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BE

In Belgium, around 10m people live on a surface of less than 30,000 square kilometres, which amounts to approx. 350 inhabitants per square kilometre. In Europe, this density of population is second only to the Netherlands. Around 97% of Belgian people live in towns and cities. The largest urban areas are Brussels, Antwerp, Lige and Ghent. This makes Belgium's postal market attractive for potential newcomers. Belgium's Gross Domestic Product of 32.400 per capita is above average in the EU-15 (29.300 ). The service sector generates around 75% of the Gross Domestic Product; approx. 87% of the goods and services produced are exported. Belgium's central geographical situation makes it a highly suitable location for logistics companies. Its seaports (Antwerp above all) and the Brussels airport are logistics hubs with European and intercontinental connections. This is reflected by the high density of companies, especially in the courier and forwarding business. The express and logistics markets and their players are characterised by a high degree of interdependence with the Netherlands and Luxembourg.

Postal Market
Belgium's postal market has a volume of around 3bn addressed mail items. Including unaddressed mail and parcels total mail volume is at around 7.8bn consignments. Total turnover of the post and its competitors is over 3bn . With a market share of almost 100% De Post/La Poste is absolutely marketdominating in the addressed mail sector. In this sector there is almost no competition apart from a few small local companies. TNT's announcement to engage itself more in this sector in its neighbour country has been withdrawn and postponed to the period after 2010. The government's subsidies to La Poste, its exemption from VAT and uncertainty about future regulations are considered to be the main market entry barriers for competitors. The situation in the bulk mail sector is totally different. La Poste's main competitor, Belgique Diffusion, is the market leader, by far. The company also gained a respectable market share in the delivery of newspapers. After outbound cross-border mail has been liberalised in 2003 vivid competition emerged in this market. Besides De Post/La Poste the largest companies in this area are subsidiaries of big global players like DHL, DPD, Swiss Post International and Spring (a joint venture of TNT and Royal Mail). De Post/La Poste and the government fear for the funding of the universal service after the complete deregulation of the postal market. Therefore the abolishment of the reserved area is not expected before January 1 2011.

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Belgian Post ( De Post/La Poste or bpost respectively)


La Poste sees the market liberalisation as a threat to its existence. CEO Johnny Thijs expects revenues to decrease between 25% and 50% and points at allegedly unfair conditions of competition due to the universal service obligation. The Belgian post was indeed struggling in the past few years. In 2002 and 2003 the company had to face losses of over 40m in both years. The post also failed to meet the performance standards and customer satisfaction was below average while the sick leave was above average. By now La Poste has completed a restructuring programme and is profitable again. The loss-generating branch network has partially been replaced by private run postal agencies. The sorting process was modernised and delivery reorganised. In this context the post launched an investment programme worth 250m at the end of 2006 - it's biggest so far. Among other things, four new sorting centres were established. In mid 2010 La Poste announced a rebranding. From September 2010 on the CI will be gradually adjusted to the new brand name bpost. The Belgian post depends on its letter business to a large extent. Over 80% of its turnover is generated in this sector. La Poste receives compensation payments from the government for the early delivery of newspapers (for reduced prices). At the beginning of 2006 Belgium's government sold shares of La Poste worth 300m (50% minus one share) to a consortium of Post Danmark and British investment fund CVC Capital Partners (Post Invest Europe Sarl). In connection with the merger of Posten Schweden and Post Danmark the Danish post divested itself of its stake in La Poste and sold it to CVC. Therefore the Belgian State and the investment fund are the only shareholders of La Poste.

BE

Express Market
The post is only one of several well positioned service providers in the market for parcel and express consignments. Besides large integrators like UPS, FedEx and DHL, TNT, DPD and GLS are also active on Belgium's express market. Additionally there are a lot of small and medium sized companies active in the express market. Their business is triggered by the vicinity of the international air cargo hubs Brussels and Amsterdam. Turnover is estimated to be around 950m and showed a dynamic growth over the past few years. Competition on the market increased in the course of this development despite a comparably high degree of consolidation.

