Tag: FedEx

U.S. Postal Service – Declining Mail Volume

Posted by | Mar 6, 2008 | |

A fight back on Junk Mail by some 18 states in the US, as well as declining mail volumes has created a GBP 1 billion deficit for the U.S. postal service.

A decline in mail volume, particularly from domestic mail users, has seen postal operators increasingly reliant on Junk Mail but with real concerns over the quantity of paper being used that stretches the recycling capability of many towns and cities, many see the Junk Mail era as a short-lived one.

The U.S. could see more post offices located in other outlets to reduce costs, a trend already being established in the UK.

Increased competition in the U.S. is also putting pressure on the U.S. postal service. Rivals such as German-based DHL, FedEx, UPS and others are all contributing to a gradual decline in profitability and the U.S. postal service is urgently looking at ways to curb spending including reduced overtime and using more part-time workers.

Steve Lawson, editor of Hellmail.co.uk said:

“Whilst the internet age has transformed the way we all communicate and do business, it has undermined the role of postal services to such an extent that few of us actually post many letters now. The problem is a global one, not made easier by deregulated postal markets and greater competition for what were once public-sector services.”

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FedEx, UPS look to gain if DHL scales back

Posted by | Mar 6, 2008 | |

Analysts expect money-losing DHL will scale back in the United States and could make the announcement as early as today, handing FedEx Corp. and UPS a boon.

If DHL closes terminals and hubs, analysts say FedEx could get 35 percent of the lost business in the air and another 25 percent on the ground.

If the restructuring costs DHL 2 percent of revenue, FedEx stands to gain USD 45 million in business, according to a research note published Wednesday by Edward Wolfe. UPS, which has a more powerful ground network, stands to realize USD 71 million.

DHL is the fourth-largest player in the U.S. overnight package business, with revenues in the Americas for 2008 estimated at USD 2.3 billion.

With 9 percent market share, DHL trails the U.S. Postal Service, (32 percent) FedEx (31 percent) and UPS (25 percent).

DHL joined the competitive U.S. overnight business in 2003 when it purchased Airborne Freight for about USD 1 billion, rankling FedEx and UPS, which accused the monopoly Deutsche Post of investing in a U.S. carrier to fight them on their own turf.

Both pressed the issue in lawsuits, which Airborne eventually won.

Airborne was the low-cost alternative to the big players, claiming about 10 percent of the domestic air express market and 2 percent on the ground.

DHL came in promising a threat to the established carriers, but in reality has kicked little sand in their faces, mostly because it has made a series of integration and operational errors that shook customer confidence.

Analysts estimate DHL has lost USD 2.8 billion in North America, including a recent USD 748 million write-down in the United States alone, where it has also announced 600 layoffs.

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FedEx opens new depot in Spain

Posted by | Mar 5, 2008 | |

FedEx has opened a new depot in Riba-roja de Túria in the region of Valencia, Spain, to expand its network and improve its service in the region, according to Spanish newspaper Transmarket.

The construction of the new facility follows an increasingly growing demand in the most important sectors of industry in Valencia including pottery, footwear, textiles and clothes.

The depot will be the operational centre of the company in the Levantine area and cover up to 14 routes in the provinces Valencia and Castellón. With the new facility, FedEx also expects to improve delivery times in some areas by up to 5 hours, Transmarket further reported.

The newly inaugurated depot is the third official operational centre of the company adding to the two facilities in Madrid, functioning as one operational unit as well as two depots Barcelona operating as one.

“There has been a growing demand from our local customers and potential clients”, said Ian Silverton, operational manager at FedEx Spain. “It was very important for us to continue providing high quality services for all our customers and FedEx business activities in this region.”

The Spanish FedEx subsidiary generated the revenues of about EUR 48 million in 2006. It employs 374 people and has a fleet of 75 delivery vehicles.

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DHL Restructuring – Wheels in Motion But Likely to Take Some Time

Posted by | Mar 5, 2008 | |

RESTRUCTURING IN THE U.S. Following the recent USD 784M write down related to its Americas Express business, 600 recently announced layoffs in the U.S., and change in DPWN’s CEO, several European and U.S. newspapers have reported that DHL could announce either the sale or restructuring of its U.S. business at its parent DPWN’s analysts meeting in Bonn on March 6th.

BACKGROUND ON DHL’S PROBLEMS IN THE U.S. DHL bought Airborne in late 2003 and over the next few years merged its existing U.S. import/export business in with Airborne’s predominantly domestic express business. However, DP has never been able to realize its expected cost synergies and has reported an estimated USD 2.8B in losses in North America over the past 4 years.

WHAT ARE DHL’S OPTIONS? For anti-trust reasons we don’t believe that either UPS or FDX could buy DHL’s N.A. assets or complete book of business. More likely DHL will seek to further stem losses by reducing its commitment in the U.S. through cost reductions/restructuring and partnerships (outsourcing some line-haul and P&D), while making it clear they intend to remain in the U.S. Look for it to reduce terminals and push more freight towards the ground.

WHAT IS THE TIMING? DHL is in a tough position because if customers believe there is even a chance it will exit the U.S., DHL’s competitive position will be compromised. Thus action needs to be swift, but DPWN tends to be contemplative and current Teamster issues likely prevent a major restructuring before April or May. At this point we expect modest restructuring efforts to be announced on March 6th with a clear indication of remaining in the U.S. and more restructuring to come.

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FedEx to expand International Economy service

Posted by | Mar 4, 2008 | |

FedEx Express announced the expansion of its customer portfolio of services with the launch of FedEx International Economy service in 10 Asia-Pacific markets, with another introduction scheduled this March for three more Asian markets -the Philippines, Indonesia and Vietnam.

FedEx International Economy is an economical, day-definite, customs-cleared, door-to-door service that features a transit time typically one to two days longer than premium FedEx International Priority service, which is designed for more time-sensitive shipments.

The new service effectively addresses the needs of customers who look for reliability and cost efficiency as a top priority in shipping.

FedEx International Economy is specially designed for customers with less urgent shipments of individual packages under 68 kilograms, but who require the reliability they have come to expect with FedEx.

No weight restrictions apply for multi-piece shipments.

Offered on competitive list rates and backed by a money-back guarantee, FedEx International Economy typically delivers intra-Asia packages in two business days, and shipments to the U.S. and major markets in Europe typically in three to four business days.

As with the FedEx International Priority service, customers can use fedex.com for online tracking with proactive e-mail notification in 15 languages.

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