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BrowntailWhale
Topic Author
Posts: 182
Joined: Thu Oct 18, 2001 5:17 am

UPS To Buy Stake In DHL?

Fri Aug 24, 2007 9:51 am

8/23/2007 12:38:00 PM ET Related symbols: DBMSMWDSIUPSBloomberg
German Stocks Advance, Led by Siemens, Deutsche Post Shares

By Andreas Hippin

Aug. 23 (Bloomberg) -- German stocks advanced for a fifth day as concerns eased that a rout in credit markets will hurt corporate earnings. Siemens AG and Deutsche Boerse AG paced the gains.

Deutsche Post AG rose on speculation U.S. competitor United Parcel Service Inc. and private-equity firm Apax Partners Worldwide may bid for a stake in Europe's biggest postal service.

Deutsche Post added 48 cents, or 2.3 percent, to 21.31 euros. KfW is Deutsche Post's biggest investor with a 30.6 percent stake. The bank, which sold 5.9 percent of its shares in July 2006, said in January it may sell further stakes to private-equity firms. ''Deutsche Post are boosted by the rumor Apax and UPS might bid 28 euros a share for about 30 percent in the company,'' said Thomas Nagel, a trader at Equinet AG in Frankfurt. ''There has also been talk the shares might get suspended later due to newsflow concerning the KfW stake.'' Nicole Mommsen, a spokeswoman for Deutsche Post in Bonn, and Alexander Mohanty, a spokesman for KfW in Frankfurt, declined to comment today.
 
kiwiandrew

RE: UPS To Buy Stake In DHL?

Fri Aug 24, 2007 3:08 pm

Actually I think this would have been more accurately titled "UPS To Buy Stake In Deutsche Post? "

Yes , I am aware that Deutsche Post owns DHL , but I would imagine that if this rumour turns out to be true that for competition reasons DHL would have to be sold off , I cannot imagine for a second that the EU regulators would permit DHL to come under partial or complete UPS influence/ownership ( I realise that the rumoured stake is'only' 30% and that presumably the UPS portion of that would be a lot smaller than that of APAX but I still think it would be sufficient to have considerable influence )
 
blueflyer
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RE: UPS To Buy Stake In DHL?

Fri Aug 24, 2007 3:32 pm

Quoting Kiwiandrew (Reply 1):
I cannot imagine for a second that the EU regulators would permit DHL to come under partial or complete UPS influence/ownership

And UPS most likely knows that as well, so what does UPS want out of DPWN that is worth over € 10,000,000,000 of UPS' and Apax's money ? It's not just the "express" activities of DHL that DPWN might be forced to spin-off if UPS comes onboard, but probably DHL Global Forwarding and DHL Excel which do compete with their respective divisions of UPS, leaving behind Deutsche Post, Postbank and DHL Freight (DHL Freight and UPS Freight do not compete with one another because they're present in different geographical markets).

I can see UPS wishing that DHL Express be spun off from DPWN to weaken it, but I can't imagine anyone paying so much to make it happen...
 
aogdesk
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RE: UPS To Buy Stake In DHL?

Fri Aug 24, 2007 3:41 pm

30% is a hell of a chunk......this will be interesting to see how it plays out.
 
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fxramper
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RE: UPS To Buy Stake In DHL?

Fri Aug 24, 2007 3:48 pm

This is a joke. Won't happen.  no 

Plenty on UPS employee site to say the opposite.
 
BrowntailWhale
Topic Author
Posts: 182
Joined: Thu Oct 18, 2001 5:17 am

RE: UPS To Buy Stake In DHL?

Sat Aug 25, 2007 12:14 am

Quoting FXramper (Reply 4):

Browncafe is hardly an official UPS website. They are just a bunch of boxsmashers who speculate just as do most on this board. The FACT is that Bloomberg is NO joke. I can see why YOU, FXramper want to believe that this is a joke, because if it is NOT, then FDX will be in deep doodoo.
 
wjcandee
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Joined: Mon Jun 05, 2000 12:50 am

RE: UPS To Buy Stake In DHL?

