Tag: USA

DHL breaks ground on new Chicagoland Service Center

Posted by | Aug 29, 2006 | |

DHL, the world’s leading global express delivery and logistics company, today announced it has broken ground on a new, modernized service center operation just two blocks south of O’Hare International Airport in Chicago, IL. DHL will invest USD7 million in the new 78,960-sq.-ft facility, which will serve DHL’s local pickup, delivery and sorting operations. The new DHL Chicago service center is expected to be operational by early 2007.

This is the second recent major facility investment by DHL to enhance operations in the Chicago area. In September 2005, DHL opened a new 70,000-sq.-ft facility on West Cermak Road serving the Chicago loop area and providing pickup and delivery services for DHL’s largest customers in the financial, legal, and banking industries. The new airport area facility will feature state-of-the-art conveyors and sorting systems to process a higher volume of customer shipments more quickly throughout the area.

The new facility, located closer to the main artery off Mannheim Road to improve DHL customer access, will handle a wide variety of shipments – including domestic and international parcels as well as palletized, loose-load and container freight.

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US mail carriers want fair deal from USPS

Posted by | Aug 28, 2006 | |

The head of the National Association of Letter Carriers urged the U.S. Postal Service today at the opening of contract negotiations to build on an improved labor relations climate and reward letter carriers with a “fair” wage increase and continued benefits for helping it become a profitable and productive government agency.
NALC President William H. Young noted that the Postal Service has eliminated the debt of USD 11.3 billion it had in 2001 when the current contract began. The Postal Service has turned an USD 8.4 billion profit over the past three years, he added.
“Letter carriers expect to be rewarded for their contributions to the success of the Postal Service,” Young said.

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FedEx Express and ALPA Announce Tentative Labor Agreement

Posted by | Aug 27, 2006 | |

FedEx Express, a unit of FedEx Corp. (NYSE:FDX), and the Air Line Pilots Association, Int’l. (ALPA), the collective bargaining representative for FedEx Express pilots, jointly announced today that they reached a tentative agreement (TA) on a new labor contract on Saturday evening. Negotiations have been conducted under the guidance of the National Mediation Board since October 2005 and both parties acknowledged the Board’s support.

The new agreement is subject to review and finalization of contract language, which is expected to be completed shortly. Terms of the tentative agreement are not being released as they first must be reviewed and approved by the FedEx ALPA Master Executive Council (MEC). If approved, the TA will be subject to a ratification vote by about 4,700 FedEx pilots and if ratified, the four-year contract would become amendable in 2010.

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Postal Service Gains U.S. Market Share

Posted by | Aug 25, 2006 | |

The U.S. Postal Service, riding the wave of strong demand for its Priority Mail deferred air product, gained U.S. air market share in 2005 for the first time in three years, The Colography Group, Inc., said today in releasing its full-year 2005 analysis of the domestic U.S. air cargo market.

According to The Colography Group, the USPS’ share of the air shipment market increased to 37.7% in 2005, as compared to 37.1% in 2004. The Postal Service, the only carrier to gain shipment share year-over-year, grew its shipment base by 4.9% in 2005, by far the fastest growth of any domestic air competitor.

The Postal Services’ gains were attributable to a resurgence in Priority Mail, its two-to-three day delivery product which had fallen on three years of hard times following a 15% rate increase in 2002 that sent customers fleeing to competitors. Since then, however, the USPS has kept rates steady while its private-sector rivals have imposed annual price increases. In addition, USPS can pass on lower operating costs to its customers because it cannot by law impose surcharges to offset rising fuel costs. The result of both factors has been a widening price differential between low-cost Priority Mail and its competition, leading to increased demand from value-conscious shippers.

Not surprisingly, deferred air shipments showed healthy growth in 2005, rising 4.2% over 2004 levels. By contrast, overnight air traffic grew by less than half that at 1.9%. Priority Mail accounted for almost three-quarters of total growth in the deferred air shipment category.

Another highlight of 2005 was the overall performance of the domestic air market. In the last three quarters of the year, domestic air growth exceeded that of U.S. GDP, the first time in four years that has occurred. For the full year, air shipments grew by 3.2% to 2.5 billion shipments, with gains across all market categories: letters and envelopes, packages and freight. Revenue totaled $33.6 billion, a 5% increase over 2004 levels, a phenomenon driven largely by the impact of fuel and other surcharges on the carriers’ top lines.

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TNT Logistics' position in pecking order may soon be challenged

Posted by | Aug 24, 2006 | |

TNT has announced that it is to sell its logistics division to affiliates of Apollo Management, a US private equity firm, for E1.48 billion. While the sale of the business unit has been on the cards since 2005, Datamonitor’s Chris Morgan questions whether the new TNT Logistics will be able to take part in further market consolidation which is no doubt inevitable in the short term.

In December 2005, Dutch postal group TNT made known its intention to divest its logistics division in order to focus on its core competency of express parcels and mail delivery. TNT Logistics is the second-largest player in the global contract logistics market, although Datamonitor research shows the company had a market share of just under 2% in 2005 – indicative of how highly fragmented the industry is.

Even after the recent wave of merger and acquisition activity, market leader DHL-Exel held a market share of just over 5% last year, and the current market environment makes further consolidation inevitable. While the global logistics market holds a great deal of potential for major players, without the backing of its parent company, one must question whether TNT will have the financial clout to take part in any significant merger activity in the short term.

Selling the unit to a private equity firm rather than a logistics company had been on the cards for some time. Deutsche Post World Net has only recently acquired Exel in a multi-billion euro deal, and this will take some time to fully integrate. Meanwhile, UPS’ European logistics strategy is unclear, as the purchase price would use up vital funds that could be better directed towards expansion in the less mature, higher-growth markets in the Asia-Pacific region.

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