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Country Profile Brazil


Country Overview
Area and Population
Area (thsd. km2 ) Population (in m) Population Density (Inh. / sq. km.) Population in Cities (%) Working Population (in m) Population of Working Age (%) Households (in m) 8,514.8 191.6 22.6 85.1 91.3 66.2 55.6

BR

Economic Data
GDP (in bn ) Inflation rate (%) Agriculture's Share of GDP (%) Industry's Share of GDP (%) Services Sector's Share of GDP (%) Exports of Goods and Services (% of GDP) Imports of Goods and Services (% of GDP) High-Tech Exports (% of manufactured goods) GDP Per Capita (in thousand ) 866.9 3.6 5 30.6 64.5 12.9 10.7 12.1 4.5

Goods Transport
Airports Rail Network (1,000 km) Road Network (1,000 km) Air Freight (m tkm) Road Freight (bn tkm) Railway Freight (bn tkm) Seaport Handling (m tons) Seaports 718 29.5 1,751.9 1,412.26 485.6 164.8 509.6 12

Communication and Internet


Telephone Main Lines (%) PCs (%) Mobile Phones (%) Internet Users (%) 20.6 16.1 63.1 26.1

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With its area of over 8m square kilometres, Brazil is the fifth largest country in the world and the largest on the South American continent.

BR

With about 190m inhabitants, Brazil is the most populous country of South America. Almost 22 inhabitants live on one square kilometre. The majority of the population lives in the big cities near the Atlantic coast. About 85% of the entire population live in cities like Sao Paulo, Rio de Janeiro and Brasilia. More than 80% of Brazil's gross national product are generated in the five largest cities: Sao Paulo (43.7%), Rio Grande de Sul (11.5%), Minas Gerais (10.6%), Parana (8.6%) and Rio de Janeiro (5.9%). Brazil's economy saw robust growth over the last years. The gross domestic product only decreased marginally in the year of crisis 2009. With 866.9bn , Brazil's gross domestic product counts among the highest of all South American countries. However, per capita income only amounts to about 4,500 per year. Brazil counts among the world's 20 largest export nations. 18% of the Brazilian gross domestic product is exported. Brazil's economic growth primarily depends on exports. Export volume grew by 166% from 2002 2007 and reached 108bn in 2007. The country's most important export goods include machinery, cars, aircraft, steel, aluminium and tin as well as coffee, soy, sugar and meat. Around 30% of the country's gross domestic product is generated by the manufacturing sector while the service sector contributes 64% to Brazil's gross domestic product. Brazil experienced a deep transformation in the 90s, which was characterised by the privatisation of the country's infrastructure and economic stabilisation. Approximately 60% of total turnover in Brazil's transport industry is generated by road haulage. But the infrastructure of the transport sector is poorly developed on the whole. So far, only small amounts of money have been invested in roads and railway connections. There are too few air routes to make the country accessible, especially in the sparsely populated areas. The expansive Amazonian rainforests in the north and the plateaus and mountains in the south are only sparsely populated and present a rather big problem for nationwide infrastructure and distribution systems. The infrastructure is considered to be one of the main impediments to the growth of Brazil's economy. The picture is characterised by overloaded ports, poorly developed roads, collapsing air traffic and the threat of an energy shortage. Brazil's former president Lula passed the PAC (Programa de Acelerao do Crescimento) in January 2007 to promote the expansion of the infrastructure and to accelerate economic growth. The programme was launched to stimulate private initiatives, promised to improve the country's financial policy and higher public investments. Investments from the PAC programme will total 193bn . Besides the government commitment tax relieves for the construction sector and for new investments are planned.

