Tag: UPS

Global integrators keep driving up fuel surcharges for air express

Posted by | Jul 11, 2008 | |

Top express companies including DHL, FedEx, UPS and TNT have further increased their fuel surcharges for air express shipments in July as a result of dramatically rising oil prices around the world.
DHL Express hiked its US air express and international fuel surcharge to 34 pct for the 29 June – 2 August period compared to 30 pct in June and 27 pct in May.
In Europe, DHL currently has an air express surcharge of 20 pct, up from 18.5 pct in June and 17.5 pct in May. In Asia Pacific, DHL’s fuel surcharge has risen from 21.5 pct in May and 23.5 pct in June to 26.5 pct in July.
FedEx Express increased its fuel surcharge for US domestic, import and export shipments to 32.5 pct for the July 7 – August 3 period from a previous 28 pct in June and 25 pct in May. In Europe, Middle East, India and Africa (EMEA), the FedEx fuel surcharge was hiked to 20 pct for July 7 – August 3 from 18 pct in June and 17 pct in May.
In Asia, where its surcharges vary by country, the July export shipment fuel surcharge in Singapore is 24.5 pct, up from 22 pct in June and 20.5 pct in May. The import shipment fuel surcharge for July is 26.5 pct, up from 24 pct in June and 22.5 in May. In Hong Kong, the FedEx fuel surcharge for exports and imports is 24.5 pct for July, up from 22 pct in June and 20.5 pct in May.
UPS has increased its US domestic and international air express fuel surcharge to 32.5 pct effective July 7 from the previous 28 pct applied in June and the 25 pct charged in May. In Europe, UPS hiked its fuel surcharge for express and expedited shipments to 20 pct from July 7 onwards from the previous level of 18.5 pct in June and 17.5 pct in May. In Asia, the UPS package service fuel surcharge went up to 24.5 pct on July 7 from 22 pct in June and 20.5 pct in May.
TNT Express increased its European fuel surcharge to 21.5 pct for the June 30 – 3 August period from 20 pct in June. In the UK, where it has different fuel surcharges, the global express surcharge went up to 13 pct in July from 11.5 pct in June. The separate UK domestic and economy express surcharge increased to 6.5 pct in July compared to the June and May figure of 5.5 pct. In the rest of the world (excluding the Americas), the TNT surcharge is at 27 pct for July compared to 23 pct in June. In North America, its fuel surcharge rose to 34.5 pct in July from 30 pct in June.

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Integrator share prices slump as oil prices soar

Posted by | Jul 8, 2008 | |

Stock prices of top express companies including DHL parent Deutsche Post World Net, TNT, UPS and FedEx have fallen dramatically over the last six months, primarily due to rising oil prices and worsening economic conditions.

DPWN has experienced the most dramatic fall. Its June 30 share price of EUR 16.60 represented a 17.5 pct fall on the previous month and a 28.5pct slump compared to January 2, 2008.

TNT shares also fell sharply by 14.5pct to EUR 21.72 as of June 30 compared to one month earlier, and ended the first half of 2008 with an overall decrease of 22.2pct. Despite the completion of a EUR 500 million share buyback programme, its stock price was negatively impacted by the weaker economic environment, rising oil prices and a Q1 profit drop of 17.7pct.

UPS suffered a share price drop of 14.1pct to USD 61.47 as of June 30 compared to the previous month. The six-month drop in the share price was slightly lower at 12.5pct. In Q1, the slowing US economy and unprecedented increase in the cost of fuel along with additional charges for aircraft retirement and redundancies caused lower-than-expected US package volume and an accelerating contraction in the use of premium air products which resulted in a double-digit drop in profit.

FedEx is also suffering from the triple impact of soaring fuel prices, the weak US economy and financial charges causing its shares to fall by 14.5pct to USD 78.79 as of June 30 compared to May 30. It had the lowest half-year share price fall of the “Big Four” with 8.55pct.

Trying to compensate for higher fuel costs, the four integrators increased their air fuel surcharges dramatically to the 20pct – 30pct range last month as soaring oil prices drove up operating costs.

