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Read MoreTag: Worldwide
Kuehne + Nagel International AG – Half-year result 2008
Kuehne + Nagel Group achieved growth above the market average and delivered good results in the first half of 2008. Compared with the previous year’s period, turnover grew by 7.3 per cent (10.3 per cent excluding currency impact and acquisitions) to CHF 10,700 million. EBITDA improved by 12.3 per cent (15.7 per cent excluding currency impact and acquisitions) to CHF 530 million; the margin rose from 4.7 to 5.0 per cent. Net earnings increased by 14.5 per cent (20.6 per cent excluding currency impact and acquisitions) to CHF 308 million.
Seafreight
The continuing credit crisis in the United States, the rising cost of oil and other commodities, and dampened consumer spending slowed global
container market growth to between 4 and 5 per cent. Nonetheless Kuehne + Nagel, with its worldwide network and value-adding services, increased container volumes by 7.4 per cent. The Group achieved strong growth on trade from North America to Europe and Asia. Growth on the Asia to Europe trades, however, slowed. The strong demand for the company’s seafreight information logistics solutions, alongside productivity increases and strict cost management, contributed to a 12.2 per cent improvement of the operational result. At 4.3 per cent the EBITDA margin was above the previous year (4.2 per cent).
Airfreight
The global airfreight market, affected by unprecedented fuel prices and the slowing economy, grew under 3 per cent. While Kuehne + Nagel also registered slower growth in the second quarter, it increased tonnage by 11.4 per cent for the first half of the year. Cost efficiencies, new contracts and growing existing accounts were crucial to this good performance, which is also reflected in the operational result’s 20.6 per cent improvement. The EBITDA margin reached a record 6.1 per cent (2007: 5.6 per cent).
Road & Rail Logistics
In the overland business, existing accounts grew and shipment volumes significantly increased as the breadth of services and the company’s European network expanded. Distribution solutions dedicated to the high-tech industry developed significantly, contributing to a net turnover up 13.8 per cent, compared with the first half of 2007. Better capacity utilisation helped raise the operational result by 8.7 per cent. Despite continued investment in a standardised operational software, the EBITDA margin remained stable at 1.7 per cent. The integration of Cordes & Simon and G.L. Kayser, acquired in 2007, is progressing to plan. Acquisitions in southwest Europe, further strengthening this business, may be expected in the second half of the year.
Contract Logistics
The contract logistics business unit benefited from its global focus, with business remaining stable at a high level despite economic uncertainties. Net turnover increased by 5.9 per cent (10.3 per cent excluding currency impact and acquisitions). Major contracts with Airbus and Beiersdorf illustrate Kuehne + Nagel’s good market position and innovative strength in this business. Strict cost management helped leverage the operational result by 11.0 per cent. The margin increased from 5.2 to 5.5 per cent.
Outlook
Considering the unfavourable economic forecast for the second half of 2008, the Management Board of Kuehne + Nagel International AG anticipates slower growth rates in the logistics market. Due to its global network and comprehensive portfolio of services, the company will nonetheless benefit from globalisation and the expected shifts in goods flows. High flexibility, transparent cost structures and a strong financial foundation enable the Group to quickly adapt to change and consistently maximise business opportunities.
Postal department ropes in Ogilvy & Mather (India)
The Department of Post has stepped into a high gear for a total revamp of its image. It has partnered with Ogilvy and Mather (O&M) to help design a new logo and new uniforms to keep up with its new image.
This project christened “Project Arrow” has been launched to initially upgrade 500 post offices, across 10 circles, mostly in rural areas, by the end of this calendar year.
Under the project, 500 post offices will receive a makeover, to represent the standardisation of quality. The department of posts has developed standardised and consistent interior and exterior blueprints for 500 post offices and will install uniform modular furniture across the post offices.
All the mails and parcels will henceforth be tracked till the time they are not delivered to the desired destination. “The first phase of this project covering 50 post offices will be flagged off on the 15th of August.
The rest of the 450 will be completed by the end of December,” said Scindia. “After gauging the success of this pilot project, we hope to implement this in the rest of the post offices across the country,” he added. At present, there are over 1,55,000 post offices, of which 26,000 are department post offices.
The minister also pointed out that over 500 postal employees have undergone training to provide the best service to customers.
Specialised training package for these 500 post offices have been designed and training has been initiated. Meanwhile, all the post offices under the project will be broadband-enabled, for technological upgrade of these post offices.
