Tag: FedEx

FedEx downshifts

Posted by | Aug 6, 2008 | |

While harboring hopes the U.S. economy will turn around and fuel prices will start to level off, FedEx is positioning itself for what company officials say is an altered industry landscape.

Frederick W. Smith, FedEx chairman, president and chief executive officer, said in the wake of the company’s first quarterly loss in several years that FedEx is rethinking its foundation express operations and even the way it gears up for international traffic.

“FedEx Express has not bought a unit of capacity for the domestic express business in years and years and years,” Smith told investment analysts in a conference call on the company’s earnings.

Instead, Smith said, is looking at a new era of air shipping that includes still lighter reliance on aircraft for shorter hauls and a focus on fitting the domestic network into a global supply chain.

That is where increasingly savvy customers, he said, are cutting back on premium services and streamlining.

“The network in the United States has been expanded basically to move inland international traffic,” Smith said. “Increasingly in the international market the movement of goods by air will be in smaller lots and door-to-door express movements rather than in the large consolidations that marked the industry structure several years ago.”

FedEx has benefited from the broad industry trends in recent years, gaining express parcel business as shippers have broken down larger consignments and taking on ground package and trucking volume in its growing surface divisions as cost-conscious shippers have traded down in mode.

But domestic express volume has been flat at best in recent years and now Smith acknowledges that the ideal target for air express is the international shipper rather than the domestic business.

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FedEx Services named one of PINK magazine’s top companies for women

Posted by | Aug 6, 2008 | |

PINK magazine announced that FedEx Services is among the 13 companies honored on its second annual list of the Top Companies for Women, as featured in the magazine’s September issue.

FedEx Services also placed on last year’s list.

PINK solicited nominations from America’s leading companies before narrowing the field based on responses to nearly 100 questions and data points related to women’s advancement. Among the criteria the magazine evaluated:

• Power – the number of women in board seats and C-suites, and with P&L responsibility;
• Pipeline – leadership training, mentoring and coaching programs designed to retain and advance talented women;
• Pay – evidence of pay equity, including the percentage of women in the top fifth of payroll.

“These companies are true leaders in the advancement of women,” says PINK’s Founding Editor, Cynthia Good. “While each of them has plenty of room for improvement, they all realize that moving women to the top goes beyond issues like maternity leave and flextime. It’s also about giving women real authority to change the corporation and achieve their career dreams.”

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TNT rises to five-month high on speculation about takeover bid

Posted by | Aug 6, 2008 | |

TNT NV rose to its highest in five months in Amsterdam trading on speculation of a takeover offer.

TNT rose as much as 2.48 euros, or 10 percent to 26.41 euros, the highest since Feb. 27. The stock was up 3.8 percent at 11:26 a.m. local time.

“There are rumors about a takeover bid” of 30.25 euros per share being made “soon,” said Rik Zwaneveld, a trader at AFS Brokers BV in Amsterdam, adding that possible interested parties weren’t mentioned.

TNT rose 26 percent on July 14 on a Financial Times report that FedEx Corp., the second-largest U.S. package-shipping company, was in preliminary talks to buy TNT. The stock tumbled 16 percent on July 24 after the Wall Street Journal said FedEx won’t make an offer.

Pieter Schaffels, spokesman for Hoofddorp, Netherlands- based TNT, declined to comment.

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DHL says China revenue growth slows

Posted by | Aug 5, 2008 | |

DHL has seen revenue growth at its China business slow to around 15 percent during the first seven months of the year from a recent average of over 20 percent, an executive said.

Dan McHugh, Chief Executive of DHL Express Asia Pacific, attributed the slowdown primarily to a decline in shipments abroad over the past 12 to 18 months as U.S. and European demand in particular has dwindled.

DHL has enjoyed 20-23 percent annual growth in China over the last five years.

China’s exports have been hit by a stronger currency and weaker overseas demand. Export growth slowed to 17.6 percent in June, compared with a year earlier, from 25.7 percent in all of 2007.

McHugh declined to comment on how much revenue DHL earned in China, but he said it accounted for a significant chunk of its Asia-Pacific business.

He said it was difficult to say whether the Olympics would be a net positive or negative for revenue.

The Chinese government has put in place a number of restrictions to ensure security at the Olympics and curb air pollution in Beijing, including banning some items from being shipped nationwide, more customs inspections and curbs on vehicles entering the capital.

That has created new hurdles for DHL and rivals such as FedEx Corp and United Parcel Service Inc.

McHugh said the measures were not having a “material” impact on DHL’s China business.

But he said the company was spending about usd 2 million to deal with them, including increasing its fleet around Beijing and buying extra X-ray machines and hiring more staff to facilitate customs inspections.

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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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