USPS reports 4.7% increase in Q2 revenues

The embattled US Postal Service (USPS) has reported that its operating revenue for Q2 of fiscal year 2015 was up to $17.7bn, an increase of 4.7% against the same period last year.

According to the postal operator, revenue growth was “primarily due to an 11.4% increase in Shipping and Package volume and pricing strategies”.

Despite Q2 controllable income was up from $313 million last year to $576 million, USPS still reported a net loss of $2bn compared to a $1.5bn loss in Q2 of 2015. This net loss was, according to the operator, “most significantly impacted by a $547 million unfavorable change in the workers’ compensation expense as a result of interest rate changes – a factor outside of management’s control”.

US Postmaster General and Chief Executive Officer Megan J. Brennan commented: “While we have been successful in achieving controllable income during the quarter, we are still reporting net losses and contending with long-term financial challenges.

“We continue to focus on improving operating efficiencies, speeding the pace of innovation, and increasing revenues for the Postal Service.”

Brennan added:  “I am grateful to our dedicated employees who helped us to achieve controllable income this quarter, but we cannot let this result mask the financial challenges we face.

“Our financial situation is serious, but solvable. We are confident that we can return to financial stability through the enactment of prudent legislative reform and a favorable resolution of the upcoming regulatory review of our rate-setting system.”

USPS appears hamstrung by outdated infrastructure and a poorly funded pension fund that are both accounting for huge losses. To add to this, it recently had to drop its prices for postal delivery that will only add to its woes due to the demands by Congress that aren’t managing it in the way that a private company’s management might….


SingPost operating revenues down

Singapore Post’s (Singpost) annual revenues have topped S$1bn for the first time according to the company. The Singapore based logistics and parcels group also recorded a net profit of S$248.9 million – another record for the company.

Revenues grew by 27.7% in Q4 and 25.2% in the full year, that were largely driven by e-commerce related activities and the inclusion of a number of new subsidiaries.

Net profit for Q4 jumped from S$35.6 million in 2014 to S$105.4 million in Q4 2015/16. For the full year it increased by almost 58% from S$157.6 million to S$248.9 million. These were boosted by a number of one-off divestment gains, however. If one excludes the one off items, underlying profit fell by 20.1% for Q4 and was down 4.1% for the full year. Singapore Post said that this was, “due largely to the reduction in rental income as the Singapore Post Centre (SPC) is being redeveloped, and higher finance expenses”.

E-commerce accounted for 35.8% of the full year revenue. Meanwhile in the logistics sector, operating profit increased by 132.9% in Q4 and 75% for the full year. Singposts’s Logistics revenue for the full year was up 34.7% to S$626 million.

Revenues increased in the Mail segment by 3.3% in Q4. Singpost said that this had been achieved despite the “cessation of revenues from subsidiaries which were divested in the first half of the year”.

SingPost added: “Excluding the impact of the divestments, Mail revenue would have grown by 13.4% in Q4 and 6.7% for the full year. This was largely driven by higher International mail revenue as a result of increased cross-border eCommerce-related deliveries.”

Commenting on the results, Mervyn Lim, Deputy Group Chief Executive Officer (Corporate Services) and Group Chief Financial Officer, said: “SingPost embarked on a transformation journey more than ten years ago to future-proof our business and we are seeing results. SingPost’s solid postal foundation paved the way for the company to pioneer eCommerce logistics in this part of the world and we successfully pivoted into the US with the completion of the Trade Global and Jagged Peak acquisitions in November 2015 and March 2016 respectively.”


Hermes invests in SME Business Accounts

Delivery company Hermes has announced that it is to invest heavily in its ‘Business Accounts’ service for SMEs. In a statement the company has said that it is “investing a six-figure sum to support the phenomenal growth of its Business Accounts”.

Currently the service is being used by more than 650 sole traders, ‘internet power sellers’ as well as SME retailers across the UK who send parcels to their customers.

