Tag: USA

Earnings Preview: Economy weighs on UPS profits

Posted by | Jul 21, 2008 | |

Slowing U.S. economic growth and high fuel costs are expected to put a damper on United Parcel Service’s results for the April-June quarter. The Atlanta-based company lowered its earnings expectations for the quarter on June 23.

UPS predicted earnings per share for the second quarter, which ended June 30, would be within a range of 83 cents to 88 cents, compared with the 97 cents to USD 1.04 the company originally anticipated.

UPS is able to pass higher fuel costs on to customers in the form of a fuel surcharge on shipments. However, the surcharge increases have not kept pace with rapidly rising fuel prices. Meanwhile, UPS’ business has suffered amid the economic downturn in the U.S. The result has been lower-than-expected domestic package volume and customers making less use of premium air products.

UPS last month did not say what impact its lower expectations for the second quarter might have on its full-year results. But analysts have lowered their projections for UPS’ full-year results.

Wachovia Capital Markets analyst Justin Yagerman said in a research note last week that the U.S. economy will continue to be shaky for the rest of 2008, which will likely affect UPS’ results.

He also said that UPS’ international results going forward could be affected by slowing economic growth in Europe. Long-term, however, he said he remains bullish about UPS’ overall business prospects.

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FedEx chief says U.S. is not in a recession

Posted by | Jul 21, 2008 | |

FedEx Corp. Chief Executive Officer Fred Smith said the U.S. economy isn’t in a recession and that oil prices will “drift down for a while.”

FedEx said in June the coming year would be “very difficult” because of near-record fuel prices and a cooling domestic economy. U.S. shipping volume fell 3.4 percent for the three months ended May 31, as fuel surcharges for express service reached 28 percent.

Oil will likely fall in the second half, Smith said, declining to predict a price. “Whether it stays at USD 140 or goes down to USD 110 is anyone’s guess,” he said. “Barring some global event, I think oil prices will drift down for a while.”

Crude jumped more than 70 percent in the past year, closing at a record USD 145.29 a barrel on July 3. The price has dropped 10 percent since then, to USD 130.10 this morning on the New York Mercantile Exchange.

While some shippers are still trading down to cheaper shipping options such as two-day or ground delivery, the “vast majority” of those switches have occurred already, Smith said. Intercontinental express shipments are growing at a “good rate,” he said, without giving specific figures.

Smith wouldn’t comment on his interest in any acquisitions. The Financial Times reported on July 12 that FedEx is in preliminary discussions to buy TNT NV, Europe’s second-biggest express-delivery company.

There have been “lots of rumors swirling about TNT for years,” Smith said. “We don’t comment on corporate development activities.”

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Two veteran Postal Service executives named officers (U.S)

Posted by | Jul 18, 2008 | |

Postmaster General John E. Potter has named Pritha Mehra Vice President of Business Mail Entry and Payment Technologies and Maura Robinson Vice President of Pricing. These newly created positions are the latest in the Postal Service’s reorganization efforts to leverage competitive opportunities resulting from recent changes in federal law.
On July 1, Potter announced that he had created two new divisions, Shipping and Mailing Services and Customer Relations, and strengthened another, the Office of Intelligent Mail and Address Quality. All are intended to position the Postal Service to meet the challenges ahead.
Mehra will be responsible for an end-to-end, mail flow visibility strategy as well as for a seamless process for mail acceptance, payment, and delivery using standardized Intelligent Mail barcodes, continuous tracking, and mail-quality feedback in real time. She will report to Tom Day, Senior Vice President of Intelligent Mail and Address Quality.
Robinson’s duties will include pricing all postal and non-postal products and services, and providing analytical support and evaluation of all contract pricing and new product initiatives. She will report to Stephen Kearney, who was recently promoted to Senior Vice President of Customer Relations. Kearney served previously as Vice President of Pricing and Classification.

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U.S. express traffic slows

Posted by | Jul 18, 2008 | |

Air Cargo Management Group reports that revenues for the U.S. domestic air freight and express industry totaled USD 32.81 billion in 2007, a slim 1.0 pct increase over 2006, but nonetheless a new record for the industry. “Gains in 2007 must have come from fuel surcharges, as total market revenue-ton-mile (RTM) traffic and the daily shipment counts of the express carriers both declined,” noted Robert Dahl, ACMG Proj¬ect Director.
Traffic volume for the industry was 14.924 billion RTMs, down 1.5 pct year-over-year, and the number of shipments moving through the major express networks was 6.644 million per day, down 1.8 pct versus 2006. “The industry remains at or near 1999 levels based on both these performance metrics; in other words, this industry has gone through eight years with no net growth,” Dahl said. “Furthermore, part-year data for 2008 gives little hope of any major increase this year. In fact, there are numerous challenges facing the industry, including re¬cord-high fuel prices, a weak U.S. economy and a perceived shift of air shipments to trucks, which could lead to further traffic declines in 2008 and 2009.”

ACMG finds that the US domestic air freight and express industry continues to undergo significant structural changes in both the express and general freight sectors. The players in the express side remain unchanged, consisting of FedEx, UPS, DHL and BAX Global; however, DHL is changing its business model in the domestic U.S. market to eliminate its own contracted air network, instead buying space starting this year from UPS to move its shipments on an airport-to-airport basis within North America. When the DHL shift to UPS is complete in 2009, there will be just three express freighter networks operating within the U.S. (UPS, FedEx and BAX/Schenker), down from eight in the mid-1990s.

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DHL returns to the runway at Mercedes-Benz Fashion Week Swim, July 18 – 21

Posted by | Jul 18, 2008 | |

South Florida-based DHL returns for a second year as sponsor of Mercedes-Benz Fashion Week Swim, held in Miami Beach at The Raleigh Hotel, July 18 through July 21. The annual designer swimwear event introduces the 2009 collections and highlights DHL’s role in delivering the latest fashions to runways and customers across the globe.

As a major international presence in South Florida’s business community, DHL provides its supply chain expertise to world-renowned designers, including many recognized brands with roots or an expanding customer base in Latin America. In fact, DHL is the primary supply chain partner for many of the designers participating in this season’s shows, including Tibi, which will debut a swimwear collection at Mercedes-Benz Fashion Week Swim, and ViX Swimwear, among others.

Globally, as the Official Express Delivery and Logistics Provider of IMG’s Fashion Weeks, DHL delivers Fashion Week events to four continents. In the U.S., DHL is the sponsor of Mercedes-Benz Fashion Weeks in New York, Los Angeles and Miami.

Mercedes-Benz Fashion Week Swim is presented annually in Miami Beach at The Raleigh Hotel. Coinciding with the swimwear industry’s largest trade show, the invitation-only, runway-platform extravaganza provides designers’ swimwear and resort collections exposure to national and international media, style setters and fashionistas. South Beach becomes the host for fashion, beauty, supermodels and celebrities to coalesce to celebrate the sexiest swimwear designs in the world.

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