Tag: UPS

Financial investor bids over EUR 500m for Seur controlling stake

Posted by | Aug 1, 2008 | |

British private equity company Doughty Hanson has bid more than EUR 500 million to buy a 52 pct majority stake in Spanish express parcels operator Seur in an offer valuing the company at about EUR 1 billion. DHL and UPS were apparently also interested in the company.
According to Spanish business newspaper Expansión, the UK financial investor has made the offer to a group of Seur franchisees who have decided to sell off their shareholdings in the group. The offer, valuing the whole company at EUR 1 billion, is thus worth about EUR 520 million.
Expansión, citing market sources, described the bid as “friendly” and said that Doughty Hanson was ready to work with other Seur shareholders, including La Poste subsidiary GeoPost, which owns a 19.6 pct share in the group.
The other Seur shareholders now have 45 days to decide whether to exercise their right to block the bid with a counter-offer of at least the same size, the newspaper wrote. Sources close to La Poste said that no decision has yet been taken about this, it added.
Seur, with revenues of EUR 665 million last year, has a complex, decentralised ownership structure comprising regional franchisees who also own small stakes in the parent company Seur SA. Seur has 85 franchisees in total controlled by 54 companies. The franchisees seeking to sell their holdings represent 52 pct of Seur capital, 65 pct of the franchises by number, and generate 5 pct of gross profits, according to the newspaper.

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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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UPS nears agreement with drivers and package handlers (U.S)

Posted by | Jul 31, 2008 | |

United Parcel Service reached a tentative agreement with Chicago-based Teamsters Local 705 on a new contract covering roughly 11,000 drivers, package handlers and other part-time and full-time workers just hours ahead of a strike deadline, the parties said Thursday (31st July).

Workers’ hourly pay currently ranges between roughly USD 8.50 and USD 28. That would raise USD 4 over the life of the five-year contract, Local 705 Secretary-Treasurer Steve Pocztowski said. The deal also includes improved pension benefits, an extra week of vacation plus an extra day off, he said.

The proposal will be voted on by workers within the next five weeks, Pocztowski said.

UPS reached a tentative agreement with Teamsters Local 710 on a new five-year contract covering about 6,500 workers in Illinois, Indiana and Iowa on Tuesday (5th August).

That five-year agreement includes a more than 4 percent increase in wages and benefits and places limits on forced overtime, Chicago-based Teamsters 710 Secretary-Treasurer Pat Flynn said earlier this week. It also “dramatically increases part-time workers’ health and welfare coverage,” he said.

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Deutsche Post unfazed by US presidential candidate concern over DHL cuts

Posted by | Jul 31, 2008 | |

Deutsche Post World Net (DPWN) shook off criticism by US presidential candidates Barack Obama and John McCain of the planned closure of DHL’s air hub at Wilmington, Ohio, and stressed it is on track with the US restructuring measures.

On Tuesday (29th July), Obama and McCain both took up the issue of the planned Wilmington closure, with the expected loss of some 8,000 jobs at DHL and sub-contractors ABX Air and Astar Air Cargo. They each called for an investigation into potential anti-trust issues resulting from the planned DHL-UPS airlift deal, and spoke out in favour of government support for workers who lost their jobs.

Speaking at company press conference on its half-year financial results, DPWN CEO Frank Appel said he was “sorry” about the job losses at Wilmington but stressed the cuts were necessary in view of the likely USD 1.3 billion loss at DHL Express USA this year and to strengthen DPWN as a whole. “If we did not do this, then we would endanger even more jobs,” he declared.

In response to questions, Appel said DPWN had held talks with various US officials for some time and commented that the statements of the two presidential candidates were “moderate” and showed they understood DHL’s problems.

Due to DHL’s heavy US losses, the situation was not comparable with that of Nokia, which was forced to pay back subsidies in Germany after announcing the closure of a production site, he said. DHL Express had received “low” subsidies at Wilmington but did not expect to have to pay them back.

Appel also stressed that the measures to restructure DHL Express USA were on track despite deteriorating market conditions and the weakening US economic environment. The first DHL-contracted aircraft had been taken out of service, the first DHL ground stations closed and other cost reduction measures had been implemented, he said.

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Deutsche Post Profit Falls 11 pct on DHL U.S., Postbank

Posted by | Jul 31, 2008 | |

Deutsche Post AG , said second-quarter profit fell 11 percent on costs to revamp the DHL Express division’s U.S. unit and after writedowns hurt earnings at Deutsche Postbank AG.
Net income fell to 254 million euros (USD 396 million), or 21 cents a share, from 285 million euros, or 24 cents, a year earlier, Bonn-based Deutsche Post said in a statement. Sales rose 5 percent to 16.2 billion euros.
Chief Executive Officer Frank Appel forecast in May that the DHL U.S. express-delivery unit will suffer a loss of USD 1.3 billion this year as a slowing U.S. economy hurts demand for air shipments and the business struggles to compete with United Parcel Service Inc. and FedEx Corp. Postbank, also based in Bonn, yesterday 30th July reported a 21 percent drop in second-quarter profit because of writedowns on debt-related investments.
Deutsche Post announced plans in May to limit losses at the U.S. express-delivery operations by shrinking the network, firing workers and transferring air deliveries to Atlanta-based UPS. The revamp will cost the mail carrier USD 2 billion through 2009, it forecast at the time. Deutsche Post said today the unit’s reorganization is “on track” and that talks with UPS over a final contract are making progress.
Postbank, of which Deutsche Post owns 50 percent plus one share, said yesterday that second-quarter net income fell to 119 million euros from 151 million euros a year earlier after writing down the value of securities by 143 million euros. The quarter’s markdowns bring Postbank’s total losses related to the U.S. subprime-mortgage-market collapse to 429 million euros.
Appel said in a statement today that the mail carrier is having discussions with “various potential partners” on the bank’s future. Deutsche Post announced June 25 it’s holding “exploratory” talks about a sale of Postbank as the company focuses on mail, express deliveries and logistics.
Postbank may fetch 9 billion euros to 11 billion euros, Carsten Werle, an analyst at Sal. Oppenheim in Frankfurt, wrote to investors this month. The bank has a market value of about 7.6 billion euros after the stock dropped 23 percent this year.

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