MISSISSAUGA, ON: Canadian express operator Cargojet has agreed to sell up to 14.9 percent of the company to Amazon in exchange for revenue of C$600 million over a period of 7.5 years.
Amazon uses Cargojet’s overnight air network and charter aircraft services to move packages between its facilities or last mile carrier locations before final delivery to customers.
"Cargojet has been a key player in our Canadian middle mile operations for several years," commented Adam Baker, vice president Global Transportation, Amazon. "The commercial relationship the Cargojet team continues to build with Amazon has now allowed us to further strengthen and align our long-term strategic commercial interests," added Cargojet CEO Ajay Virmani.
The airline said it plans to add more non-stop flights allowing later departures and earlier arrivals to the 15 major cities it already serves, and will add new cities to its overnight network to reach approximately 95 percent of the Canadian population.
Under the agreement with Amazon.com NV Investment Holdings, Cargojet will issue warrants allowing the company to acquire up to 9.9 percent of the airline at an exercise price of C$91.78 per share vesting over six and a half years assuming new business volume worth C$400 million. Warrants for an additional five percent based on C$200 million in new revenue will be issued after the first tranche is fully vested, said the company.
ATLANTA, GA: August 06, 019. A new UPS survey of online shopping habits says customers want transparency on fees, control over the delivery process, easy returns and loyalty rewards.
UPS conducted its 2019 study in 15 countries and regions including the US, Asia, Europe, Canada, Mexico, Brazil and, for the first time, India and examined the impact Baby Boomers, Gen Xers, Millennials, and Gen Zers are having on retail trends.
Key conclusions include: 90 percent of customers research items before purchasing them online, while younger generations are most likely to be influenced by customer reviews. Ninety-five percent of all buyers expect to see all shipping fees and taxes totaled before they’ll complete the purchase.
Online shoppers want to feel valued and be rewarded and 19 percent have more than five loyalty memberships. Ninety-six percent have used a marketplace, 36 percent intend to purchase more in the next 12 months and 48 percent buy items impulsively.
Shoppers want still want choice and convenience, but they’d rather not pay for it, says UPS. Respondents say they like next-day deliveries, but will consider other options - such as lower fees or incentives - for slower shipping. Millennial shoppers are more likely to choose accelerated delivery options than other age groups, notes the survey.
Fifty-six percent of online shoppers track deliveries, with Americans the most likely. Returning merchandise remains a key demand for online shoppers with 73 percent saying the returns experience affected whether they would continue shopping with a retailer. Globally, 36 percent of online shoppers returned an item in the previous three months.
Globally, 63 percent of respondents said they returned items with the highest percentage in Europe and Asia-Pacific. Having to pay for a return annoys 24 percent of consumers, as does a delay in receiving an exchange or a replacement item (21 percent).
MEMPHIS: June 07, 2019. FedEx says it won’t be renewing its US domestic contract with Amazon.com and reiterates the e-commerce company is not its largest customer. The percentage of FedEx revenue from Amazon.com represented less than 1.3 percent of the company's total revenue for the 12-month period ended December 31, 2018.
In a statement FedEx said the decision does not impact any existing contracts between Amazon.com and other FedEx business units or relating to international services.
“There is significant demand and opportunity for growth in e-commerce which is expected to grow from 50 million to 100 million packages a day in the U.S. by 2026,” declared the Memphis-based company. “FedEx has already built out the network and capacity to serve thousands of retailers in the e-commerce space. We are excited about the future of e-commerce and our role as a leader in it.”
At the end of May FedEx Corp. announced its FedEx Ground business unit would serve the majority of the US population with a daily service from January 2020 in a bid to further serve the fast-growing e-commerce market. In addition, nearly two million FedEx SmartPost packages that were previously given to the U.S. Postal Service for delivery to homes every day increasingly will be integrated into FedEx Ground operations.