Hermes is well known for delivering parcels for many of the UK’s top brands, with over 80% of the largest companies having accounts with the delivery firm. However, it also processes more than 10 million parcels a year for its ‘Business Account’ clients, each of whom deliver more than 150 parcels a week. These SMEs work in a number of sectors including sports equipment, clothing and fashion, homewares and campaign accessories.

The Hermes Business Accounts service was launched two years ago, and offers a range of benefits including free van collection as well as a flexible pricing scale whereby the more parcels a business ships the more money it saves. Each account holder is allocated a dedicated account manager and have access to a UK based customer service team.

Mike Antwoon, Sales Director of Hermes, said: “A Hermes Business Account is the perfect option for SMEs as they can benefit from economies of scale. In many cases, Business Accounts retailers have experienced incredible growth and become so successful they are now part of Corporate Accounts.

“This investment highlights the tremendous success of the service and we look forward to continuing our impressive growth in 2016.”

Fast growing SMEs are a good target market in an as yet fully mature e-commerce industry. Where some businesses are actively seeking underdeveloped e-commerce markets abroad, Hermes approach to foster smaller businesses in the UK seems like an intelligent approach before UK e-commerce reaches saturation.


UPS Foundation invests in medical drone delivery system

The UPS Foundation is partnering with the African aid companies Zipline and Gavi to use drones for delivering medicine, vaccines and blood to medical centres in Rwanda and other regions across the world with remote and poor populations. The UPS Foundation has secured an $800,000 grant to use drones in Rwanda.

The public – private partnership uses logistics expertise, cold chain and healthcare delivery expertise from UPS with Zipline’s national drone delivery network, as well as Gavi’s experience in developing countries to save lives and protect health in the remoter areas of the world.

The Rwandan government is planning to start using Zipline drones that will make up to 150 deliveries a day of blood to 21 transfusing facilities in the western half of the country from later this year.

Drones will later be used to deliver vaccines, treatments for HIV ? AIDS, TB, malaria and other essential and lifesaving medicines.

The UPS Foundation president Eduardo Martinez said: “Public-private partnerships are the key to solving many of the world’s challenges, with each partner contributing its unique expertise.

“UPS is always exploring innovative ways to enhance humanitarian logistics to help save lives, and we’re proud to partner with Gavi and Zipline as we explore ways to extend the Rwandan government’s innovations at a global scale.”

Zipline CEO Keller Rinaudo said: “The inability to deliver life-saving medicines to the people who need them the most causes millions of preventable deaths each year. The work of this partnership will help solve that problem once and for all.”

According to the WHO, Africa has the highest rate in the world of maternal death due to postpartum haemorrhaging.


DHL claims Parcelcopter trials a success

International delivery company Deutsche Post DHL has claimed that a three month test of its third generation Parcelcopter drone delivery system was successful, with a number of autonomous cross country flights cone under challenging alpine conditions.

The test was done between January and March this year in the Bavarian town of Reit im Winkl. According to Deutsche Post DHL this was “the first time worldwide that a parcel service provider has directly integrated a parcelcopter logistically into its delivery chain”.

In a statement, Deutsche Post DHL said: “Private customers in Reit im Winkl and up on the Winklmoosalm plateau were invited to test out the specially developed Packstations, dubbed the Parcelcopter Skyport. During the three month trial period, they could simply insert their shipments into the Skyport to initiate automated shipment and delivery per Parcelcopter. A total of 130 autonomous loading and offloading cycles were ultimately performed.”

The Parcelcopter had to deal with heavier loads, longer distances and the weather conditions that are faced in an Alpine winter including foul weather and high altitude.

According to the company’s statement, “The drone’s cargo was typically either sporting goods or urgently needed medicines and it arrived at the Alm station within just eight minutes of take-off. The same trip by car takes more than 30 minutes during winter.”

Jürgen Gerdes, Management Board Member for Post – eCommerce – Parcel at Deutsche Post DHL , commented: “We’re the first worldwide who are able to offer a transport drone – Parcelcopter at DHL – for end-customer delivery. With this combination of fully automated loading and unloading as well as an increased transport load and range of our Parcelcopter we have achieved a level of technical and procedural maturity to eventually allow for field trials in urban areas as well.”