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CH

Even though two third of all domestic payment transactions are handled by Swiss Post, the company does not have a banking licence. Since 2005 Swiss Post attempts to obtain one but these attempts have always failed due to the opposition of Switzerland's banks. Thus, Swiss Post can only offer loans and mortgages in co-operation with other banks. Nevertheless, over the past years PostFinance became Swiss Post's most important profit earner by far. In 2009 the division contributed more than 54% to Swiss Post's profit. A distinctive feature of Swiss Post is the division PostAuto which operates regional public transport networks in Switzerland and also abroad, e.g. in France. In 2009 the unit transported 118m passengers with more than 2.000 vehicles. The group is represented in 16 European countries, four major Asian cities and in the USA by its Swiss Post International division. By its own account, SPI is the 'world's no. 3 in international letter distribution'. The unit generated revenues of 691m and a profit of 36m . Co-operation and alliances are characteristic for Swiss Post's business. The group's international express business is a joint venture with TNT and international parcels are delivered in co-operation with GLS. Swiss Post also co-operates with Hermes Logistics Group. Swiss Post's long-term strategy is based on two pillars. In the short term the company tries to obtain a banking licence to compensate for the decline of letter volume. In the medium term the post plans to establish itself as a 'service provider for companies', also on an international level. In this context the post plans to offer several electronic services like digital mail processing, scanning and digital archiving. The post and its subsidiary PostFinance are to become two joint stock companies on January 1 2012. Thereby the post should become more flexible and politics should be kept out of the day-to-day business.

Express market
Unlike in many European countries, Switzerland has no general compulsory registration for companies in the courier and express sector. Turnover data is also usually not published. Total market volume is estimated at 1.2bn to 1.5bn of which the parcel business accounts for 520m on 115m shipments (2009). As Switzerland's parcel market wasn't opened to competition until 2004 the post is still the biggest player in this sector with a market share of around 80%. Market observers blame market barriers like a ban on night-time driving (which doesn't apply to Swiss Post) for this. Swiss Post DPD (Switzerland) AG and DHL Express (Switzerland) AG are the two largest companies in the parcel market. These two companies account for over 80% of the licencees' total turnover.

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DHL Express (Switzerland) AG and TNT are the two major companies in Switzerland's express market. Additionally, there are lot of private run courier and express companies like GO!, Overnight.CH, Swiss Transport, EcoExpress and Ruebli Kurier operating in the Swiss market. A distinctive feature of Switzerland's CEP market is the voluntary commitment of private parcel services to create better labour conditions - even for subcontractors. In autumn 2007 the members of the KEP&Mail association agreed on common labour conditions. The key points of this agreement are (1) a minimum wage of 42.000 Swiss franc around 32.100 annually for a full-time job, (2) a maximum weekly working time of 43 hours for drivers and 42 hours for other employees and (3) 25 days of holyday for employees above the age of 50. These terms apply not only to the members of the association but also to their subcontractors.

CH

Air freight market


In 2008 about 320.000 tons of air freight were handled in Switzerland. This represents a decline of 36% compared to 2000. The decrease in volume is attributed to airline Swiss's ongoing problems, which lead to more air cargo being processed in the neighbouring countries. Especially Frankfurt (Germany) and Paris (France) benefited from this development. Switzerland's air cargo volume is expected to drop by another 19.5% in 2009. More than 50% of Switzerland's air freight exports are bound for Asia. North America is the second most important destination, with more than one quarter total air freight volume. With a share of 21% the USA are the leading country for exports from Switzerland, followed by China, Japan and Hong Kong. Zurich Airport is Switzerland's most important air freight hub. Almost 80% of air cargo volume is processed here. The Basel Mulhouse Airport is the second largest cargo airport in Switzerland, even surpassing Geneva. It is noteworthy that the Basel Mulhouse Airport is located in France and is therefore jointly operated by both nations. In 2008 Swiss World Cargo a subsidiary of Lufthansa by now remained the country's largest cargo airline despite its many problems. Air France/KLM and Singapore Airlines ranked second and third. Panalpina is Switzerland's leading air freight forwarder (19.1%) closely followed by DHL (18.9%) and DB Schenker.