Sat Aug 25, 2007 10:48 am

Quoting BrowntailWhale (Reply 5):
I can see why YOU, FXramper want to believe that this is a joke, because if it is NOT, then FDX will be in deep doodoo.

Actually, this would benefit FX as well; eliminating a competitor, creating worldwide duopoly.
 
UPS Pilot
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Joined: Tue May 18, 1999 1:17 pm

RE: UPS To Buy Stake In DHL?

Sat Aug 25, 2007 7:37 pm

Why would UPS want to buy Deutsche Post AG? Most aircraft are owned by contractors so it wouldn't be because of aircraft aquisitions. UPS already has an extensive air network so it wouldn't be that. UPS has built a solid worldwide presence so it wouldn't be that. Eliminating a competitor? Why not do it thru growing the business instead of buying a competitor? There is only one reason and that is because FX is expanding European operations. Other than that it makes no sense at all. Grab Polar for aircraft and routes.
 
azstagecoach
Posts: 137
Joined: Thu Mar 23, 2006 11:55 pm

RE: UPS To Buy Stake In DHL?

Sat Aug 25, 2007 8:00 pm

If true actually this is a brilliant move. Deutsche Post is one of the largest delivery services in Europe, and UPS gets instant coverage without having to build their own infrastructure. What's more, anyone who's sent a package from Germany knows that DP gets a biiig premium for their services
 
UPS Pilot
Posts: 897
Joined: Tue May 18, 1999 1:17 pm

RE: UPS To Buy Stake In DHL?

Sun Aug 26, 2007 12:11 am

Quoting Azstagecoach (Reply 8):

UPS has had European operations since 1976. The infrastructure is there. The DP is Govt. subsidized thats why the big premium. Just like the United States Postal Service here in the states.
 
FWAERJ
Posts: 2834
Joined: Wed Jun 07, 2006 1:23 am

RE: UPS To Buy Stake In DHL?

Sun Aug 26, 2007 1:03 am

Quoting UPS Pilot (Reply 9):
The DP is Govt. subsidized thats why the big premium. Just like the United States Postal Service here in the states.

The US Postal Service is a self-sufficient government-owned corporation that is not subsidized by taxpayer dollars or the US government. However, it's a very common misconception here in the States that the USPS is subsidized, when they have not been subsidized since 1970 (the year the USPS was established to take over the operations of the government-subsidized Post Office Department).

[Edited 2007-08-25 18:08:54]
B721/722/731/732/733/735/73G/738/739/742/752/753/762/763, A300/319/320, DC-9/10, MD-82/83/88/90, ERJ-140/145, CRJ-200/700, Q200, SF340, AS350
 
bhmbaglock
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RE: UPS To Buy Stake In DHL?

Sun Aug 26, 2007 1:41 am

Quoting FWAERJ (Reply 10):
The US Postal Service is a self-sufficient government-owned corporation that is not subsidized by taxpayer dollars or the US government.

Bullshit! Being given a monopoly on the majority of their business with rate increases as needed is the biggest subsidy imaginable. They're an anachronism that should be allowed to thrive or die all on their own.
Where are all of my respected members going?
 
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ER757
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RE: UPS To Buy Stake In DHL?

Sun Aug 26, 2007 1:48 am

Quoting BlueFlyer (Reply 2):
It's not just the "express" activities of DHL that DPWN might be forced to spin-off if UPS comes onboard, but probably DHL Global Forwarding and DHL Excel which do compete with their respective divisions of UPS, leaving behind Deutsche Post, Postbank and DHL Freight

I can only hope you are correct! It makes sense that UPS would make a move like this for those reasons. As a long time worker in the air freight business and as one who's been part of mergers/aquisitions, buyouts etc - I would wlecome separation from the huge conglomerate the DPWN has become.
 
ANother
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Joined: Thu Nov 03, 2005 2:47 am

RE: UPS To Buy Stake In DHL?

