Tag: UPS

Deutsche Post sees DHL breaking even in U.S. in 2-3 years

Posted by | Dec 5, 2006 | |

Deutsche Post expects its DHL Express business in the United States to break even in two to three years as it takes on larger U.S. rivals UPS and FedEx.

The company wants to achieve a return on sales of 3 to 5 percent at the U.S. business in the mid to long term, DHL Express head John Mullen said at a capital markets day in New York on Tuesday.

“The United States is a long, hard road,” Mullen said. “I think we are making good progress. At the moment, our focus is clearly to break even.”

The company had previously said it did not expect DHL Express to break even in the U.S. before 2009.

Shares in Deutsche Post rose 3.6 percent to 23.35 euros following Mullen’s comments, making them the second-best performers on the German DAX index.

Deutsche Post is struggling with losses at DHL Express in the United States as it tries to boost its presence in a market dominated by FedEx and UPS. Deutsche Post has expanded into new markets, in particular through its DHL logistics and express delivery divisions, as it prepares to lose its domestic mail monopoly.

Mullen said the 3 to 5 percent return-on-sales target for DHL Express in the United States was “hardly on the radar screen,” but added: “It’s there as an aspirational goal.”

The company is aiming to achieve an eventual return on sales of 10 percent across DHL Express worldwide.

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FedEx raises ground, home delivery rates by 4.9 percent

Posted by | Dec 5, 2006 | |

FedEx Corp. (NYSE: FDX) will increase standard list rates for FedEx Ground and FedEx Home Delivery shipments by an average 4.9 percent on January 1.

Rival United Parcel Service Inc. (NYSE: UPS) will raise list rates by 4.9 percent for ground shipments and 4.9 percent for air express shipments, when factoring in a 2 percentage point reduction in fuel surcharges.

FedEx announced last month that rates for its FedEx Express shipments in the United States and for export will increase by 3.5 percent at the first of the year, when a decrease in fuel surcharges of 2 percentage points is factored in.

The company also will begin adding other transportation-related surcharges, such as those for rural or home delivery, to total costs before figuring fuel surcharges on FedEx Ground shipments.

In February, FedEx Ground will begin using a “dimensional weight system” for figuring rates on large but relatively lightweight packages, rather than relying on weight alone.

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Worldport Project’s Diversity Goal Again Set at High Level

Posted by | Dec 4, 2006 | |

When UPS opened its WorldportSM international air hub here in September 2002, it marked the culmination of the largest construction project in UPS’s history. It also produced a remarkable opportunity for Minority and Women Business Enterprise (MWBE) firms because of a commitment by UPS to involve them in the project.

Today, as UPS prepares to start a massive expansion of Worldport, the company once again has set a goal of awarding to minority and women contractors at least 20% of the USD250 million it expects to spend on general construction. That goal is in addition to UPS’s determination to involve minority and female firms in securing components from Original Equipment Manufacturers (OEM).

UPS set an identical goal for the original construction of Worldport, ultimately awarding USD98 million to minority and female firms. The new expansion project, which calls for the first phase to open in 2009, will be completed in 2010.

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British CEP market consolidates further

Posted by | Dec 1, 2006 | |

The fragmented British courier, express and parcels market looks set for a new wave of consolidation following this week’s GBP 210 million acquisition of independent parcels carrier Target Express by Rentokil Initial, parent holding of leading player City Link. The deal makes City Link into a top competitor to DHL, TNT and UPS in the domestic next-day parcels market.

Growth in Europe’s second-largest express and parcels market has slowed over the last year, especially in the domestic sector. The market is forecast to grow only moderately at about 3% over the next few years. At the same time, the traditionally fierce price-based competition in Britain and higher operating costs, especially fuel costs, have combined to put pressure on profit margins. These factors have hit smaller, domestically-focused companies in particular, and opened up new opportunities for mergers and acquisitions.

There have already been several important transactions in the UK in recent years. UPS improved its domestic market position with the acquisition of Lynx Express last year, while Amtrak Express Parcels broadened its portfolio through the takeover of Nightspeed. DHL had earlier jumped to become market leader with the acquisition of the Securicor Omega Express business, while GeoPost had acquired Parceline and Interlink Express.

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UPS to increase air freight capacity

Posted by | Dec 1, 2006 | |

United Parcel Service Inc. expects to increase its air freight capacity and save millions of dollars in fuel costs, with new cockpit technology that makes pilots more aware of a plane’s surroundings, a UPS executive said.

The system called SafeRoute, developed by ACSS, a joint venture between defense companies L-3 Communications Holdings Inc. of the U.S. and Thales SA of France, allows pilots to cruise in to the landing strip reducing fuel burn, noise, and noxious emissions as well as increasing the frequency of arrivals.

The system gives pilots access to data created by a new generation of transponders that provide a continuous feed of information about an aircraft’s position. Current transponders, by contrast, provide that information only when it’s requested.

UPS, the world’s largest package delivery company, expects to be able to save initially USD3 million to USD4 million a year in fuel costs, by reducing unnecessary miles flown on landing approaches.

The company also expects to increase arrivals at its key Louisville hub, which is undergoing a USD1 billion expansion, to up to 57 landings an hour, about 10 more than currently, Lee said.

UPS is readying its fleet of Boeing planes for the system and expects to begin implementing on a full-scale in August.

UPS expects the initial introduction of the system to take three to five years.

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