Logistics market
Forwarding and logistics count among the major traditional services rendered worldwide by Swiss firms: two of the biggest global logistics groups, Panalpina and Kuehne + Nagel, are based in Switzerland. The market is heavily fragmented, and many smaller businesses operate in the industry: in Basel alone, the most important forwarding centre in Switzerland, there are 70-80 operators. Other important companies are M & M Militzer &

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Companies in the Spanish CEP market previously had a strong regional orientation. However, this situation is changing with the economic growth in recent years and Spain's integration into the EU. At present, all major players are expanding their networks through takeovers, franchise operations and co-operations with retail chains. In particular DHL and the French post established themselves early in the Spanish market through acquisitions (Guipuzcoana and Seur respectively).

ES

Air Cargo Market


The economic crisis had a lasting impact upon Spain's air freight market. The air freight volume of 630,000 tons in 2008 is only an increase of 1.9% compared to 2000. Air cargo volume is expected to decrease by more than 13% this year. Madrid (52.3%) and Barcelona are the country's most important cargo airports. Vitoria, a pure cargo airport, ranks third. Zaragoza is among the fastest growing airports. In the last years air freight volume could be doubled almost every year in Zaragoza. Destinations in Asia are the most important for the Spanish market (30.3%). Europe and North America follow with a share of 25% each. The comparably high percentage of freight bound for South America is especially remarkable (14.7%). The most important destination is Spain itself. Domestic destinations have a market share of 19.3% especially due to the islands as their supply relies heavily on air transports. The USA and Mexico are the next important destinations. Air cargo volume bound for Asian destinations is very fragmented. Shipments bound for Japan and China only contribute 4% to total volume. Vanesp Iberica is the largest air freight forwarder with a market share of 8.9%, followed by DHL and Delta Cargo. Air France/KLM is the country's largest cargo airline followed by Cargolux and state owned Iberia.

Logistics Market
Historical, commercial and geographical factors make Spain an important turnstile between Europe, North Africa, the Middle East, Asia (container traffic) and South America. Thus, a number of logistics firms have established themselves in the last few years, using Spain as a hub to serve regional markets. In 2007, the Spanish logistics market's turnover amounted to approx. 82.7bn , making it the fourth largest in Europe - after Germany, France and Great Britain. With a contribution of 7.9% to GDP the logistics industry is still one of Spain's most important business areas.

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ES

Spain's role as Europe's vegetable supplier and its interconnection with Europe's automobile industry are the main reasons for the high demand for logistics services in Spain. Road haulage represents around three quarters of Spain's total transport volume and therefore is the most important mode of transportation. Due to its long coastal line maritime transportation ranks second. Almost one quarter of all transports in Spain are maritime transports. It is therefore not surprising that strengthening rail transportation is one the main goals of Spain's logistics policy. It is planned to improve rail connections of harbours. The expansion of the so called 'Short Sea Shipping' (short range maritime transports) is also among these goals. Spain's largest logistics company is Logista followed by DHL. However, overall the market is characterised by small and medium sized companies and the subsidiaries of internationally operating forwarders. Besides the economic centres Madrid and Barcelona the Basque region and Aragon (here especially the Plaza Saragossa) are important locations for the logistics industry. However, the capital region of Madrid is especially important for the industry and also is the largest centre of logistics operations in Spain.

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The Biggest CEP and Logistics Companies

HK

Company 4PX International Express ATL Logistics Kong Cathay Pacific China Kong) Post (Hong Hong

Mail

Express
G G

Forwarding
Q G G

Logistics
Q G

Courier

G Q G

G G G G Q Q

China Resources China Shipping (H. K.) China Travel Service (Cargo) Cosco (Hong Kong) DHL Express Kong Hong
G G

G G

DHL Global Forwarding (Hong Kong) Ltd. Eastern Worldwide Fast Express Limited FedEX Hong Kong Hongkong Post Hutchison Whampoa Kerry Logistics Maersk Logistics Modern Terminals Orient Overseas Container Line Schenker Hong Kong Sinotrans Hong Kong Taikoo Maritime TNT Hong Kong UPS Hong Kong
G G Q G Q G G G G

G G G

Q Q

G G G

G G G G

G G G G G G

G G Q G G G Q

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Postal Market Regulation

IT

Definition of Post
Letters, books, catalogues, newspapers, periodicals and similar consignments, parcels

Reserved Area / Monopoly


According to the third EU postal directive the reserved area has to be abolished by December 31 2010.

