Tag: North America

U.S. Postal Service proposes new mailing standards to increase efficiency

Posted by | Sep 26, 2006 | |

The U.S. Postal Service proposes to revise its mailing standards to encourage mail preparation that is compatible with the Postal Service’s improved processing capabilities. When implemented, the standards would accompany the proposed price changes planned to take effect next spring.

The new standards give customers more choices in terms of shape, sorting, packaging and containers that encourage more efficient mail preparation. The proposal also increases worksharing opportunities for mailers, allows them to qualify for lower prices by permitting multiple classes of mail to be combined, and reduces the number of bundles, sacks, or trays in a mailing through scheme sorting for letters, flats, and parcels, when appropriate.

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FedEx annual shareholders' meeting

Posted by | Sep 26, 2006 | |

Fleet upgrade. FDX announced a $2.6B plan to replace its narrow-body Boeing 727 fleet over time with wide-body 757’s. This project will run from C08 to C16, and FDX reiterated its unchanged guidance for $3.0B capex in F07. Because the project is spread out over 8 years, it should not materially impact capex in years beyond F07, and management is still guiding to capex of 6-8% of revenue going forward. This plane upgrade has been expected for some time.

Supermajority voting eliminated. Previously, an affirmative vote by a supermajority of 80% of FDX shares was required to approve certain business combinations, including transactions with large FDX shareholders. Yesterday, shareholders voted to eliminate this requirement, so now such transactions will be approved by simple majority. FDX’s Board proposed this idea last April, so this does not come as a surprise to us. We see the change as a positive because it makes it marginally easier for the company to engage in M&A.

New Board member. Yesterday FDX’s shareholders elected Steven R. Loranger to a one year term on the Board of Directors. Mr. Loranger is currently the CEO of ITT Corporation, an engineering company. Shareholders also reelected all 13 Board members who served last year.

Plurality voting retained. Shareholders rejected a proposal that would have required FDX’s Directors to be elected by a majority of shares, rather than the plurality system now used. We see it as modestly negative that FDX retained plurality voting, which we believe decreases the Board’s accountability.

Lawsuit news immaterial. Several news reports came out last night pertaining to two FDX lawsuits. We found nothing surprising about the litigation update and nothing that would change our estimates.

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FedEx upgrades aging Boeing fleet

Posted by | Sep 26, 2006 | |

FedEx Corp. will spend USD2.6 billion to buy and upgrade nearly 90 Boeing 757-200s to replace its aging fleet of Boeing 727s.
The aircraft will begin flying between 2008 and 2016, the Memphis-based shipping company said Monday. The 757s have 20 per cent greater cargo capacity and use less fuel, the company said.
The larger, more fuel-efficient aircraft will decrease spending on fuel and reduce pollution and airport noise, the company said.
The company said it hadn’t yet reached agreements to acquire the planes.

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FedEx Corp. elects Steve Loranger, ITT chairman, as new director

Posted by | Sep 25, 2006 | |

Shareowners of FedEx Corp. today elected Steven R. Loranger, chairman, president and chief executive officer of ITT Corporation, to the corporation’s Board of Directors for a one-year term. The Board of Directors has appointed Loranger as a member of its Audit committee.

Before being named to his current position at ITT Corporation, a global, multi-industry engineering and manufacturing company, Loranger was executive vice president and chief operating officer of Textron, Inc., a global aircraft, industrial and finance company. Before joining Textron, Loranger held various executive positions at Honeywell International Inc. and its predecessor AlliedSignal, Inc., a technology and manufacturing company, including president and chief executive officer of Honeywell’s Engines, Systems and Services division. Loranger served as an officer and pilot in the United States Navy from 1975 to 1981. Loranger is a Phi Beta Kappa graduate of the University of Colorado, where he earned bachelor’s and master’s degrees in natural science.

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Board approves plan to replace narrow-body aircraft fleet with Boeing 757-200 aircraft

Posted by | Sep 25, 2006 | |

FedEx announced today a USD2.6 billion, multi-year program to acquire and modify nearly 90 Boeing 757-200 aircraft to replace FedEx Express’s narrow-body fleet of Boeing 727-200 aircraft. Subject to identification of suitable 757 aircraft to purchase and the successful negotiation of agreements to purchase such aircraft, FedEx Express expects to bring the new aircraft into service during the eight-year period between calendar year 2008 and 2016.

Compared to the 727 aircraft, the 757 has a 20 percent greater payload capacity, and has an approximately 25 percent lower operating cost per pound. Replacing the older 727 aircraft with the more fuel efficient and quieter 757 aircraft will have the effect of significantly reducing operating costs over time and providing better aircraft utilization efficiencies. In addition, the program will help to reduce greenhouse gas emissions and airport noise. The program is expected to have very positive financial benefits upon completion and although startup costs will be incurred, they will not materially affect earnings. The capital impact of the program on the current fiscal year was included in the company’s recent first quarter earnings release. The total FedEx capital spending forecast for fiscal 2007 remains at USD3.0 billion.

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