Canada Post profits collapse

Canada Post saw profits before tax collapse to $63 million in 2015, from $194 million in 2014.

The Canadian postal operator tried to explain that the profit was modest in comparison to 2014 because it is facing the significant challenges of “declining mail volumes, an increasing number of addresses to serve each year, significant pension obligations and the ongoing need to invest in  infrastructure to continue to serve Canadians”.

Parcel volumes seem to be climbing. This was balanced with a decline in bills and letter volumes in the order of 250,000 pieces.

Canada Post will focus hard on parcels growth. In a statement it said, “The Canada Post segment’s expanding role as an essential enabler for online shoppers and retailers drove parcel deliveries to new heights in 2015. Following an unprecedented back-to-school surge in online sales in the third quarter, deliveries reached new records for the Canada Post segment. To meet the growing demand for parcel deliveries to Canadians, Canada Post responded with 16 delivery days of one million or more parcels each, and delivery of 2.2m parcels over eight weekends. The Canada Post segment Parcels revenue rose by 9.1% in 2015 compared to 2014, reaching $1.65bn and making Canada Post the largest parcel company in the country.”

Commenting on the mail sector, Canada Post said: “Volumes of Domestic Lettermail, the largest product category within Transaction Mail, declined by 5.2% or 187m pieces compared to 2014. Since Canadians’ use of paper bills, statements and letters peaked in 2006, Domestic Lettermail volumes have fallen by 32%, or 1.6bn pieces.”

The new Canadian government has instigated a review of Canada Post with a view to instituting more palatable reforms than the ‘community mailbox’ scheme that was being rolled out when it came into power.

Canada Post responded by saying that it “welcomes” the review and it is “committed to actively participating in the process to help determine the best path forward given the ongoing challenges faced by the postal system”.


Parcel for Me – m-commerce growth

M-commerce delivery platform Parcel for Me has published research that suggests the volume of retail sales completes by smartphone is outstripping orders made by tablets and computers for the first time. However, the company has warned that the growth of so called m-commerce can also lead to more abandoned purchases.

M-commerce accounts for over 60% of all online shopping in the UK, according to Parcels for Me. However its Chief Executive Luke Davids has added that difficulty in navigating through online checkouts is one of the major reasons for consumers abandoning more purchases than any other technology. He said, “Even though cart abandonment is a massive headache for retailers, it demonstrates how consumers are themselves being confronted with difficulties when trying to buy online.”

“We have spoken to retailers both large and small, all of whom appreciate that abandonment by smartphone is often the result of a couple of very distinct factors and not just because of occasional poor mobile signal or the fact that users can be distracted by any one of the vast number of functions which these devices can perform.

“It appears that consumers are put off by how long it takes to input information on a smartphone, especially at the checkout, because typing on a mobile is time-consuming and can be error-ridden.

“Some retailers’ websites are simply not suited for mobile transactions. That fact, together with problems of form-filling and the aggravation caused by losing connection and having to begin the process all over again, results in consumers taking their business elsewhere.

“These are the principal speed bumps preventing more sales being completed. Given the growing willingness of consumers to use their sophisticated handheld devices to buy online, failing to remove these obstacles and create a frictionless buying experience is potentially a very expensive oversight.”

The Parcel for Me platform, which aims to help simplify the online checkout process and reduce cart abandonment,  was launched in February.


Google to test self driving minivans with Fiat

Google and Fiat Chrysler have announced that they are about to build 100 self driving minivans, some of which will be on the road later this year.

Google has announced it is working with Uber, Lyft, Ford and Volvo as a lobby group called the Self Driving Coalition for Safer Streets. Interestingly, though the lobby group was formed last month, Fiat Chrysler Automobiles (FCA) was not announced as part of it. Google has been developing the self driving car concept for some time, including testing the cars in Greenwich, London, but this move with Fiat Chrysler takes the concept into minivans.