Sun Aug 26, 2007 2:02 am

Quoting Kiwiandrew (Reply 1):
I cannot imagine for a second that the EU regulators would permit DHL to come under partial or complete UPS influence/ownership

Andrew, would you substantiate this please? AFIK It is not EU policy (be it the commission, parliament or the council) to oppose non-EU investment in EU corporations. In respect of aviation EU policy favours no ownership and control rules - but accepts the current requirement that EU airlines must be owned (50% +1 share) by EU nationals - because other nations require more restrictive provisions for their airlines.

The German post office could be owned 100% by non-EU nationals, DHL OTOH would have to be owned (50% + 1) by EU nationals to retain their traffic rights within the EU.
 
kiwiandrew

RE: UPS To Buy Stake In DHL?

Sun Aug 26, 2007 5:19 pm

Quoting ANother (Reply 13):
Andrew, would you substantiate this please? AFIK It is not EU policy (be it the commission, parliament or the council) to oppose non-EU investment in EU corporations. In respect of aviation EU policy favours no ownership and control rules - but accepts the current requirement that EU airlines must be owned (50% +1 share) by EU nationals - because other nations require more restrictive provisions for their airlines.

The German post office could be owned 100% by non-EU nationals, DHL OTOH would have to be owned (50% + 1) by EU nationals to retain their traffic rights within the EU.

I think perhaps you have misunderstood my post , I am not talking about issues of 'foreign' ownership , I am talking about the anti-competitive nature of any such deal if it happened . If you look at the courier/logistics/freight forwarding industries and see how much are tied up already by Deustche Post and how much by UPS I cannot imagine that it would be anything other than anti-competitive to have any form of tie-up between the two without substantial divestment of some subsidiaries - as others have noted the level of divestment that would almost certainly be required would make it questionable what UPS would actually stand to gain from their participation
 
ANother
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Joined: Thu Nov 03, 2005 2:47 am

RE: UPS To Buy Stake In DHL?

Sun Aug 26, 2007 7:26 pm

Quoting Kiwiandrew (Reply 14):
I think perhaps you have misunderstood my post ,

Ah, thanks for the clarification.
 
UPS Pilot
Posts: 897
Joined: Tue May 18, 1999 1:17 pm

RE: UPS To Buy Stake In DHL?

Sun Aug 26, 2007 10:16 pm

Quoting FWAERJ (Reply 10):
The US Postal Service is a self-sufficient government-owned corporation that is not subsidized by taxpayer dollars or the US government. However, it's a very common misconception here in the States that the USPS is subsidized, when they have not been subsidized since 1970 (the year the USPS was established to take over the operations of the government-subsidized Post Office Department).

Why is it that the USPS does not pay any taxes on vehicles, registration on vehicles, taxes on property or taxes period? UPS, Fed EX, and DHL have too!!!! Why are other companies allowed to deliver first class mail? Why is the price of stamps for first class mail always increaseing but the products they compete with UPS, Fed Ex and DHL such as Express mail stay the same? Why does the USPS say they need to increase the price of the stamp because they are losing money? I'll tell you. They deliver Express Mail without a weekend premium charge that UPS, Fed EX and DHL have to charge in order to make profit. They use the first class stamp and hide behind being a government agency to have and unfair competitive edge over the other more efficient carriers. If they are not subsidized then make them pay taxes and take away the unfair competive edge of hiding behind the government.
 
FXMD11
Posts: 172
Joined: Fri Aug 27, 2004 1:34 pm

RE: UPS To Buy Stake In DHL?

Mon Aug 27, 2007 5:07 am

Quoting UPS Pilot (Reply 7):
Most aircraft are owned by contractors so it wouldn't be because of aircraft aquisitions

I always thought that all the aircrafts are owned by contractors like ABXAir and European Air Transport. Do they actually own some aircrafts?

