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ATLANTA: The U.S. Teamsters Union has joined a broad-based coalition of 84 investor, public interest and civil rights groups to persuade the United Parcel Service (UPS) to cut its ties with the controversial American Legislative Exchange Council (ALEC).

Launched in 1973, ALEC says it is a think-tank that provides a "constructive forum for state legislators and private sector leaders to discuss and exchange practical, state-level public policy issues. It also develops model policies and resolutions on economic issues".

However according to public interest non-profit SourceWatch, ALEC is a corporate "bill mill" dominated by Republican politicians that enables corporations to provide state legislators wishlists that benefit their bottom line: "Corporations fund almost all of ALEC's operations and pay for a seat on [its] task forces where corporate lobbyists and special interest reps vote with elected officials to approve 'model' bills," claims SourceWatch.

Teamsters AlecAs of August 2015, at least 106 corporations have now either cut ties with ALEC or will do so says the non-profit. Shell became the latest departure when, on August 07, it declared: "Alec [sic] advocates for specific economic growth initiatives, but its stance on climate change is clearly inconsistent with our own...We have long recognized both the importance of the climate challenge and the critical role energy has in determining quality of life for people across the world. As part of an ongoing review of memberships and affiliations, we will be letting our association with Alec lapse when the current contracted term ends early next year."

Google, a former member of the ALEC Communications and Technology Task Force, said last year it would not renew its membership. Chairman Eric Schmidt, declared in November 2014: "The company has a very strong view that we should make decisions in politics based on facts - what a shock. And the facts of climate change are not in question anymore. Everyone understands climate change is occurring and the people who oppose it are really hurting our children and our grandchildren and making the world a much worse place. And so we should not be aligned with such people -- they're just, they're just literally lying."

Now the Teamsters want UPS to join a corporate list that also includes Union Pacific, Facebook, Microsoft, Yelp, Yahoo, eBay, AOL, SAP, International Paper, Occidental Petroleum, Northrop Grumman, BP, T-Mobile and Canadian National Railway.

The union says many of these companies have left over concerns that "ALEC's harmful views conflicted with their corporate social responsibility policies. These extreme views, which include defunding public services, worker misclassification, and denying the science of climate change, also conflict with UPS's corporate values," it adds.

Currently, the Teamsters have 250,000 members employed at UPS's package and freight divisions and the company remains its largest corporate employer in America.

"Global corporations like Coca Cola, Apple, McDonald's and even Walmart have decided that continuing a relationship with this toxic organization is too damaging to their brand," said Ken Hall, Teamsters general secretary-treasurer and Package Division director. "It begs the question of why UPS, the largest unionized company in America, continues to associate with ALEC. It's time for UPS to do the right thing for its workers and cut ties with ALEC."

To date, UPS has not responded to the request from its largest single employee group.

HOOFDDORP: TNT Express has confirmed the unanimous acceptance by its two Boards of a US$4.8 billion cash offer from Federal Express to acquire the company, subject to 95 percent uptake by shareholders and regulatory approval in Europe, Brazil, China and the U.S.

TNT Express GermanyThe European Commission says it expects to complete its in-depth analysis of the offer by January 13, 2016 before reaching a decision on whether to grant anti-trust approval.

The acquisition, if successful, is expected to complete during the first half of 2016 at which time David Binks, FedEx regional president Europe, would replace current TNT Express CEO Tex Gunning. Mark Allen, FedEx senior vice president, Legal International would also join the executive team. Current TNT Express CFO Maarten de Vries would remain in office for a period of six months following the acquisition completion.

"This is an important transaction for FedEx, and the offer represents positive news for all stakeholders," said Binks. "We believe the combination will provide significant value to both companies and both sets of shareholders. FedEx is delighted by the unanimous support from the executive board and the supervisory board."

In a joint statement, the companies said Hoofddorp, near Amsterdam would become the European regional headquarters of the proposed new unit and the Liege hub maintained as a "significant operation". Prior to deal completion, TNT Express' air carrier operations will be divested to resolve European airline ownership regulations and where permitted its intercontinental air operations will transition to FedEx. The TNT Express brand will be retained for an "appropriate period" said the statement.

