Tag: Europe

GLS plans Spanish acquisitions worth about 250 mln Eur in total

Posted by | Apr 3, 2007 | |

Royal Mail Group PLC’s unit General Logistics Systems (GLS), formerly German Parcel, is planning to expand into the Spanish market through acquisitions and has about 250 mln Eur to spend, chief executive Rico Back told newspaper Die Welt.

‘We are in takeover talks in Spain and are planning to complete those in the coming two months,’ he said.

The company plans to further expand its operations into Romania and the Baltic states, the report added.

GLS is currently the third-largest parcel service in Europe.

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TNT Post to freeze wages and cut up to 7,000 jobs

Posted by | Apr 3, 2007 | |

TNT will seek to freeze wages and cut up to 7,000 jobs to help lower costs by 300 million euros (USD 400 million) as its remaining monopoly is opened to competition next year.

The dominant Dutch mail company, whose business is already under attack from rivals Sandd and Deutsche Post’s Selekt Mail, did not rule out forced redundancies on Tuesday.

Dutch mail unit TNT Post, one of the country’s biggest employers with 59,000 people, has steadily lost mail volume to competitors and as a result of the popularity of email, online banking and government initiatives such as electronic tax filing.

“Less post means less work,” Harry Koorstra, TNT board member responsible for the mail business, told Dutch news radio BNR, adding the company expected to lose another 30 percent of Dutch mail volume in coming years.

TNT said in December that it aimed to cut costs in its mail division by 300 million euros by 2015. It did not specify what provisions it will take in implementing the cost savings.

The company is also seeking to compensate for shrinking mail volumes at home by growing abroad and expects to benefit from the liberalisation of the European mail market, due by 2009 according to European Commission plans.

TNT still has a monpoly on mail weighing up to 50 grammes, representing about half of the overall mail market, which the Dutch government plans to scrap from 2008.

“Some 65 percent of the cost of delivering post consists of labor, and precisely the factor labor is no longer in step with the market,” Koorstra said, adding competitors paid 7 euros-to-9 euros an hour while a mailman cost 22 euros-to-24 euros.

TNT said it would also seek to change other employment terms, such as making employees pay pension contributions, which currently was not the case.

Without changes to employment terms, some 11,000 employees would have to lose their jobs between 2007 and 2010, TNT said.

Due to a large number of part-time workers in mail delivery, the expected 6,500 to 7,000 job cuts are equivalent to about 4,500 full-time jobs, Koorstra said.

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Royal Mail's zonal pricing proposals under fire

Posted by | Apr 3, 2007 | |

Royal Mail’s proposals to introduce a more competitive pricing system have been attacked by mail users and postal operators after the industry regulator launched an inquiry.

The state-owned operator wants to introduce a pricing structure for bulk mail to enable it to charge different amounts depending on the destination. This, it says, would help it to cope with mounting competition from private sector operators.

The proposals would mean charging 2.5 per cent more for sending mail to anywhere in Greater London, where costs are 12 per cent higher than the national average. Mail to business districts costs 28 per cent less than average to deliver and Royal Mail is proposing to cut charges 4.9 per cent.

There was anger over the request to charge more for delivering bulk mail inside the M25, which Royal Mail said was necessary to cover higher salaries and the cost of handling congestion.

Alan Halfacre of the Mail Users’ Association said the former monopoly had failed to raise its efficiency in the capital to the level elsewhere in the country.

In its first proposals on zonal pricing, submitted nine months ago, Royal Mail had proposed a 1.7 per cent cut in charges for delivery in the capital. Now it wanted to charge 2.5 per cent more, 4.2 per cent than it had initially proposed – with even larger rises for people living outside built-up areas.

“These increases will en-courage banks, insurers and utilities to move customer billing online. Royal Mail is making itself a problem.”

Royal Mail said its proposals would be cost-neutral, with higher charges in some areas matched by lower prices elsewhere. The cost of sending two-thirds of the mail involved would fall.

But competitors said the move was an attempt to protect the former monopoly from competition by reducing its charges in areas where they could win business.

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TNT Post provides more clarity on effects of cost-saving initiatives

Posted by | Apr 3, 2007 | |

TNT Post provided more clarity to its employees of the effect on jobs of the measures the company will be taking to safeguard its success in the longer term in a postal market that is experiencing declining volumes and increasing competition. The company hopes that it can avoid large-scale involuntary redundancies by complementing its operational efficiency measures with changes to employment conditions and benefits to bring these in line with the market.

TNT Post does not believe that operational efficiency measures alone will be sufficient to achieve the cost savings of 300 million euros that were announced on 4 December 2006. This would result in 11,000 employees losing their jobs between 2007 and 2010. Because natural attrition and job mobility programmes would be insufficient to absorb this level of job loss, large-scale involuntary redundancies would be the inevitable result. TNT Post does not see this as socially preferable.

TNT Post has opted for an alternative in which operational efficiency measures will be combined with changes to the employment package and additional incentives to encourage employees to leave the company.

In this approach, employee wages will be, at best, frozen at the present level for the next two and a half years. In addition, other conditions of employment will have to be brought more in line with the market. With these measures the company believes it can limit the loss to between 6,500 and 7,000 jobs, most of which can be absorbed by natural attrition and assisted reemployment. TNT Post emphasises however that unfortunately it may not be possible to avoid involuntary redundancies.

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