Tag: North America

UPS reports solid 4th quarter as global package business grows

Led by a strong performance in its international operations, UPS today reported net income of USD1.13 billion and a 10% increase in diluted earnings per share to USD1.04 for the fourth quarter ended Dec. 31, 2006.

For the full year of 2006, revenue rose almost 12%; operating profit increased 8%, and earnings per share climbed 11.2% to USD3.86. The international business reached new heights, reporting more than USD1.7 billion in operating profit. The company set a new record for package volume in 2006, delivering almost 4 billion packages or an average of 15.6 million per day.

Consolidated Results 4Q 2006 4Q 2005
Revenue USD12.6 B USD12.0 B
Operating profit USD1.8 B USD1.7 B
Operating margin 14.3% 14.3%
Average volume per day 17.3 M 16.8 M
Diluted earnings per share USD1.04 USD0.95

During the quarter, UPS announced the expansion of its international shipping portfolio by providing three time-definite delivery options each day to the world’s 30 largest markets, up from one or two daily options. These new delivery services make UPS’s international delivery portfolio the most expansive in the industry and cover more than 80% of the world’s GDP.

The Supply Chain and Freight segment improved from the third quarter, reflecting the positive impact of cost control measures taken in the fourth quarter. UPS Freight’s performance was impacted by the general softening in the Less-Than-Truckload (LTL) environment.

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Mail handlers in the US ratify five-year contract

The National Postal Mail Handlers Union has voted to ratify a new five-year contract with the U.S. Postal Service.
The contract provides a 1.2 percent retroactive increase effective Nov. 25, 2006, and another 1.2 percent increase effective Nov. 24, 2007. Handlers will receive a 0.6 percent increase on Feb. 16, 2008, followed by 1.2 percent increases each November from 2008 to 2010.
The agreement continues cost-of-living adjustments at current levels but cuts the Postal Service’s health insurance contribution by 1 percentage point per year. It also adds a new step at the top of the pay schedule, effective Nov. 25, 2006, and a new entry step to the beginning of the schedule, effective Feb. 3.
The contract, which follows a tentative Dec. 13 agreement between the union and USPS, runs through Nov. 20, 2011. It covers about 55,000 postal employees who transfer, load and unload mail.

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USPS extends use of CombineNet's advanced sourcing technology

CombineNet announced that the United States Postal Service has extended its license to use CombineNet’s advanced sourcing technologies for two more years. In the three years that the Postal Service has used CombineNet’s Advanced Sourcing Application Platform (ASAP), they have implemented the technology across multiple spend categories, sourcing roughly USD1 billion and realizing more than 35x Return on Investment. CombineNet ASAP enables the Postal Service to strategically source materials and services across multiple categories, including transportation (airfreight, ocean freight and holiday season truckload shipping), services (trash and recycling removal, vehicle wash), mail equipment materials (mail containers and pallet boxes), as well as the supply of fuel for its fleet vehicles.

Under its former and current Transformation Plans, the Postal Service set a goal to achieve a cost savings over a defined period. One of the things the agency did to reach this goal was to implement a broad sourcing strategy, including the creation of category management centers and the establishment of commodity sourcing strategies for each spend category. Implemented across multiple categories, CombineNet’s Advanced Sourcing Application Platform (ASAP) was one of the many strategic steps the organization took that resulted in savings of approximately USD2.1 billion over a 5-year period.

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Network Delivery and Now Courier merge operations

Network Delivery and Now Courier, both headquartered in Providence, merged on January 23, 2007 to form one of the largest employee stock ownership plan (ESOP) courier companies in the country, NOW Delivery – www.nowdelivery.com.

With a dedicated staff of drivers and a management support team with over 200 years of transportation and logistics experience, NOW Delivery will be able to provide an unparalleled level of service in the New England area.

“Our goal is to merge together to form a rock-solid base which can serve as both the foundation and springboard for our future expansion plans,” says Stephen Wright, COO of the newly-merged corporation. “This is an exciting time in the history of both companies. We are looking to expand within the New England marketplace, and beyond.”

Don Smith, president of Force One Trucking, Valley Stream, NY, and former president of Airborne Express subsidiary, Sky Courier, Sterling, VA, will act as the newly-named CEO, and Christopher Halkyard will fill the role of Chief Administrative Officer. No layoffs are planned.
About Network Delivery – Now Courier NOW Delivery, headquartered in Providence, R.I., provides time critical transportation and logistics services throughout New England. Robert Halkyard of Now Courier and Stephen Wright of Network Delivery will serve as directors of the newly-merged company.

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Shared savings plan could help Postal Service save energy

Postal Service facilities in the United States will be able to purchase energy-saving equipment through a series of new contracts that let utility providers help fund upgrades.
The contracts invite energy auditors to assess facilities and determine where savings can be found through upgrades or new equipment. Agency officials then will have the option of paying for improvements through the regular budget process or through financing offered by the energy company and paid off through later cost savings.
Julie Rios, executive director of energy initiatives for the Postal Service, said the arrangement would help the agency meet new energy efficiency goals announced by President Bush on Wednesday. It will also help to reduce recurring energy costs, she said.
Improvements under the program could vary widely based on the results of the facility energy audits, Rios said. The agency has dedicated funds for the replacement of chillers that rely on ozone-damaging chemicals, and audits could turn up other options like upgrading heating and air conditioning equipment, improving building insulation or changing lighting systems. Another possibility is improving the efficiency of the compressed air systems upon which mail processing facilities rely.
The Postal Service also is looking at making more use of renewable energy sources like solar and wind power. “You’re going to evaluate these technologies where there are the right physical conditions, and in general you do need the right support” from economic incentives from states and utilities, Rios said.

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