Universal Service Obligation


Letters: up to 2 kg Parcels: up to 20 kg Press: up to 2 kg Registered Mail Consignment of Valuables

Quality Targets for Universal Service Obligation


Delivery five days a week. In practice six days a week. Delivery time targets are adjusted regularly: 1. Mail Consignments: 2006: D+1 88.0%; D+3 99.0% 2007: D+1 88.5%; D+3 99.0% 2008: D+1 89.0%; D+3 99.0% 2009: D+1 89.0%; D+3 99.0% 2. Recorded mail: 2006 2009: D+3 94.0%; D+5 99.0% 3. Bulk Mail Consignments: 2006 2009: D+3 94.0%; D+5 99.0% 4. Parcels: 2006: D+5 93.0% 2007: D+5 93.5% 2008: D+5 94.0% 2009: D+5 94.0%

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Financing the Universal Service


With income from the formerly reserved area, state subsidies, and a compensation fund, although this is practically irrelevant.

IT

Price Regulation
Pricecap

Licensing / Registration
There are two types of licensing: An individual licence (Licenza Individuale) for non reserved postal services within the universal service with a contributory payment of 3 % of the turnover into a compensation fund A general licence (Autorizzazione Generale) for postal services outside of the universal service.

Network Access
Not regulated.

Rules and Regulations


Postal and Telecommunicationact (Codice postale e delle telecomunicazioni) Regulations concerning dispositions on general authorisations in the postal sector 04 02 2000 Regulations concerning dispositions for issuing individual licences in the postal sector 04 02 2000 15 02 2006 Regulation on reserved area and USO 18 12 2002 13 01 2004 Quality regulation 19 06 2003 13.03.2006

Planned Changes
By order of Legislative Decree May 16, 2008, n. 85.1 the functions of the Ministry of Communications and its inherent financial, material and human resources (concerning the postal market), were transferred to the Ministry of Economic Development.

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Rules and Regulations

NL

Postwet 1 June 2000 (Postal Act) Postbesluit 28 April 2000 (Postal Decree) Barp Postwet 1 June 2000 (general postal directives)

Planned Changes
None

Addresses
Business Register
Kamer van Koophandel Kamer van Koophandel Amsterdam, De Ruyterkade, 5, 1013, AA Amsterdam T +31 20 531 4000 v +31 20 531 4799 m www.kvk.nl/handelsregister k info@amsterdam.kvk.nl

Regulator
Onafhankelijke Post en Telecommunicatie Autoriteit OPTA, Zurichtoren, Muzenstraat, 41, 2511 WB The Hague T +31 (0)70 315 35 00 v +31 (0)70 315 35 01 m http://www.opta.nl/asp/en/ k mail@opta.nl

Universal Service Provider


TNT N.V. Neptunusstraat 41-63, 2132 JA Hoofddorp, 1100 KG Amsterdam, Niederlande T +31 20 500 6000 v +31 20 500 7000 m www.group.tnt.com k tnt.communication@tnt.com

Owner of the Universal Service Provider


Free float

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Associations
DDMA - Dutch Direct Marketing Association W.G. Plein 507/508, 1054 SJ Amsterdam T +31 20 4528 413 v +31 204528 395 m http://ddma.nl k info@ddma.nl FENEX - Nederlandse Organisatie voor Expeditie en Logistiek PortCity II, Waalhaven Z.z. 19, 3e etage, Havennummer 2235, 3089 JH Rotterdam T +31 10 40 20 398 v +31 10 45 27 367 m http://www.fenex.nl k fenex@fenex.nl Transport en Logistiek Nederland (TLN) Boris Pasternaklaan 22, 2719 DA Zoetermeer T +31 79 3636 111 v +31 79 3636 200 m http://www.tln.nl/ k info@tln.nl

