Tag: International

U.S. express traffic slows

Posted by | Jul 18, 2008 | |

Air Cargo Management Group reports that revenues for the U.S. domestic air freight and express industry totaled USD 32.81 billion in 2007, a slim 1.0 pct increase over 2006, but nonetheless a new record for the industry. “Gains in 2007 must have come from fuel surcharges, as total market revenue-ton-mile (RTM) traffic and the daily shipment counts of the express carriers both declined,” noted Robert Dahl, ACMG Proj¬ect Director.
Traffic volume for the industry was 14.924 billion RTMs, down 1.5 pct year-over-year, and the number of shipments moving through the major express networks was 6.644 million per day, down 1.8 pct versus 2006. “The industry remains at or near 1999 levels based on both these performance metrics; in other words, this industry has gone through eight years with no net growth,” Dahl said. “Furthermore, part-year data for 2008 gives little hope of any major increase this year. In fact, there are numerous challenges facing the industry, including re¬cord-high fuel prices, a weak U.S. economy and a perceived shift of air shipments to trucks, which could lead to further traffic declines in 2008 and 2009.”

ACMG finds that the US domestic air freight and express industry continues to undergo significant structural changes in both the express and general freight sectors. The players in the express side remain unchanged, consisting of FedEx, UPS, DHL and BAX Global; however, DHL is changing its business model in the domestic U.S. market to eliminate its own contracted air network, instead buying space starting this year from UPS to move its shipments on an airport-to-airport basis within North America. When the DHL shift to UPS is complete in 2009, there will be just three express freighter networks operating within the U.S. (UPS, FedEx and BAX/Schenker), down from eight in the mid-1990s.

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DHL returns to the runway at Mercedes-Benz Fashion Week Swim, July 18 – 21

Posted by | Jul 18, 2008 | |

South Florida-based DHL returns for a second year as sponsor of Mercedes-Benz Fashion Week Swim, held in Miami Beach at The Raleigh Hotel, July 18 through July 21. The annual designer swimwear event introduces the 2009 collections and highlights DHL’s role in delivering the latest fashions to runways and customers across the globe.

As a major international presence in South Florida’s business community, DHL provides its supply chain expertise to world-renowned designers, including many recognized brands with roots or an expanding customer base in Latin America. In fact, DHL is the primary supply chain partner for many of the designers participating in this season’s shows, including Tibi, which will debut a swimwear collection at Mercedes-Benz Fashion Week Swim, and ViX Swimwear, among others.

Globally, as the Official Express Delivery and Logistics Provider of IMG’s Fashion Weeks, DHL delivers Fashion Week events to four continents. In the U.S., DHL is the sponsor of Mercedes-Benz Fashion Weeks in New York, Los Angeles and Miami.

Mercedes-Benz Fashion Week Swim is presented annually in Miami Beach at The Raleigh Hotel. Coinciding with the swimwear industry’s largest trade show, the invitation-only, runway-platform extravaganza provides designers’ swimwear and resort collections exposure to national and international media, style setters and fashionistas. South Beach becomes the host for fashion, beauty, supermodels and celebrities to coalesce to celebrate the sexiest swimwear designs in the world.

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DHL should repay ABX for overhead, arbitrators rule

Posted by | Jul 17, 2008 | |

Deutsche Post AG’s DHL Express should reimburse ABX Air Inc. for overhead expenses related to a contract in November, arbitrators ruled.

ABX and DHL will begin discussing how much of ABX’s overhead DHL should pay, Wilmington, Ohio-based ABX said today in a statement distributed by Business Wire.

ABX claimed that DHL defaulted on an agreement Nov. 5 by failing to repay it for certain costs. DHL contended some expenses no longer had to be reimbursed because ABX’s revenue from other customers exceeded 10 percent of total sales.

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FedEx plans to acquire TNT would shake up the industry

Posted by | Jul 17, 2008 | |

Independent research company Datamonitor says FedEx is reported to be interested in acquiring TNT, which seems to suggest that it does not want to rely on organic growth to strengthen its position in the global express market. Although combining two of the world’s leading players would put strong pressure on the other two integrators, UPS and DHL, overall, the competitiveness of the industry looks set to remain intact.

FedEx has already been trying to reduce its dependence on its home market and the use of air networks by building a stronger presence in the European market, as well as investing in its Asian network. The acquisition of ANC in the UK helped to secure a stronger position in one of Europe’s key markets, and TNT’s dominant position in the intra-European express market makes it an ideal target that would allow FedEx to develop its position in Europe further.

Preliminary results from Datamonitor’s upcoming European Express Market Map suggest that, despite showing decreasing growth rates, the European express market is still in a good state, with the B2C and Eastern European markets acting as its main growth drivers. TNT is particularly well positioned to capture any growth in the B2B markets as it has a strong road and air network that is operational in all the key markets. The company also boasts a strong position in emerging markets in the rest of the world, notably the Brazilian, Russian, Indian and Chinese (BRIC) markets and the Middle East.

FedEx and TNT have reciprocal geographic strengths and, as TNT has lost its monopoly in its home mail market, a combination of the two companies appears to make strategic sense. The merger would also put significant pressure on European market leader DHL, which is trying to recover its market position in the US, where it continues to lose money in a co-operation agreement with UPS (which has also been reported to have an interest in acquiring TNT).

Should the tie-up be completed, the effects would be far-reaching, says Datamonitor Logistics and Express senior analyst Erik Van Baaren. “Significant pressure would be placed upon DHL and UPS, given that they would have to compete with a global player capable of exploiting greater economies of scale and serving the needs of globally operating companies more efficiently as further internationalization of the industry takes shape.”

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Amazon, others to suck up holiday shipping costs

Posted by | Jul 17, 2008 | |

Online retailers cannot afford to raise shipping prices. The high cost of fuel is hurting the wallets of American consumers and businesses alike, but online retailer Amazon.com Inc and others will likely forgo shipping price increases on its discount programs this upcoming holiday shopping season for fear of alienating hard-pressed shoppers in the weak economy.

Long-term contracts with shippers may insulate Amazon and some others, even as companies small and large scramble to find other costs to cut. Margins could suffer more as time goes on, but the biggest companies could watch smaller rivals fade away as the move to online shopping continues to accelerate.

Avoiding shipping price hikes may appear foolhardy — after all, the cost of diesel fuel has risen 154 percent in the last year. But companies such as Amazon and Overstock.com Inc rely on low or free shipping to stoke business in good times — so any rise in bad times could be a major problem.

Free shipping is a major competitive advantage for Amazon, which has already been lowering prices to stave off rivals, said Forrester analyst Sucharita Mulpuru.

U.S. carriers like United Parcel Service Inc, FedEx Corp and the U.S. Postal Service have been raising prices due to higher fuel costs.

But Amazon and some brick-and-mortar companies with major online businesses say they’ve largely been able to insulate themselves by being more efficient elsewhere in their businesses, whether through better distribution or less waste.

Overstock will not raise its blanket USD 2.95 shipping price on a full order, and fuel increases have not affected the company’s profit margins, Chief Executive Patrick Byrne said.

Large online shippers have bargaining leverage over transport carriers when it comes to contracts, Amazon and Overstock said.

However, smaller online retailers that aren’t as nimble as Amazon will be struggling this holiday with higher fuel costs and be forced to raise shipping prices.

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