“We have made significant investments in capacity, technology and automation at FedEx Ground over the past 20 years,” commented Raj Subramaniam, president and chief operating officer, FedEx Corp. “These investments have allowed us to gain ground market share for 19 of the last 20 years, and we are now ideally positioned to extend that growth as the average daily volume for small parcels in the US is expected to double by 2026,”
LONDON: June 05, 2019. Brand Finance, an independent brand valuation consultancy, says UPS has retained its position as the world’s most valuable logistics brand followed by FedEx, Japan Rail, DHL and Union Pacific Railroad in an unchanged Top 5.
Rounding out the Top 10, BNSF remained in sixth position, France’s La Poste moved up to No.7 from No.12, US supply chain company McLane dropped one place to to eighth, Deutsche Post rose from No.10 to No.09 and CSX rose one position to No.10.
Brand Finance calculates the values of the brands in its league tables using the ‘Royalty Relief’ approach – a brand valuation method compliant with the industry standards set in ISO 10668. This involves estimating the likely future revenues that are attributable to a brand by calculating a royalty rate that would be charged for its use, to arrive at a brand value understood as a net economic benefit that a licensor would achieve by licensing the brand in the open market.
Based on this criteria, the company says UPS’s brand value has risen 33 percent in the past 12 months to a record US$29.3 billion, following further investment in reducing its carbon footprint and in drone technology.
FedEx mirrors the UPS brand value increase of 33 percent to total US$24.2billion during the period, as the company continues to promote itself as not just about packages, but also about what deliveries mean for the people shipping and receiving them.
Despite Amazon’s ongoing investments to reduce logistics costs, it has not had an impact on the value of the major logistics brands according to Brand Finance CEO David Haigh.
“Outstanding performances from FedEx and UPS reinforce the US dominance in the logistics industry. With vast areas to supply, both at home and abroad, the US brands are adept in addressing and resolving complex situations for customers seeking swift delivery solutions.
“E-commerce, insurance ventures, adaptability and emotional intelligence are heightening brand values for other players in this growing sector,” he added.
The biggest improvers over the past 12 months in the Brand Finance Top 25 are France’s Bolloré Logistics, up 50.9 percent to just over US$2 billion and No.21; La Poste, up 48.6 percent to US$5.5 billion and the aforementioned No.7 position; and Maersk, up 43.2 percent to US$4.4 billion and No.12.
Meanwhile DSV lost 6.8 percent of its brand value during the period dropping to US$1.5 billion and the No.24 position – despite agreeing to acquire Panalpina.
Brand Finance says it helped craft the standard on Brand Valuation – ISO 10668, and the recently-approved standard on Brand Evaluation – ISO 20671.
MEMPHIS: FedEx Corp. is to spend US$1 billion on modernizing and expanding its hub operation. Construction is expected to begin in 2019 and be completed by 2025.
The project includes a new large sort facility and installation of state-of-the-art sort systems, construction of a bulk truck load building, and a new area to improve handling of the oversized shipments that have increased with the growth in e-commerce.
Tennessee governor Bill Haslam commented: “FedEx is known for delivering results across the globe, so we are incredibly grateful it calls Tennessee home and is doubling down here with this major investment.
“As the Memphis area’s largest employer, and a major economic driver across the state, this investment reflects FedEx’s continued commitment to Tennessee and will benefit current employees and the future workforce for years to come,” he added.
Of an estimated 30,000 FedEx employees in the Memphis area, the hub is supported by a workforce of 11,000 who operate 163 aircraft gates, process 47 percent of total FedEx volume and 69 percent of U.S. domestic volume each business day.
FedEx chairman and CEO Fred Smith noted: “Modernization and expansion of the Memphis hub will ensure that we continue to provide outstanding service to our customers around the world and make this an even better place to work for the thousands of team members here who keep our operations running every day and night.”
COPENHAGEN: November 23, 2018. The European Environment Agency (EEA) says greenhouse gas emissions from transport have increased in the EU since 2014.
Preliminary EEA estimates for 2017 put EU transport emissions at 28 percent above 1990 levels, indicating the sector won’t meet its long-term climate goals.
In its latest report on the impact of electric vehicles, the EEA says “reducing oil consumption in transport remains a challenge” with only Austria and Sweden achieving the EU's renewable energy reduction target of 10 percent in transport by 2020.