NL

Companies
Audax BV Audax BV, Burgemeester Krollaan, 14, 5126, PT Gilze T +31 16 14 57 000 v +31 16 14 57 777 m http://www.audax.nl/ k info@audax.nl Bakker Logistiek Group BV Bakker Logistiek, Handelsweg, 26, 3899, AB Zeewolde T +31 36-5219521 v +31 36-5219589 m http://www.bakker-logistiek.nl/ k info@bakker-logistiek.nl Broekman Logistics BV Broekman Logistics, Albert Plesmanweg, 61 B, 3088 GB Rotterdam T +31 (0)10 487 32 55 v +31 (0)10 495 17 47 m http://www.broekman-group.nl k info@broekman-group.nl DE RIJKE LOGISTICS B.V. De Rijke Logistics BV, Postbus,18, 3200, AA Spijkenisse T +31(0)181 654200 v +31(0)181 654397 m http://www.derijke.com k info@derijke.com Den Hartogh Logistics Den Hartogh Logistics, Oranjelaan, 45, 3181, HK Rozenburg T +31 181 24 78 00 v +31 181 23 33 00 m http://www.denhartogh.net/ k logistics@denhartogh.com DHL Danzas Air & Ocean (Netherlands) B.V. RIDDERHAVEN 52984 BT RIDDERKERKP.O.BOX 41112 DHL Expess (Netherlands) B.V. Reactorweg 25 , 3542 AD Utrecht, Postbus 40332, 3504 AC Utrecht T +31 030 - 214 95 00 v +31 30 - 214 95 91

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NL

DSV Air & Sea B.V. Hoeksteen 26, NL-2132 MS Hoofddorp T +31 20 405 86 70 v +31 20 405 87 10 m www.dsv.com/nl k info.ams@nl.dsv.com DSV Road BV DSV Road B.V., Tasmanweg, 2, Trade Port West, NL-5928 LH Venlo T +31 77 389 22 22 v +31 77 389 22 00 m http://www.dsv.com/nl k info.ven@nl.dsv.com DSV Solutions B.V. Head Office Logistics, Moerdijk, NL-4761 RL T +31 168 41 30 00 v +31 168 41 40 00 m www.dsv.com/nl k info.moerdijk@nl.dsv.com Fritom Holding BV Fritom Transportgroep, De Wymerts, 9, 8701 WT Bolsward T +31-515-570075 v +31-515-570060 m http://www.fritom.nl k info@fritom.nl Genaral Logistics Systems BV GLS Netherlands, Proostwetering, 40, 3543, AG Utrecht T +31 30 - 241 78 00 v +31 30 - 241 79 03 m http://www.gls-netherlands.com k info@gls-netherlands.com Jan De Rijk Logistics BV Jan de Rijk Roosendaal, Leemstraat, 15, 4705, RT Roosendaal, T +31 165 572 572 v +31 165 572 582 m http://www.janderijk.com k info@janderijk.com NIPPON EXPRESS (NEDERLAND) B.V. Cessnalaan 24, 1119 NL Schiphol-Rijk T +31 020 406 65 00 v +31 020 406 65 55 Pax Beheer BV Pax Beheer BV, Willemskade, 1, 8911, AW Leeuwarden T +31 (0)58 244 44 55 v +31 (0)58 213 07 49 m http://www.pax.nl k info@paxbeheer.nl Sandd BV Sandd BV, IJsseldijk, 2, 7325, WZ Apeldoorn T +31 (0)55 3682525 v +31 (0)55 3682526 m http://www.sandd.nl k info@sandd.nl Schenker International BV Schenker International BV, Postbus 75579, 1118, ZP Schiphol-Centrum, Fokkerweg 300, 1438 AN Oude Meer (Schiphol) T +31 20 500 00 00 v +31 20 500 05 99 m http://www.schenker.nl k info.nl@schenker.com TransMission BV TransMission BV, Storkstraat ,14, 2722, NN Zoetermeer T +31 (0)79 3438250 v +31 (0)79 3438251 m http://www.trans-mission.nl k info@trans-mission.nl