After successful completion of the offer, the new TNT Express supervisory board would comprise of three FedEx executives - David Cunningham (FedEx president Asia Pacific), Christine Richards (FedEx Corp. EVP), and David Bronczek (FedEx Express CEO) - and the two current independent members, Margot Scheltema and Shemaya Levy Chocron.

SEATTLE: Amazon.com, which reported a 20 percent increase in net sales to US$23.18 billion for the second quarter of 2015, has expanded its 'Prime Now' members-only delivery service to Birmingham, UK following a London launch in June this year.

The company's operating income swung from a loss of US$15 million last year to a massive US$464 million gain in Q2 and resulted in a net profit of US$92 million compared to a loss of US$124 million year-on-year.amazon 2

Prime Now offers one-hour delivery on thousands of products from daily essentials to consumer items and sports goods via a mobile app. The company says its fastest London delivery to date is a Netgear Wi-Fi Range Extender that took just 12 minutes from order capture.

The Prime service is backed by Amazon's UK network of eight fulfillment centres that cover 20 million sq.ft. and employ 7,000 people. The company says its 'Amazon Logistics' program has created more than 2,000 new jobs for local and regional delivery companies.

According to David Jinks, an executive at e-commerce delivery company ParcelHero: 'For Amazon's long-suffering investors, it has always been the promise of 'jam tomorrow' that has kept them holding on, through the considerable expense of building a radical new supply chain. Now that Amazon's logistics arm is finally in place, its shareholders can finally enjoy their jam today."

Commenting on Amazon's Q2 profit Jinks added: '"The secret behind these surprise profits is that Amazon continually invested significant sums in order to deliver its new logistics arm. With Amazon Logistics in place it can service its Prime members, a hugely loyal and lucrative market. It can now deliver Prime Same Day, Same Hour and even Fresh services in many areas of the US and also - thanks to its warehouse investment - in London as well; bypassing traditional delivery companies such as FedEx, UPS and the UK's Royal Mail."

ATLANTA: UPS, which reported a second quarter net profit of US$1.2 billion on revenue of US$14 billion on July 28, is to buy Chicago-based truckload broker Coyote Logistics for US$1.8 billion.

Founded in 2006, Coyote arranges U.S. truckload and less-than-truckload shipments for the food and beverage, consumer goods, paper, packaging, industrial and retail segments. Last year the company reported revenue of US$2.1 billion.

UPS said the acquisition complements its supply chain and freight services that reported a 4.5 percent drop in Q2 revenue to US$2.2 billion.

"The brokered full-truckload freight segment is a high growth market and we expect it will continue to outpace other transportation segments," said UPS CEO David Abney. "This high quality acquisition significantly increases UPS full-truckload scale and we are uniquely positioned to take advantage of exciting new revenue growth and synergy opportunities."

Coyote 2UPS said it had considerable synergy with Coyote including the addition of 35,000 carriers and 12,000 customers; an innovative ability to optimize networks and enable back-haul solutions; proprietary IT systems; a very experienced management team that will remain in place; and an asset-light, technology-driven business model.

"In addition to the core profitability of Coyote, UPS is well positioned to realize a run-rate of US$100 to US$150 million of annual operating synergies, from backhaul utilization, purchased transportation and cross-selling opportunities," added Abney.

Acknowledging that Coyote "possesses significant industry knowledge, intellectual property, employee talent, and has a strong company culture", UPS said the company would continue to operate as a subsidiary with the current management team that includes CEO Jeff Silver and COO Jim Sharman.

Commenting on the sale, Silver said: "The Coyote management team is very excited to become a part of UPS and continue to grow, now with UPS's support. Our great people, leading technology and flexible organization will enable us to scale quickly to take full advantage of the added customers, lanes and capacity within UPS. It's a great day for Coyote employees, our customers and our contracted carriers."

MEMPHIS: In anticipation of FedEx Corp. CEO Fred Smith's 71st birthday in August, the company has changed its corporate governance guidelines to increase the mandatory retirement age for directors from age 72 to age 75 with immediate effect.

Smith has expressed no desire to leave the company he founded in 1971 with a fleet of Falcon jets (below) and has led for the past 44 years.

Fred Smith Falcon Jet"This change is consistent with the market trend of increasing the mandatory retirement age for board members," said David P. Steiner, FedEx Corporation's Lead independent director and CEO of Waste Management Inc.

