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Non-Tech : FedEx (FDX) -- Ignore unavailable to you. Want to Upgrade?

To: The Prophet who wrote (376)	6/1/1999 10:09:00 AM
From: Darryl Olson	Respond to of 524

RPS to test residential delivery SOURCE: Business Times Online Singapore - Print Circ 35,118 SUPPLIER: World Wide Web DATE: 05-27-1999 HEADLINE: FDX unit to test business to residence delivery FDX Corp's RPS Inc, the No 2 US small-package ground carrier, will test a new service designed for companies that ship to residences as it tries to grab more of the booming market for electronic-commerce orders. Less than 10 per cent of RPS's orders now go from businesses to residences. Depending on the results of its tests, RPS could expand the service throughout the US as early as March 2000. The market for items ordered on the Internet and delivered to homes is expected to jump sixfold by 2003 to US$108 billion (S$183.5 billion), according to Forrester Research Inc. FDX's Federal Express, the world's largest express-delivery company currently focuses on business-to-business orders. Deliveries to residential areas generally cost companies more because there are not as many orders to specific areas as with business-to-business, Precision Logistics LLC analyst Joseph Guerrisi said. "The key's going to be getting the delivery densities that will allow them to make this a cost-effective move," Mr Guerrisi said. In July and August, Pittsburgh-based RPS will start testing the program in the Pittsburgh area, using different contractors, facilities and customized services than it uses now. Its main competition will be closely held United Parcel Service of America Inc, the world's largest package-delivery company, and the US Postal Service, analysts said. In January 1998 FDX bought trucking company Caliber System Inc, which owned RPS, for US$2.25 billion as part of an effort to better compete with UPS.

To: The Prophet who wrote (376)	6/1/1999 10:15:00 AM
From: Darryl Olson	Respond to of 524

Possible acquisition? SOURCE: CNN Interactive SUPPLIER: World Wide Web DATE: 05-17-1999 HEADLINE: FDX Buying GeoLogistics? Source: Journal of Commerce If it happens, the much talked about and highly anticipated purchase of GeoLogistics by FDX Corp. will go down as one of the worst-kept secrets in recent memory. It comes close to the widely predicted merger of Federal Express and Caliber Systems in late 1997.It's no secret that FDX needs a greater presence in Europe. It also is no secret that GeoLogistics, despite its cobbled-together make-up of five separate companies, has an enviable European network. Nor that the Golden, Colo.-based logistics company is amenable to selling pieces of its business - it's newly acquired Caribbean Air Services unit is being actively shopped for sale. And it is also well known that the company has struggled to make its North American forwarding operation (the former LEP Profit) work. In March, the company announced a new roster of executives to try and pump life into the struggling, money-losing unit. The combination of FDX and GeoLogistics is a perplexing one. Although neither company would confirm that talks are under way, the fact that due diligence is ongoing is all the buzz in the industry. However, companies looking at buying other companies are as common in the transportation industry as in any other. Some deals go through, most don't. "The purchase of GeoLogistics, if it happens and I don't know any more than anyone else, makes a good case," said Paul Jackson, chief executive officer of Triangle Management Services, a London-based logistics consultancy. "GeoLogistics is particularly strong in Europe and weak in America. There is no question FDX needs a stronger European presence." There are other forwarders out there that are infinitely stronger than GeoLogistics and could produce a much more powerful combination. Fritz Cos., which already handles FedEx's customs brokerage business, Circle International, Expeditors International and AEI all come to mind, but because they are dominated by chief executives that really control the identity of the company, the melding into the FDX family would be more difficult. "Geo has developed a team approach, making the merger less of a risk," said Jackson. It is also cheap. The rumored purchase price of the forwarder is somewhere aound $350 million - much less than any of the other multinational forwarders could be bought for and substantially less than it would take to build a network from the ground up. FedEx tried that once and failed miserably. Which pieces of the company would be included in the sale is the big question. Obviously FDX wants the international forwarding arm, but what it would do with the problem-plagued domestic unit, the home moving company Bekins and the Russian special projects arm Matrix is unknown. "GeoLogistics as a whole doesn't make sense, especially Bekins," said Alex Brand, an analyst with Scott & Stringfellow. "But it does fit into their strategy of trying to leverage nonasset-based outsourcing alternatives along with their renewed focus on freight. They are going to do something with a forwarder, but I would be shocked if they took on all of GeoLogistics and bought them out of their problems." The uncertain future of Geo's domestic operation already is causing concern among some shippers. One Geo customer said he would have a hard time signing a new contract until all the rumors about the company are laid to rest. If FDX purchases GeoLogistics or any other forwarder, it will drastically change its relationship with other forwarders that pump millions into FedEx's heavy freight sales. One such company is MSAS Cargo International. MSAS has a number of joint service offerings with FedEx and Caliber Logistics. "This won't change our alliance," said Jerry Levy, MSAS's vice president of logistics. "We will continue to work with Caliber no matter what happens." However, MSAS is a logistics powerhouse in its own right and isn't reliant upon FDX business to make it so. "Our logistics revenues are very diversified. Caliber is just one piece of the puzzle," Levy said. If FDX is really looking to make a splash in the third-party logistics arena, is GeoLogistics the right choice? Many don't think so. "I think they are buying a lemon," said Julian Keeling, president of Consolidated International Inc., an air freight wholesaler. "The company that makes much more sense is MSAS. I think they are the real sleeping giant of the industry." Keeling predicts there will be massive fallout from FedEx's biggest freight forwarding customers if the deal goes through. "It will strain relations with the major forwarders. It will be a tough sell job to convince them that their business is safe." Likewise, GeoLogistics may find it more difficult to ecure space on the world's commercial carriers if they are teamed up with FedEx. The logistics industry has a case of merger mania that began with KPN's purchase of TNT Express Worldwide a few years back. Germany's Deutsche Post has fueled the fire in recent months by buying Danzas, a piece of DHL International and NedLloyd's package business. "There is no question there is a consolidation trend hitting this industry," said Guenter Rohrmann, president and chief executive officer of AEI. The marriage of GeoLogistics and FDX is "not even concerning" as a potential competitor, he said. If it's well managed, the business "will be a strong competitor. But we can't be frightened," said Rohrmann. "It will be such a large company. There are benefits in being a forwarder like AEI with the independence to give our freight to anybody."