FedEx, TNT, and DHL Make Big China Announcements

Monday, July 7, 2008 2:02
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Last week sure was an active one for the major logistics companies, and as I was caught up in the information on the Olympic Shutdown, I did not have time (or space) to devote to th stories properly.

So, in the interest of time, here are the big three releases.. and a few comments of mine as well.

1) DHL announce that they were offering a “green” service to China. GoGreen

A first in the logistics industry, DHL calculates the carbon emissions generated by transporting each specific customer shipment from the country of origin to destination, and offsets these emissions by reinvesting in certified carbon management programs such as alternative fuel vehicle technology, solar panels and reforestation projects.

and

DHL-Sinotrans, a 50-50 joint venture between DHL and China National Foreign Trade Transportation (Group) Corp, has bought 43 delivery vans that meet the stringent Europe IV emission standard. (of 1500 total truck)

At this point, I must say that I am not all that impressed by this. Carbon offsetting, something I am still learning about, is not a solution.. it is an apologetic way to feel better. and only 43 trucks of 1500? Keeping in mind that they trucks were all purchased within the last 3 years, I would have expected this to be significantly higher..

Don’t get me wrong. I appreciate the effort, but as someone who has been working with firms on CSR in China and whom write a blog on CSR/ sustainability in China, my advice would have been to hold onto this announcement until a significant improvement in the trucks had been made. Trucks/ planes are their core problem, and I look forward to the day that I read about how they have reduced their carbon spend in those areas.

2) FedEx announces their 5th rate cute for the year

You know you are having problems in a market when you need to adjust pricing 5 times in a year.

Despite a nationwide 20 percent hike in diesel and gasoline prices last month in China, FedEx cut prices for its FedEx First Overnight services by as much as 77 percent, according to a Reuters report.

Operationally, one of the strongest logistics firms in China, FedEx has impressed me with their rollout to date. Where I think this announcement is important is not just that FedEx is having problems really pricing the market, it is that this is a problem that all international firms are going to have to contend with (as I wrote about in my Logistics white paper 2 years ago).

3) TNT announces their overland service to 5 Asian countries

TNT starts the only scheduled road services between China and Southeast Asia
Asia Road Network up to 30% cheaper than air and three times faster than sea Intra-Asia road services poised to support regional trade and business growth

Where this will be interesting to see is just how much traffic they are able to capture. Will their pricing be competitive, and how many of their global clients have been asking for this service (perhaps there is only one).

Overall, even though al of these announcements have some issues that need to be resolved, where I am excited by all of them in some manner is that they each show firms who have made their investments, cleared some major hurdles, and are now looking to expand/ improve/ tweak the model

going back to the DHL announcement, while I believe the GoGreen Service was announced prematurely (wait for results first), lower in the article is a paragraph that I find quite exciting

The GoGreen Express service is part of a series of environmental protection initiatives by DHL. The company has set strict targets for reducing emissions per package sent, tons transported and square meters of real estate used by 10 percent by 2012 and by 30 percent by 2020, as compared to 2007 levels. DHL is the first express and logistics company to set specific carbon efficiency targets.

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