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United Parcel Service Nederland B:V Zandsteen 22, 2132 Hoofddorp T 0800 09 91 300 Van Uden Logistics BV Van Uden Logistics BV, Hertog Karelweg, 22, 4175, LS Haaften T +31 (0)418 597 200 v +31 (0)418 597 209 m http://www.van-uden.nl k info@van-uden-logistics.nl VCK Holding BV VCK Holding BV, Valrep, 13, 1042, AN Amsterdam, P.O. Box 58417, 1040 HK Amsterdam T +31 20 5 877 877 v +31 20 5 877 895 m http://www.vck.nl k info.group@vck.nl Vos Logistics BV Vos Logistics BV, Waalkade, 5347, KS Oss T +31 412 699 599 v +31 412 699 501 m http://www.voslogistics.com k corporate@voslogistics.com Wim Bosmann Holding BV Wim Bosman Holding B.V., Industriestraat, 12, P.O. Box 18, 7040 AA 's-Heerenberg T +31 (0)314 67 81 11 v +31 (0)314 66 11 78 m http://www.wimbosman.nl/ k info@wimbosman.nl

NL

Press/Media
Specialist Publications
EVO Logistiek / EVO Magazine (Circulation: 6,000) Transport en Logistiek Nederland; Signaalrood 60, 2718 SG Zoetermeer T +31 79 34 67 346 v +31 79 34 67 800 m http://www.evo.nl/ k evo@evo.nl Logistiek - Reed Business bv (Circulation: 16,500) Logistiek - Reed Business bv, Hanzestraat 1, 7006 RH Doetinchem T +31 314 349328 v + 31 314 34 39 91 NT Publishers BV (Circulation: 7,000) Las Palmas, Wilhelminakade 302, 3072 AR Rotterdam T +31 10 28 01 000 v +31 10 28 01 002 m www.nieuwsbladtransport.nl k Redactie.NT@reedbusiness.nl TLN (Transport en Logistiek Nederland) (Circulation: 9,000) Transport en Logistiek, Boris Pasternaklaan 22, 2719 DA Zoetermeer, Postbus 3008, 2700 KS Zoetermeer T +31 79 36 36 187 v +31 79 3636258 m http://www.tln.nl/ k info@tnl.nl

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Key Financial Data 2009

Turnover

FedEx
316

Turnover Turnover (Express) Turnover (Ground) Turnover (Freight) Turnover (Services) Turnover/Employee Turnover/Consignment Turnover/Consignment (Express) Turnover/Consignment (Ground) Turnover/Consignment (Freight) Operational Results Operating Result Operating Result (Express) Operating Result (Ground) Operating Result (Freight) Return Return (Express) Return (Ground) Return (Freight) Cash Flow (net) Profit Net Profit Own Capital Resources Equity Stock Exchange Value

