinforcement of its ground express product ‘Dart Surfaceline’ last year, Blue Dart has now expanded its reach to over 20,955 locations across the country. Pioneers in India’s air express segment, Blue Dart today operates six air freighters, across 62 air routes with a payload capacity of 300 tonnes per night.

1 INR = 0.0237638 USD

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