Quoting BlueFlyer (Reply 2):
but probably DHL Global Forwarding and DHL Excel which do compete with their respective divisions of UPS, leaving behind Deutsche Post, Postbank and DHL Freight (DHL Freight and UPS Freight do not compete with one another because they're present in different geographical markets

The entire Deutsche Post Worldnet is a large junk of companies.DPWN had no organic growth over the past years.When they bought Exel Supply Chain (112K People worldwide) they needed a logistic and supply chain arm, which they didnt have until Sep 2005. Danzas Air and Ocean bought AEI and was then bought by DPWN, who bought Airborne earlier. Exel had a Freight Arm too.All these companies are now under DHL Global Forwarding.It has been rumoured that sooner or later, DGF, DHL Express and DHL Freight plus Exel Supply Chain will seperate again from the big mother, DPWN. DPWN has 500K people working worldwide and is now considered the 2nd largest commercial employer in the world.Buying DHL Express was actually a neccessary move as they wanted to enter the North American Market. That was a really hard transition with lots of obstciles.

There a 3 very large integrators right now, FDX, UPS and DHL. I do not see this happen, but believe that UPS is out to buy some one in due course. These are my 2cents
 
blueflyer
Posts: 4352
Joined: Tue Jan 31, 2006 4:17 am

RE: UPS To Buy Stake In DHL?

Mon Aug 27, 2007 12:32 pm

Quoting FXMD11 (Reply 17):
I always thought that all the aircrafts are owned by contractors like ABXAir and European Air Transport. Do they actually own some aircrafts?

I supposed it depends on how you define ownership. ABX Air is obviously owned by US citizens otherwise it wouldn't be able to operate domestic flights in the US. Several other DHL "contractors" such as European Air Transport are owned by DHL Aviation, itself a subsidiary of DHL Worldwide Express.
 
wjcandee
Posts: 10301
Joined: Mon Jun 05, 2000 12:50 am

RE: UPS To Buy Stake In DHL?

Mon Aug 27, 2007 2:35 pm

I appreciate your insights always, but a few thoughts...

Quoting UPS Pilot (Reply 16):
Why is the price of stamps for first class mail always increaseing but the products they compete with UPS, Fed Ex and DHL such as Express mail stay the same?

They don't. Priority mail used to be "two pounds for two bucks". It's now over $4 for a light envelope, and higher rates apply over one pound. As a frequent Express Mail user, I can tell you that what recently cost $12 now costs $16. Moreover, UPS and FedEx adjust their rates to corporate customers on these premium products to whatever it takes to get the business; the USPS can't do that. Also, UPS and FedEx can add fuel surcharges, which are really just price increases, at will, whereas the USPS can't. Bottom line, the price is going up at USPS as well.

Quoting UPS Pilot (Reply 16):
They deliver Express Mail without a weekend premium charge that UPS, Fed EX and DHL have to charge in order to make profit.

What you overlook here is that the Post Office is already delivering residential and business mail on Saturday, which means that the route carriers are all out there anyway. Saturday first-class mail delivery isn't going anywhere, for political reasons. Recognize that some countries still have 7-day-a-week mail delivery and we don't. As long as the linehaul, sort and local delivery machinery is already going to be doing its rounds on Saturday just like any other day, there's no reason that the USPS shouldn't be making its deliveries of Express and Priority Mail. And if they are willing to pay UPS and FedEx to fly that mail on Friday night, those carriers shouldn't be bitching about it. Carriers like UPS and FedEx, which have traditionally served businesses, make in essence a special delivery on Saturday, so that's why they charge (and receive) an extra fee.