Other findings from the report include: The average CO2 emissions of new passenger cars in the EU increased by 0.4 percent last year – the first time since monitoring started in 2010. By contrast emissions from new light commercial vehicles continued to fall in 2017, showing the largest annual decrease since 2012.
Registrations of battery electric vehicles increased by 51 percent last year – but still only 0.6 percent of all new registrations. Plug-in hybrid electric vehicle registrations rose 35 percent, or 0.8 percent of new registrations.
In 2017 petrol car registrations exceeded diesel (53 percent versus 45 percent respectively) for the first time since the monitoring started.
The EEA report confirms that electric vehicle emissions, with the current EU energy mix and over the entire vehicle life cycle, are “about 17-30 percent lower than the emissions of petrol and diesel cars”.
However this comparison is less favourable when considering the impact of electric car and truck production on ecosystems and the toxicity of the materials involved. The EEA suggests manufacturers could avoid the continued extraction and processing of copper, nickel and critical raw materials used in electric cars by adopting the circular economy approach of recycle, remake and reuse - particularly batteries.
In a related announcement, FedEx Express is adding 1,000 electric vehicles to its US delivery fleet with the purchase of 100 vehicles from Chanje Energy and the leasing of 900 from Ryder System. The 6,000 lbs-capacity vehicles are manufactured by FDG in Hangzhou and can travel 150 miles when fully charged and will save FedEx 20 tons of CO2 emissions and 2,000 gallons of fuel per vehicle, per year.
“FedEx continually seeks new ways to maximize operational efficiency, minimize impacts and find innovative solutions through the company’s Reduce, Replace, Revolutionize approach to sustainability,” commented Mitch Jackson, the company’s chief sustainability officer.
LONDON: March 06, 2018. According to Brand Finance (BF), an independent brand valuation and strategy consultancy, UPS remains the world's most valuable logistics brand, despite a one percent year-on-year drop in brand value to US$22.0 billion.
BF calculates the brand value (BV) of 25 logistics companies using the 'Royalty Relief' approach that estimates future revenues attributable to a brand by calculating a royalty rate that would be charged for its use.
Based on this methodology, FedEx remains in No.2 position with a BV of US$18.17 billion, up 6.0 percent in the past 12 months; followed by Japan Railways (US$11.01 billion), down nine percent; DHL (US$10.7 billion), a rise of five percent; Union Pacific (US$7.87 billion), minus two percent; Mclane (US$4.88 billion), no change; Post Italiane (US$4.84 billion), plus 20 percent; Canadian National Railway (US$4.41 billion), up 16 percent; Deutsche Post (US$4.25 billion), an increase of 29 percent; and CSX (US$4.00 billion), rounding out the top ten places at plus 4.0 percent.
BF suggests the top six brands stagnated last year with aggregate brand value growth of just 0.2 percent between them - despite increased online retailing and consequent demand for delivery services.
"There is no doubt that forging a distinct brand helps a business to build resilience," commented BF managing director Richard Haigh. "As Amazon prepares to launch 'Shipping with Amazon', having a strong brand can help protect incumbents from this new competition.
"Powerful brands alone will not be enough to prevent Amazon from gaining a foothold in the industry, however they will allow breathing room for the existing brands to riposte and limit their loss of market share," he added.
Largely driven by expected business growth and focus on serving domestic markets, China Railways Signal & Communication Corporation (CRSC) increased its brand value 54 percent (to US$1.3 billion) last year, while Shanghai International Port (SIPG) rose 47 percent (to US$1.2 billion) to place 24th and 25th respectively on the BF league table. Bolloré Logistics was the third first-time entrant in 23rd position.
Britain's Royal Mail dropped 20 percent in brand value to US$2.2 billion last year because of declining letter delivery and "fierce competition" from other delivery services, while France's La Poste (down 6.0 percent to US$3.7 billion) faces similar challenges. This is in contrast to Poste Italiane and Deutsche Post that have recorded significant brand value growth in the past year, according to BF.