FedEx has reported revenue of US$47.5 billion for the 12 months ending May 31 – up from US$45.6 billion in the previous fiscal year. Adjusted net profit rose from US$2.19 billion to US$2.57 billion. The operating margin increased to 9.0 percent from 7.9 percent.

"Fiscal 2015 was a transformative year for FedEx with outstanding financial results driving expanded long-term value for shareowners," commented Smith. "Significant acquisitions announced in the year promise to strengthen our portfolio of services and change what's possible for customers. I am very proud of the FedEx team for its accomplishments and look forward to a successful fiscal 2016."

According to Alan Graf, FedEx Corp. executive vice president and chief financial officer, the company expects strong earnings growth in its next fiscal year separate from any operating results or costs related to the planned acquisition of TNT Express.

Capital spending is expected to be US$4.6 billion for the next 12 months as the company expands its FedEx Ground network and takes delivery of new aircraft for FedEx Express.

During its fiscal fourth quarter FedEx Express incurred an impairment charge of US$276 million as it retired 15 aircraft and 21 related engines and adjusted the retirement schedule of an additional 23 aircraft and 57 engines.

TNT Erskine 2AMSTERDAM: TNT has reported revenue of €3.8 billion for the first six months of 2015 – up 3.8 percent year-on-year. Operating income fell 55.6 percent to €8 million largely due to restructuring costs and the company posted a net loss of €20 million for the period.

Adjusted operating income in the first half was €42 million, down 62.8 percent from 2014 H1. The company cited transition costs related to its "Outlook" business plan, lower volumes from international accounts as well as pricing pressures.

Commenting on the results, TNT CEO Tex Gunning said the company was achieving good growth in its SME segment "after years of decline" thanks to improvements in service levels.

Noting the proposed acquisition of TNT by FedEx remains "a very positive development for all our stakeholders", he cautioned 2015 would be a "transition year in terms of bottom-line performance", with TNT posting restructuring charges of €25-€30 million in the third quarter.

"As for the macro economic backdrop, we have experienced some positive developments in Western Europe, but we remain cautious given the economic volatility in China, Brazil, Australia and Greece," he added.

Second-quarter revenue was €1.75 billion, up 6.2 percent year-on-year, and the operating income was €19 million, an increase from €3 million in the same period last year.

During the period the company said it continued to invest in sorting machinery, vehicles and IT. In addition to Liege, TNT is completing new facilities in Madrid, Eindhoven, Swindon (UK), Brisbane and Melbourne, all of which will enter operations during the second half of this year.

On July 01 the company outsourced its business processing to Accenture under a five-year contract. On July 30 it announced the start of a five times a week service between Liege via Marseilles to Tunis using a B737-400 aircraft. Tunisia is the latest in a series of new destinations that have included Malta, Tel Aviv, Venice and Hannover.

WASHINGTON, DC: The U.S. Department of Justice (DoJ) says UPS is to pay US$25 million to resolve allegations that it submitted false claims for Next Day Air deliveries to "hundreds of federal agencies".

The settlement covers a period from 2004 to 2014 when the company allegedly hid its failure to comply with delivery guarantees under contracts with the U.S. General Services Administration and the U.S. Transport Command. As a result, the DoJ says customers not only got packages delivered late, they weren't able to request refunds for late delivery.

UPS delivering disaster recoveryThe government claims UPS knowingly recorded inaccurate delivery times on packages to make it appear that the packages were delivered on time, applied inapplicable "exception codes" to excuse late delivery (such as "security delay," "customer not in," or "business closed"), and provided inaccurate "on-time" performance data under the federal contracts.

The civil settlement resolves a lawsuit filed under the whistleblower provision of the U.S. False Claims Act, which allows individuals to file suit on behalf of the United States for false claims and obtain a portion of the government's recovery. Typically, they can receive anything from 10-30 percent of the total. In this case, former UPS employee Robert Fulk, who filed the lawsuit in Virginia, gets US$3.75 million.

"Protecting the federal procurement process from false claims is central to the mission of the Department of Justice," said principal deputy assistant Attorney General Benjamin Mizer. "We will continue to ensure that when federal monies are used to purchase commercial services the government receives the prices and services to which it is entitled."

