UPS and Fedex increasing rates by 4.9% for 2010

In the latter part of November, 2009, UPS announced their new rate schedule for 2010 and with it an increase of 4.9% on ground rates. As is the usual relationship between Fedex and UPS, Fedex followed suit on Dec 3, also announcing a 4.9% increase on ground and home deliveries.

This is a whopping increase since a huge portion of these companies' earnings are from the domestic ground market in the U.S.A. Shippers should pay particular attention to the accessorial charges as well since these have also been revised and increased by both UPS and Fedex and may in fact add on an additional $2-$10 dollars per delivery.

As usual with press releases, it 's not made clear whether those shippers with special prices /contracts in place will suffer this increase or will have to re-negotiate but the trend with all logistics companies is that a general rate increase will affect everyone with few exceptions.
Below are the links to the websites
UPS Rates - 2010 Rate Change Information

Fedex Rates 2010

DHL Express goes Green for Canada

Second Review Business Analysts

India Doorstep Trade Service offered by DHL and Standard Bank

In order to save time and administration, DHL Express India and Standard Chartered Bank has launched a Door Step Trade service in those regions that have a concentrated amount of exporters utilizing finance services. No longer will documents have to be couriered to the bank's Foreign office, the documents just have to be scanned by the DHL driver and they will be transmitted directly to the correct office.

I would assume this service will have to be paid for and may only be offered to certain customers however, it is quite innovative and is designed to cut time and red tape in the export finance segmet of logistics. Read full article

Fedex continues to boost it's Asia presence

With DHL, UPS and TNT dominating courier and distribution in the Asia Pacific rim, Fedex has finally made their move to improve their infrastructure and offer upgraded business services to European locations. Lagging behind the other three in brand name recognition by the majority of users in this part of the world, Fedex hopes to boost their presence and hopefully trespass on the DHL/UPS/TNT market share. Read More

FedEx boosts Asia – Europe connection with next-business-day service

UPS Still in the Slow Lane

In 1999, UPS went public and the public as well as private sectors bought in. Now with after 40 acquisitions and large investments in China as well as the 3PL, they have, closed the perceived gaping holes in their global profile. Focusing on Supply Chain and Distribution networks in the last ten years, as well as business services such as the UPS Store, they have come a long way from being just a courier.

It is probably the most well established courier/business logistics company in North America. They are a freight forwarder as well, but these services seem to have been somewhat neglected since forwarding freight requires reliance on extra-company resources such as steamship lines, containers, and airlines. UPS of course is an airline, however they do not commit their aircraft to the normal every day forwarding as their craft have a very high revenue to cost ratio, that only courier revenue provides.

Freight Forwarding also requires an element of entrepreneurship and creativity at the desk level, as there are many milestones of the shipment and conditions that are varied and uncontrollable. It may well be that UPS with it's tight structure and organization of human resources does not lend well to this type of flexibility exercised by employees.

Having a significant part of the North American and global market share for small package and supply chain, they may have reached their saturation limit and this could be an affect on their share price. There is still much work to do for them however especially in the area of forwarding globally, those cargoes that are dependent on extra-company assets, vehicles, ships, aircraft to move.

Gathering the talent is not that hard, since they have the resources and deep pockets to pay for it. Making inroads into the market share of KN International, DB Schenker, Panalpina, DHL Global and many others is the real task and......it can't be done by a fancy commercial.

Recent article discusses UPS's weakness and strengths. At the end of the day, this huge company is still a very strong organization and a viable stock to buy.

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