However, only over 20 per cent of the total mailing comprises personal mailing, which has been affected by the increased teledensity in the country and decreasing call rates by mobile phone operators. The increased usage of emails has also affected the personal mailing segment of the postal department.
Though the minister did not comment on the funds invested in Project Arrow, he said the funds were accounted for in the Budget and have been invested through internal accruals.
Read MoreInternational Freight Industry to shift from air transport to sea and rail
Australia Post’s Managing Director, Graeme John, foresees cutbacks on flights and a shift towards sea and rail deliveries with regard to the annual meeting of the Kahala Posts Group last week.
John said that growth in international freight from consumer goods such as electronics had been managed on a “just in time” basis, with air delivery preferred to other means of transport due to its speed advantage. But that approach was no longer viable as global warming would have an enormous influence on the postal industry worldwide increasing the pressure to shift towards less environmentally-damaging modes of delivery.
The Kahala Posts Group (KPG) which is the alliance of nine national postal administrations in Australia, the United States, Hong Kong, Japan, South Korea, Spain, France and Britain, was founded five years ago and named after a resort the members stayed at during their founding meeting in Hawaii. The postal operators have since launched an upgraded, guarantee-based international service between their respective countries and territories.
Therefore, Kahala Group focused instead on reliability of delivery. But to keep the reliability of the service, 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 time window during which a parcel would be delivered, Brisbane Times further reported.
While the private couriers already offered that service and faster delivery, the Kahala members undercut their prices by 40 pct to 50 pct to stay competitive in price.
John further said that 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, Brisbane Times added.
Read MoreUPU Geneva Conference Proposals: Potential Implications for U.S. Consumers and Markets
According to one 2008 UPU publication, 69 percent of the world’s permanent or mobile post offices offer financial services. Funding initiatives that would provide advantages for state postal monopolies to enter sectors already served by the private sector, such as financial services, would not benefit U.S. consumers and markets. They also place monopoly consumers at increased peril of being overcharged to finance such new ventures.
As discussed in the U.S. Strategic Plan for the UPU presented at this Committee’s meeting in March, it is a primary goal that the UPU “promote and encourage unrestricted and undistorted competition in the provision of international postal … and delivery services.”
Several proposals and documents discuss an expanded involvement for the UPU into the financial services sector, an expansion the United States should view with considerable concern. These include:
• The Postal Operations Council Report, Document 23, puts forward a definition of the postal sector including a financial dimension, specifically discussing credit cards, savings products and pension payments.
• UPU Proposal 10, “Postal Financial Services Development” instructs the Postal Operations Council and the International Bureau to “meet the demands of the changing environment” by, among other things, “promoting anti-money-laundering activities” and “recommending the introduction of new financial services which could be offered via the worldwide postal network.” According to the U.S. Strategic Plan for the UPU, it should be ensured that policies comply with U.S. anti-money laundering policies and other regulatory requirements.
• Document 27A, Council of Administration Report, discusses the “Connect the World” initiative proposed to be completed by 2015. As described, the initiative would develop postal financial services, and in particular money transfers, through partnerships between governments, the private sector and international organizations.
Other Sectors
The Postal Operations Council report discusses other areas, such as parcels, express and logistics services, each with an articulated future role for the UPU, particularly in developing markets and business development.
For instance, it cites logistics, and specifically the “strong growth area” of outsourced warehouse-to-customer logistics functions. In 28 percent of UPU member countries, national posts currently offer logistics services, according to the UPU. “Issues of corporate freedom and competencies to develop these services [by national posts] will be limiting factors, unless they are suitably addressed,” the report states.
Proposal 28 concerns climate change and sustainable development and includes the producing publications for postal administrations on the subject and, “developing Socially Responsible Investing products, microcredits for postal administrations that carry out banking activities, and reliable, affordable fund transfer services for migrant workers and their families.” It then outlines a future role for the UPU as an active contributor to market development, undertaking robust market analysis while working with all stakeholder groups.
Proposal 37 from the Postal Operations Council seeks to advance postal market development goals. It would specifically instruct the council to “facilitate the growth of letter post, parcels and postal financial services markets, as well as business services, logistics and E-business, including hybrid mail, E-shopping, electronic postal certification and dot.post.” It also instructs the council to increase capabilities and create or maintain business relationships and partnerships to facilitate such growth.”
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