In an unrelated move, the DoJ has announced that five major banks - Citicorp, JPMorgan Chase, Barclays, The Royal Bank of Scotland and UBS - have pleaded guilty to manipulating foreign exchange markets and agreed to pay criminal fines of over US$2.5 billion. According to a DoJ statement, between December 2007 and January 2013, euro-dollar traders at Citicorp, JPMorgan, Barclays and RBS – self-described members of "The Cartel" – used an exclusive electronic chat room and coded language to manipulate benchmark exchange rates. The five banks have now paid nearly US$9 billion in fines and penalities to U.S., Swiss and U.K. regulators relating to currency manipulation.

WASHINGTON, DC: UPS, together with 12 other major U.S. corporations with combined annual revenues of US$1.3 trillion and market capitalization of US$2.5 trillion, has signed up to president Barak Obama's American Business Act on Climate pledge.

The companies are responding to Obama's Climate Action Plan goal of reducing carbon pollution by nearly six billion tons through 2030, equivalent to removing all cars from U.S. roads for more than four years.

Last November Obama announced a goal to reduce U.S. greenhouse gas emissions 26-28 percent across the economy by 2025.

UPS said it will reduce CO2 emissions 20 percent by 2020 off a 2007 base line, and achieve a cumulative target of one billion miles of package or freight delivery by 2017 using alternative fuel/technology trucks.

risky business south usaTo achieve these goals the company said it will continue to optimize its network to minimize mileage and energy consumed; invest in fuel-saving technologies to reduce dependency on fossil fuels; and conserve energy through facility design, operational practices, renewable energy and retrofitting.

Other companies who have signed the pledge are Alcoa, Apple, Bank of America, Berkshire Hathaway Energy, Cargill, Coca-Cola, General Motors, Goldman Sachs, Google, Microsoft, PepsiCo and Walmart.

In a joint statement they declared: "We applaud the growing number of countries that have already set ambitious targets for climate action. In this context, we support the conclusion of a climate change agreement in Paris that takes a strong step forward toward a low-carbon, sustainable future.

"We recognize that delaying action on climate change will be costly in economic and human terms, while accelerating the transition to a low-carbon economy will produce multiple benefits with regard to sustainable economic growth, public health, resilience to natural disasters, and the health of the global environment."

The 13 companies will invest at least US$140 billion in new low-carbon investment and more than 1,600 megawatts of new renewable energy, in addition to company-specific goals to cut emissions as much as 50 percent, reduce water intensity as much as 15 percent, purchase 100 percent renewable energy, and pursue zero net deforestation in supply chains.

The We Mean Business corporate coalition said it welcomed the commitments because companies want long-term certainty. The group estimates the value of the low carbon market at US$5 trillion globally and expects it will create 60 million new jobs in renewable energy, clean technology and smart infrastructure over the next 20 years.

"The shift to a low-carbon economy is inevitable, irreversible and irresistible." said Nigel Topping, CEO of We Mean Business. "Taking bold climate action is simply good for business."

SAN JOSE, CA: Cisco says the Internet of Things (IoT) will generate US$8 trillion in value over the next decade with US$1.9 trillion from logistics.

The other drivers will be innovation and revenue (US$2.1 trillion); asset utilization (US$2.1 trillion); employee productivity improvements (US$1.2 trillion); and enhanced customer and citizen experience (US$700 billion).

Together with DHL, Cisco has released an IoT report that estimates 50 billion devices will be connected to the Internet by 2020, compared to 15 billion today.

IoT 2They say for any organization with a supply chain or logistics operation, IoT will have "game-changing consequences, from creating more last mile delivery options for customers, to more efficient warehousing operations and freight transportation". The two companies are collaborating on an IoT innovation project that will improve decision-making in warehouse operations with near real-time data analytics based on Wi-Fi connected devices.

Ken Allen, CEO DHL Express commented: "There is huge potential for countries to further increase their connectedness and prosper through trade, integration and technology. We believe the internet of things will be a primary enabler of this global transformation."

According to the report, the logistics industry could improve operational efficiency as the IoT connects in real time millions of shipments each day. "The internet of things is the connection of almost anything – from parcels to people – via sensor technology to the web and both Cisco and DHL believe this will revolutionize business processes across the entire value chain including supply chain and logistics. said Markus Kückelhaus, vice president Innovation & Trend Research, DHL Customer Solutions & Innovation.