28,316.4m 17,572.4m 6,064.5m 3,522.6m 1,443m 95,948 16.1 6.3 13.9

1,628.8m 918.8m 834.8m 124.7m

5.2 % 13.8 % 3.5 % 1,591.3m

965.2m

11,259.2m 20,854m

Brief Description
FedEx is considered to be the creator of the overnight express service; FedExing is the synonym for express forwarding in the USA. FedEx is characterised by the high motivation and commitment of its employees, which was even the subject of a successful Hollywood film ( Cast Away with Tom Hanks). Based on the total number of aircrafts, FedEx operates the world's largest air fleet, with 664 airplanes. Initially, the company operated exclusively in the express sector. Through acquisitions, however, it also grew into other business areas. The core business is still express service within the USA. This is where the highest turnover is generated. Through acquisitions FedEx has also - primarily in the USA - gained a foothold in the market segments parcel, SCM, LTL and hazardous goods. Through the acquisition of Kinko's (now known as FedEx Office), FedEx also entered into the printing and document business. Altogether FedEx generates about 70% of its total revenues in the USA. In the business year 2009/2010 the domestic parcel business in the USA (FedEx Ground) became the company's main growth driver. The company's total turnover saw a decline, FedEx Ground was the only division to record growth (+5.6%, 5.77bn ). Even more important: with an operating result of 1.024m US dollar the division has exceeded the 1bn dollar mark for the first time. The express division, with a turnover approximately three times higher, recorded a 10% profit increase compared to 2009/2010 (turnover: 16.7bn , EBIT: 874.5 m ). But in Europe FedEx has difficulties. An initial market entry was abandoned in the late 70s following extremely high losses. For the following 2 decades, the integrator offered almost exclusively import and export services from and into the USA. Domestic services in Europe if offered at all were provided through co-operations. But since a few years FedEx expanded its presence and businesses in Europe. Among other things the company established the Cologne/Bonn Airport as its new main hub in Europe in 2010. However, the company's core business are still international services. In 1999 already, the company launched a joint venture with DTW, one of the largest Chinese express operators (FedEx-DTW International Priority). At the beginning of 2007 FedEx acquired DTW's stake and is since then the sole owner of the company. It is also worth noting that a number of innovations in the express business originated from FedEx and were later adapted by rival companies (for example, online tracking & tracing). In the year-long dispute whether its employees should fall under the jurisdiction of the National Labor Relations Act, FedEx prevailed. Despite massive attempts and lobbying efforts of competitor UPS the final decision was in favour of FedEx. Since 2007 UPS tried to ensure that FedEx also has to operate under

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FedEx

the NLA legislation. While the Railway Labor Act, under which FedEx operates, greatly limits employees' rights to strike amongst other things, the NLA makes it easier for staff to unionise.

What the market looks for


The company is characterised by ambitious goals. For example, FedEx is constantly striving for a turnover growth as well as an operating margin of 10% annually. The main points of focus for growth can be seen in the international business, in E-commerce, in new services and in co-operations. The very strong brand, the technological leadership, the strong presence in Asia, the huge financial strength and the company's own huge aircraft fleet are seen as strengths of FedEx. In economically weak times, the large air fleet, which is not working entirely at full capacity, can become a financial burden. This became evident during the economic crisis of the last years which had a huge impact on FedEx. Volumes plunged especially in FedEx's core business and many customers chose slower but less expensive parcel services. FedEx's freight operations were in the red for two years in a row. The fact that, up until now, FedEx's activities outside the USA have been solely in the express business, may have equally negative consequences in the future to the altogether weak European presence compared with rival companies. The company currently holds a market share of about 2% on the European CEP market. Furthermore, in contrast to other huge competitors FedEx lacks a parcel service outside the USA. Additionally, FedEx must deal with declining turnover and profits at Kinko's (renamed to FedEx Office in 2008). FedEx had to write off 70% of the purchase price of around 1.9bn since the acquisition in 2004. FedEx's opportunities for growth are found primarily outside the USA, above all in the Asian market, where FedEx already has a strong position in the express market which is indeed very highly competitive and is regarded as the second-largest operator in the region. FedEx must focus on reducing its dependence on the US market and getting the long-flagging Kinko business under control. FedEx is still involved in the long-running legal dispute about the status of FedEx Ground's drivers, dragging on since 2005. The company has to deal with the accusation that it has declared its drivers as independent subcontractors for tax reasons only. A note from the integrator to the SEC confirms that FedEx has to deal with some 50 class-action suits, various individual procedures and about 40 tax cases in this regard. At the end of 2010 FedEx achieved an important partial victory. A Federal Judge dismissed 20 of 28 class action suits. The court declared that the controls and regulations set up by FedEx applied only to results, for example the timely and safe delivery of consignments. In the opinion of the court the fact that the subcontractors may hire temporary workers and reserve drivers,

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