Other winners and losers last year included Viterra (up 65 percent) and Kuehne + Nagel (up 43 percent), while BNSF and C.H. Robinson saw their respective BV drop 14 percent and 11 percent in 2017.
SHANGHAI: October 26, 2018. Deutsche Post DHL (DPDHL) has partnered with S.F. Holding to expand its supply chain operations in China. As part of the deal, the German company will receive an initial €700 million payment plus a revenue-based fee for the next decade.
The co-branded agreement relates to DHL’s supply chain business in Mainland China, Hong Kong and Macau and has no impact on its international express, freight transport and e-commerce logistics solutions in China.
DPDHL will provide S.F. Holding with supply chain services, management expertise, transportation and warehousing technology under the leadership of Yin Zou, the current DHL Supply Chain CEO for Greater China together with his existing management team.
“S.F. Holding’s local market expertise in China has real advantages for our customers across all industries including technology, healthcare, retail, automotive, and e-commerce,” said DPDHL CEO Frank Appel. “Combined with our global operations standards and network support, the agreement provides a solid foundation to continue exploring further opportunities in China in the coming years.”
The partnership is expected to leverage the Chinese company’s extensive domestic infrastructure, distribution network and broad base of local customers.
“S.F. Holding has been actively expanding its business-to-business capabilities and pursuing different strategic partnerships to grow into a truly integrated logistics solutions provider that delivers best-in-class services for our clients,” explained chairman Dick Wong. “This partnership agreement will strengthen our capability in providing supply chain services to a diverse realm of industries and allow us to bring world-class management expertise into our supply chain business operations.”
Last year China's Ministry of Commerce approved a joint venture between UPS and SF Holding to combine 13,000 service points across 331 cities in China with the UPS network in 220 countries.
Since then the two companies have been providing an international delivery service from China to the US that was enhanced in September when Atlas Air Worldwide Holdings signed an ACMI deal with SF Express to provide B747 freighter capacity between the two countries.
(Pictured left to right: Julie Zhu, CFO, Greater China, DHL Supply Chain; Jeffrey Chan, Chief Strategy Officer, S.F. Holding; Dick Wong, chairman, S.F. Holding; John Gilbert, Global CEO, DHL Supply Chain; Pablo Ciano, executive vice president, head of Corporate Development, Deutsche Post DHL Group; and Yin Zou, CEO, Greater China, DHL Supply Chain.)
MEMPHIS: February 26, 2018. FedEx Corporation has responded to comments relating to its apparent support for the National Rifle Association (NRA) following the killing of 17 students and staff at the Marjory Stoneman Douglas High School in Parkland, Florida on February 14.
Last week Delta Air Lines and United Airlines were among several corporations that announced they would be ending NRA discounted rates for services.
In a statement FedEx said its position on the issues of gun policy and safety differ from those of the NRA:
"FedEx opposes assault rifles being in the hands of civilians. While we strongly support the constitutional right of U.S. citizens to own firearms subject to appropriate background checks, FedEx views assault rifles and large capacity magazines as an inherent potential danger to schools, workplaces, and communities when such weapons are misused.
"We therefore support restricting them to the military. Most important, FedEx believes urgent action is required at the local, state, and Federal level to protect schools and students from incidents such as the horrific tragedy in Florida on February 14.
"FedEx is a common carrier under Federal law and therefore does not and will not deny service or discriminate against any legal entity regardless of their policy positions or political views.
"The NRA is one of hundreds of organizations in our alliances/association Marketing program whose members receive discounted rates for FedEx shipping. FedEx has never set or changed rates for any of our millions of customers around the world in response to their politics, beliefs or positions on issues."
On February 24 Delta announced the airline would end its contract for discounted fares for travel to the NRA's 2018 annual meeting and requested the association remove Delta's information from its meeting website.
"Delta's decision reflects the airline's neutral status in the current national debate over gun control amid recent school shootings. Out of respect for our customers and employees on both sides, Delta has taken this action to refrain from entering this debate and focus on its business. Delta continues to support the 2nd Amendment," it declared.