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Postal chief sees freight returning to rail and sea (Australia)

Posted by | Jul 7, 2008 | |

The international freight industry will face increasing pressure to cut back on flights and revert to sea and rail deliveries because of environmental concerns, the head of Australia Post predicts.
Australia Post’s managing director, Graeme John, who will be chairman of an annual meeting this week in Queensland of nine of the world’s biggest postal groups, said the problem of global warming would have an increasing influence on the way the global postal industry is run.
Mr John said growth in international freight from consumer goods such as electronics had been managed on a “just in time” basis, with air travel preferred to other forms of transport because of its speed advantage. But that approach was no longer viable.
The postal groups meeting this week – Australia, the United States, Hong Kong, Japan, South Korea, Spain, France and Britain – are members of the Kahala Post Group, a consortium created five years ago to help them compete with private freight companies.
Mr John instigated the consortium because he “wanted to do something about the dominance of the DHLs and the FedExs and UPSs in the international parcel network”, as did other former monopoly postal groups.
The Kahala group – named after a resort the members stayed at during their founding meeting in Hawaii – conceded they could not compete with the private companies on speed, so instead focused on reliability of delivery.
But to guarantee that reliability the Kahala members had to upgrade their tracking systems.
It also required the creation of a “delivery calculator” – a database of eight billion postcodes that allows a customer to walk into any postal outlet, list their destination and be told a precise window during which a parcel would be delivered.
While the private couriers already offered that certainty, and faster delivery, the Kahala members undercut their prices by 40 per cent to 50 per cent.
As well as pressure to shift towards less environmentally-damaging modes of transport, Mr John said a worsening economic environment could prompt a trend to slower “deferred” delivery services.
The Kahala partnership is also moving beyond postage, with Australia Post, China Post and the US Postal Service preparing to launch a group-owned money transfer service to compete against Western Union.

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Indian carriers get ready to launch cargo flights abroad

Posted by | Jul 7, 2008 | |

With competition hotting up from big-time players such as FedEx and UPS as well as the established international cargo airlines, two of India’s top express players have chalked out plans to go overseas.

Over the past few years, the number of cargo carriers has gone up significantly. From the lone Blue Dart, the only Indian cargo carrier, there are today at least half a dozen more players.

Blue Dart Aviation, a subsidiary of express cargo carrier Blue Dart Express, has drafted a plan to start flying abroad. The plan, said Tulsi Mirchandaney, formerly senior vice-president, marketing and projects, and now managing director of Blue Dart Aviation, is in
the initial stage.

Mirchandaney should know because she was not only instrumental in marketing air cargo products but also involved in route planning and space allocation.

The decision to fly abroad has been prompted by the under-utilisation of Blue Dart’s fleet. Blue Dart has seven planes – four Boeing 737s and three Boeing 757s – that fly around the country for only eight hours at night.

In 2005, DHL Express completed the acquisition of 81.03 per cent of the equity capital of Blue Dart Express. Under the deal, Blue Dart continues to operate as an independent brand and provides a complete spectrum of domestic services through synergies with DHL.

The company is currently in talks with its parent DHL to find out ways in which the two could work together and ensure that Blue Dart planes can be used for international operations.

While Blue Dart firms up its plan, GATI, an express cargo delivery major with experience in distribution and supply chain management solutions, has started its foreign air cargo operations with Air India.

GATI’s managing director and chief executive officer Mahendra Agarwal said that his company had an agreement with Air India to take cargo overseas. This would be a follow-up to GATI’s tie-up late last year with the national carrier.

According to that tie-up, three of AI’s Boeing 727-200 freighters operate with the GATI logo within the country.

Keen to establish its presence globally, GATI has set up offices in China, Japan, Dubai, Hong Kong Thailand, Nepal and Sri Lanka and has plans to foray into other markets. The express major’s revenues have grown from USD 1 46 million to USD 7.04 million over the past three years.

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ABX Air aims for smaller but more profitable post-DHL future

Posted by | Jul 3, 2008 | |

ABX Air is planning for a post-DHL future based on a smaller but more profitable business with other customers.
Joe Hete, President of the airline’s parent company Air Transport Services Group (ATSG), told analysts and investors in a conference call that the company still believed it could offer DHL a competitive model compared to the planned DHL-UPS cooperation, and warned that the connection of the two global air express networks could prove “expensive and challenging”.
Admitting that the transition from DHL operations would not be easy, Hete commented: “We expect ABX to grow and prosper without DHL.” DHL currently accounts for about 74 pct of ABX Air revenues.
ABX Air had already been diversifying its customer base for several years and was well-positioned to place the B767 fleet with other customers on a wet-lease or dry-lease basis, Hete said. About half of the DHL-dedicated B767s could be placed with other customers, he added. Key customers include USPS, the US military and freight forwarder Schenker BAX.
CFO Quint Turner noted that ABX’s activities for DHL had been “low-margin business” and stressed that the company believed it could generate a higher return on capital from other customers. Although ABX has a ‘put’ option to return aircraft to DHL, the planes have a low book value, and higher prices might be achievable if the planes were sold on the open market, executives noted.
ATSG is also talking with DHL about severance packages for ABX pilots and aircraft mechanics.

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