Quoting UPS Pilot (Reply 16):
unfair competitive edge over the other more efficient carriers

Stand in line at a post office and see who is shipping Express Mail and Priority Mail. Much of the USPS's "premium" business is one-shot stuff from Average Joes who send two items a year. While both UPS and FedEx have tried ways to capture some of this one-time very-retail business by funneling it through Office Depot, Staples, MBEtc -- and succeed at capturing a chunk of it at very inflated prices -- they sure don't want these people as direct customers because servicing those clients is expensive as heck. As to the businesses that used to send by Priority Mail, such as Amazon, a gigantic portion of that business is now being carried by UPS 3-day and ground service; the USPS doesn't compete on price, tracking, accounting and service and Amazon, et al don't want to pay extra for it. UPS also has profit centers in mail-related businesses, so it's a two-way street for them. For example, UPS and FedEx carry USPS business on their planes and have "SmartMail"-type operations where they pick up parcels and flats from industrial customers, do the profitable sorting and ground linehaul, and dump it into the hands of the USPS to do the expensive local residential delivery, providing a much-lower-quality product than their typical ground product to those shippers who don't want to pay even for UPS or FedEx Ground. It seems to me that the USPS actually puts a lot of money in the hands of these two giants, even while it "competes" with them.
 
UPS Pilot
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RE: UPS To Buy Stake In DHL?

Mon Aug 27, 2007 7:31 pm

Quoting Wjcandee (Reply 19):
They don't. Priority mail used to be "two pounds for two bucks". It's now over $4 for a light envelope, and higher rates apply over one pound. As a frequent Express Mail user, I can tell you that what recently cost $12 now costs $16. Moreover, UPS and FedEx adjust their rates to corporate customers on these premium products to whatever it takes to get the business; the USPS can't do that. Also, UPS and FedEx can add fuel surcharges, which are really just price increases, at will, whereas the USPS can't. Bottom line, the price is going up at USPS as well.

Priced still far below the big three!!! Why because they can make it up with the first class stamp and the items I listed in the previous posts.

Quoting Wjcandee (Reply 19):
What you overlook here is that the Post Office is already delivering residential and business mail on Saturday, which means that the route carriers are all out there anyway. Saturday first-class mail delivery isn't going anywhere, for political reasons. Recognize that some countries still have 7-day-a-week mail delivery and we don't. As long as the linehaul, sort and local delivery machinery is already going to be doing its rounds on Saturday just like any other day, there's no reason that the USPS shouldn't be making its deliveries of Express and Priority Mail. And if they are willing to pay UPS and FedEx to fly that mail on Friday night, those carriers shouldn't be bitching about it. Carriers like UPS and FedEx, which have traditionally served businesses, make in essence a special delivery on Saturday, so that's why they charge (and receive) an extra fee.

You are right but fail to mention in metropolitan markets they deliver Express mail on Sunday. Yes I said Sunday with no upcharge or premium. They also deliver on Holidays, Express mail with again no upcharge. How you ask? Charge more for the core business, the First class stamp and pay no taxes.

Quoting Wjcandee (Reply 19):
Stand in line at a post office and see who is shipping Express Mail and Priority Mail. Much of the USPS's "premium" business is one-shot stuff from Average Joes who send two items a year. While both UPS and FedEx have tried ways to capture some of this one-time very-retail business by funneling it through Office Depot, Staples, MBEtc -- and succeed at capturing a chunk of it at very inflated prices -- they sure don't want these people as direct customers because servicing those clients is expensive as heck. As to the businesses that used to send by Priority Mail, such as Amazon, a gigantic portion of that business is now being carried by UPS 3-day and ground service; the USPS doesn't compete on price, tracking, accounting and service and Amazon, et al don't want to pay extra for it. UPS also has profit centers in mail-related businesses, so it's a two-way street for them. For example, UPS and FedEx carry USPS business on their planes and have "SmartMail"-type operations where they pick up parcels and flats from industrial customers, do the profitable sorting and ground linehaul, and dump it into the hands of the USPS to do the expensive local residential delivery, providing a much-lower-quality product than their typical ground product to those shippers who don't want to pay even for UPS or FedEx Ground. It seems to me that the USPS actually puts a lot of money in the hands of these two giants, even while it "competes" with them.

