FedEx Freight has opened a service center in Newburgh, New York, to significantly expand the carrier’s capacity in the Northeast. The new service gives shippers next-day and second-day service throughout the Northeast as far south as Baltimore. The 48-acre facility is located 40 miles north of New York City and is equipped with 120 doors and a three-bay maintenance shop.
Read MoreSeveral airlines have begun competing for mail business under a series of new U.S. Postal Service performance-based contracts. But optimism about significant revenue improvements is tempered by ongoing passenger airline security restrictions on parcel size mail and volume declines in the postal service’s air express products. The new contracts are a departure from the old practice of equally sharing business among air carriers, and part of the U.S. Postal Service’s effort to transform itself into a modem, cost efficient, self-sustaining enterprise. USPS said it expects the contracts, which became effective June 28, to increase efficiency and improve service.
“It’s the most dynamic change in 20 years,” USPS spokesman Mark Saunders said. “Up until now the airlines have looked at this business as a given. Now they have to earn it. If they don’t perform, they will lose it to their competitors.” USPS uses more than 15,000 commercial passenger, flights to move about 170 million pieces of mail each day. Direct marketers depend heavily on the USPS for parcel, expedited and global delivery services.
Read MoreAsserting that its competitors “will stop at nothing to prevent competition,” Astar Air Cargo, formerly DHL Airways, urged the U.S. Department of Transportation to reject a joint request from FedEx and United Parcel Service to refer the probe of Astar’s ownership to the agency’s inspector general. Astar charged that its opponents were pulling out all the stops to delay a resolution of the controversial case.
Read MoreFedEx and United Parcel Service want the Department of Transportation’s inspector general to review the controversial inquiry into the ownership of the former DHL Airways. The inspector general, Kenneth Mead, issued a report earlier this year that was highly critical of DOT’s prior handling of complaints by FedEx and UPS that Deutsche Post World Net and DHL International illegally controlled DHL Airways, now Astar Air Cargo, which operates 40 aircraft on U.S. domestic routes.
Read MoreDeutsche Post’s freshly reiterated expansion plans in the US are encountering fierce resistance from the dominant players in the North American parcel delivery market, UPS and FedEx. But US market forces could present a larger and more difficult hurdle than anything that UPS and FedEx can throw at Deutsche Post in court.
Deutsche Post World Net, the German postal and logistics provider, has pledged to prevent its US competitors from derailing its expansion plans in the US package delivery market. Speaking at a press conference announcing the company’s first-half earnings, Deutsche Post’s chief executive Klaus Zumwinkel said business remained strong despite continued economic weakness in Germany. He also reiterated plans to expand into the US delivery market, in what could be viewed as a message for rivals UPS and FedEx.
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