Republican politicians in Delta Air Lines' home state of Georgia responded with threats to "kill" a proposed US$40 million tax break for the carrier unless it rescinded its decision.
Georgia Lieutenant Governor Casey Cagle reportedly tweeted: "I will kill any tax legislation that benefits Delta unless the company changes its position and fully reinstates its relationship with the NRA. Corporations cannot attack conservatives and expect us not to fight back."
BONN: October 18, 2018. DHL Express has moved up two places to finish sixth on the 2018 Top 25 Great Place to Work/Fortune Magazine index. It is the only transportation company to be included.
Every year, Great Place to Work, a global people analytics and consulting firm, assesses the work experience of employees through its certification programme. Top of the list this year was IT company Salesforce followed by Hilton, Mars, Intuit and the Swiss-based professional services Adecco Group.
“At DHL Express, we build our business strategy around our motivated people”, says DHL Express CEO Ken Allen. “We believe that employee motivation directly results in customer satisfaction and loyalty which brings business success. Our more than 100,000 employees are the biggest asset we have. This is why it is amazing to see that our investment in our people shows a sustainable impact.”
Over 7,000 organizations participated in the survey process, representing 12 million employees worldwide. The assessment is based on the core criterion of trust and analyses the relationship of employees with management, other employees and to their jobs.
“Congratulations to the World’s Best workplaces. It is a big challenge to build a high-trust culture that is great for employees in many countries across the globe,” noted Great Place to Work CEO Michael Bush. “These organisations have bold leaders who have risen to the challenge - they are the vanguard showing millions of organizations worldwide that is possible and desirable to create a great place to work for all.”
Apparently one of the places is based at Leipzig-Halle airport, where DHL has a major hub and sort centre. The airport is budgeting €250 million to expand taxiways and an apron area that will total 67 hectares. The expansion is rnecessary due to the increase in DHL Express volume that has reached 350,000 pieces a night.
The parking area was opened in 2007 and expanded in 2010 to accommodate 60 aircraft. if approved by the State of Saxony, the new extension would provide space for 36 more airplanes, including the A330 freighter.
“The long-term commitment by DHL at Leipzig/Halle Airport was the crucial factor in ensuring that the airport would become an airfreight and logistics site of European significance and a growth engine for the Central German region,” explained airport managing director Johannes Jähn.
“The fact that we can now deliberately tap into existing reserve space is a significant advantage at our airport site and this forms the basis for growth that meets demand. As with previous expansion projects, we’ve not only kept our eye on the development of the airport as an air traffic and logistics site in our planning work, but also the extensive protection of people and the natural environment,” he added.
BONN/CRANFIELD, UK: February 26, 2018. DHL Express and the Cranfield School of Management have published a practical guide on the BtB potential for international e-commerce.
According to Forrester Research. B2B transactions are expected to reach US$1.2 trillion within the next five years.
Based on a combination of desk research and in-depth interviews, the guide identifies five features essential to B2B e-commerce platforms: digital infrastructure, customer experience, customer personalization, seamless integration and synchronization of logistics.
Professor Michael Bourlakis, chair in Logistics & Supply Chain Management at Cranfield University, said the research had revealed three types of e-commerce companies – novices, intermediates and innovators.
"Novices, for example, have just begun to dip their toes in the water when it comes to e-commerce and have basic functionality on their websites. Innovators, on the other hand, have sophisticated offerings and employ advanced technologies – such as machine learning and virtual reality – to better anticipate customer requirements and offer personalized experiences."
The DHL/Cranfield white paper also offers practical recommendations such as using business intelligence tools to capture better data and enhance customer insights, and looking at the supply chains of major retailers for inspiration when developing omni-channel sales networks - combining brick and mortar and web or mobile shops.
"We have seen B2C e-commerce grow at a faster pace than most other industry sectors in recent years, with premium cross-border shipments growing from 10 percent to more than 20 percent of the volumes of DHL Express," added Ken Allen, CEO, DHL Express. "As this study shows, there is the same potential for cross-border B2B e-commerce to grow at a dynamic pace."