Dell Computer used the USPS. Amazon used the USPS. A number of very huge shippers used the USPS. They switched back because of service failures and poor tracking. Mail is carried on UPS and FDX aircraft. they have contracts. Why because alot of the airlines were sick of dealing with the USPS. UPS , FDX and DHL use the USPS for last mile service because it is cheaper. When the USPS has an unfair advantage over the big three it makes sense for them to use the USPS for the money losing segment of the delivery.
 
bhmbaglock
Posts: 2489
Joined: Thu Jul 14, 2005 7:51 am

RE: UPS To Buy Stake In DHL?

Mon Aug 27, 2007 8:33 pm

Quoting Wjcandee (Reply 19):
What you overlook here is that the Post Office is already delivering residential and business mail on Saturday, which means that the route carriers are all out there anyway.

These packages are generally not delivered by the same person delivering normal mail. Definitely not on Sundays or Holidays.
Where are all of my respected members going?
 
blueflyer
Posts: 4352
Joined: Tue Jan 31, 2006 4:17 am

RE: UPS To Buy Stake In DHL?

Tue Aug 28, 2007 1:09 am

Quoting Wjcandee (Reply 19):
the USPS doesn't compete on price, tracking, accounting and service

The USPS seems to be far behind the big three in IT infrastructure. How often does the USPS give actual real-time tracking information ? Most of the time, it seems, all it can do is state that it has received a package for shipping, even a day after the package has already been received. If they spend less money on their support infrastructure, they certainly can afford to charge less for their service.

Quoting UPS Pilot (Reply 20):
Priced still far below the big three!!! Why because they can make it up with the first class stamp and the items I listed in the previous posts.

Pricing is approved by the 11-member Board of Governors, 9 of which are political appointees (the other two chosen by the 9 appointees). Once the board agrees to change pricing, it has then to get approval from the Postal Regulatory Commission, another group of five political appointees. These commissioners and their staff are frequently hauled in front of Congress (I'll spare you the actual name of the committees) to explain themselves in front of the politicians who confirmed them in their cushy jobs and who do not want their voters bitching at the cost of a stamp...

If you want to settle the argument one way or the other, all the information you need is at http://www.usps.com/financials/welcome.htm
Revenues and costs are broken down by mail classes.

Quoting BHMBAGLOCK (Reply 21):
These packages are generally not delivered by the same person delivering normal mail. Definitely not on Sundays or Holidays.

Express mail generally comes from a Sectional Center Facility, most of which operate 24/7 whether or not express mail is being delivered, so the extra cost of delivering them on week-ends and holidays is much smaller than for FedEx or UPS to open a depot that otherwise would be closed to deliver on Saturdays, hence why the USPS can deliver without surcharge whereas the integrators do charge more.
 
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ER757
Posts: 4031
Joined: Tue May 10, 2005 10:16 am

RE: UPS To Buy Stake In DHL?

Tue Aug 28, 2007 4:46 am

Quoting FXMD11 (Reply 17):
The entire Deutsche Post Worldnet is a large junk of companies.DPWN had no organic growth over the past years.When they bought Exel Supply Chain (112K People worldwide) they needed a logistic and supply chain arm, which they didnt have until Sep 2005. Danzas Air and Ocean bought AEI and was then bought by DPWN, who bought Airborne earlier. Exel had a Freight Arm too.All these companies are now under DHL Global Forwarding.It has been rumoured that sooner or later, DGF, DHL Express and DHL Freight plus Exel Supply Chain will seperate again from the big mother, DPWN. DPWN has 500K people working worldwide and is now considered the 2nd largest commercial employer in the world.Buying DHL Express was actually a neccessary move as they wanted to enter the North American Market. That was a really hard transition with lots of obstciles.

You've got your timelines a little mixed up here. Deutsche Post bought Danzas well before purchasing AEI, so it wasn't Danzas that bought AEI at all, it was Deutsche Post not the other way around. Also, they bought DHL before buying Airborne. Also, DPWN is the 7th largest employer, not 2nd. I do think the whole DHL arm will be spun off eventually and with any luck DGF and Exel Supply Chain will divorce themselves from the DHL brand as quickly as possible. It's been nothing but confusion for our customers and vendors since the re-branding was begun.

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