In a statement about the FCA collaboration posted on its blog on 3 May, Google said: “We’ve expanded our testing program to a total of four U.S. cities over the last several months, so it’s time to add more vehicles to our fleet. We’re planning to more than double our fleet with the initial addition of about 100 new 2017 Chrysler Pacifica Hybrid minivans, and we hope the first few will be on the road by the end of this year.

“This collaboration with FCA is the first time we’ve worked directly with an automaker to create our vehicles. FCA will design the minivans so it’s easy for us to install our self-driving systems, including the computers that hold our self-driving software, and the sensors that enable our software to see what’s on the road around the vehicle. The minivan design also gives us an opportunity to test a larger vehicle that could be easier for passengers to enter and exit, particularly with features like hands-free sliding doors.”

Though flying drones are getting a lot of interest, automated delivery vans are the likely workhorses of the automated delivery world. They will be less susceptible to adverse weather and will be able to carry far greater loads than their flying colleagues…


Barclaycard – 40% UK workers have parcels delivered to work

According to a shopper insight survey from Barclaycard, around 40% of people regularly use their professional address as a personal PO Box.

The research by Barclaycard also found that 21% of shoppers said that their online shopping has doubled or tripled in the last three years, reflecting other research that online as a venue for shopping is going from strength to strength.

Barclaycard also noticed a number of other UK online shopping trends:

– 8% now get a daily delivery sent to their work address

– Books are the number 1 online purchase sent to the office, with 47% of respondents saying they had done this.

– 33% of women use their professional address to hide their purchase from their partners. Significantly fewer women did this!

– 20% of men admitted getting makeup delivered to work

– 12% get their weekly food shopping delivered to work

– Nottingham is the town where office deliveries is most likely to happen, with 29% of those surveyed from the city having their goods delivered there.

– 16% of respondents have their goods delivered to work as they no longer have a private letter box.

– Over half (51%) said they couldn’t get time off work to go to a Doddle store or similar to pick up their goods.

In a statement from the company, Barclaycard commented, “British shoppers now spend more than £100 billion online every year , with the weekend – Saturday afternoon and Friday and Sunday evenings in particular – the most popular time for consumers to indulge in online retail therapy. In fact, our preference for online ordering has helped boost the size of the UK parcel market to almost £9bn , leading our corporate mail rooms to increasingly act as our private post offices.”

Commenting on the findings, Marc Pettican, Managing Director at Barclaycard, said, “We all love the speed and ease of shopping online and this is especially true over the Bank Holiday weekend when we’ve got an extra day to shop. There’s no denying how handy it is to get our deliveries sent to the work place, so much so that people working in post rooms will likely be feeling quite rushed off their feet.”

Pettican added, “With online shopping continuing to increase in popularity, this post room boom looks here to stay.”


DPD extends Essen facility

Pan European delivery company DPD has doubled the parcel handling capacity of its Essen, Germany facility with an investment of €8.5 million.

The facility will be processing around 50,000 parcels a day but plans to up this to 70,000 a day in future. Prior to the investment the Essen facility could handle around 35,000 parcels per day.

“DPD is registering very strong rates of growth, caused in particular by the boom in online retailing,” stated DPD regional director Dr. Jörg Schmeidler. “After our expansion operations we are well-prepared for future growth. We therefore regard the investment of €8.5 million as a long-term commitment to Essen and to the jobs at this location.”

The extension to the existing DPD facility began in November 2014 and continued while operations in the depot carried on. Earlier this month, two additional sorting halls and a new unloading section came on stream.

The newly extended facility in Essen will now serve two more towns in the Ruhr. Oberhausen and Bottrop were added from the start of May, but from the 1st of September, Gelsenkirchen as well as Velbert and Hattingen will be added to the areas served. Up until now the facility served Essen, Bochum, Mulheim an der Ruhr, Herne and Gladbeck. The site has been operational in Ruhrglas Street, Essen since 2007, and employs 250 there.

Germany’s e-commerce market is one of the strongest in Europe and as the market matures so delivery companies are looking to extend their reach in the country. This rationalisation of assets in Essen is one example where this is happening.