The report concludes by wondering what the logistics industry will look like when 30 percent of things are connected: "Digital disruption is all around us and it's having massive implications for business. Digitization and the expansion of the Internet of Things is a catalyst for growth, which is driving new economic models and enabling organizations to remain competitive and embrace the pace of change happening globally," added Chris Dedicoat, president, EMEAR for Cisco.

HANGHZHOU: The Alibaba Group has increased its stake in Singapore Post (SingPost) by five percent to 14.51 percent at a cost of US$138.6 million.

Alibaba singaporeThe company has also agreed to invest a further US$67.85 million for a 34 percent shareholding in SingPost's Quantium Solutions International (QSI), which operates runs a logistics and fulfillment network throughout the Asia Pacific region.

Under the agreement QSI will become a joint venture between SingPost and Alibaba Group with QSI providing e-commerce warehousing, last-mile delivery and other end-to-end e-commerce solutions.

While Alibaba currently derives less than five percent of its revenue from outside China, executive chairman Jack Ma said his goal is for cross-border e-commerce to eventually produce 50 percent of the group's revenue.

The company "started as our customer and then last year became our shareholder and business partner," said SingPost group executive officer Wolfgang Baier in a statement. "We are now taking the next step by building a regional e-commerce logistics platform and infrastructure for e-commerce players across Asia Pacific, based on Quantium Solutions."

SingPost chairman Lim Ho Kee added: "As a postal service provider, we are on a burning platform, facing a global decline in mail revenue with trends like e-substitution and lifestyle changes." Lim called the partnership with Alibaba "a win-win situation for both of us because we share similar goals and have a natural fit between our operations across Asia".

Alibaba group CEO Daniel Zhang noted the new venture with SingPost will provide global brands and merchants with convenient access to China and at the same time help Chinese businesses sell and ship worldwide.

LONDON: A report from UK international courier company ParcelHero suggests Amazon.com is planning to revolutionize e-commerce with its own logistics operation.

By the end of 2014 Amazon had earned a cumulative net profit of just US$1.9 billion in its 20-years as a public company, despite more than $400 billion in sales during that period.

In 2012 it launched its own UK logistics services as a precursor to expanding in Europe and the U.S.

According to Scott Galloway, professor of Marketing at New York University's Stern School of Business, Amazon will eventually become the "pipe through which everything you buy flows".

amazon 3Report author and ParcelHero founder Roger Sumner-Rivers says he has identified some key reasons for Amazon's move into logistics:

  • Amazon claims its new logistics arm is simply to 'complement' existing delivery companies and support its key strategy of strengthening its Prime service to encourage customer loyalty. However, to support the scale of such a logistics operation, a number of industry experts believe it may well become a logistics provider in its own right, competing with established companies such as UPS and Yodel.
  • Amazon stands to save US$3 billion globally and £122 million in the UK alone this year by cutting down on the use of external delivery companies, and could look to its logistics arm becoming a net income source rather than a US$5.13 billion yearly expense.
  • Amazon Logistics' introduction means it is not beholden to traditional mailing services such as the Royal Mail, and can support its Prime service actively by boosting lucrative Sunday deliveries and Same-Day Delivery services.
  • Long term, business analysts believe everything, starting with weekly groceries and home services, could be delivered through a pipe called Amazon.
  • Looking further into the future, the company is even considering using its new logistics service to manufacture items, using 3D printers, while en route to customers – the patent has already been filed.
  • In March this year Amazon staged trials with Audi delivering items directly into customers' cars. This service could be rolled out across Germany if tests are successful.
  • Should the 'great Amazon Logistics experiment' ultimately prove successful it could kick- start a radical change in the entire supply chain industry, as global rivals such as Alibaba, and large-scale companies such as Tesco.com, consider whether to make their own fleet available for third party deliveries.

Sumner-Rivers thinks Amazon eventually will become a logistics company competing with the other Integrators and mail companies: "The reports shows why we believe long-term Amazon's logistics plans mean everything will one day be delivered through a portal called Amazon, from the web platform you order your items on, right through to the actual production of those items, while on the way to you."

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