Blog Post #4 Question #1

The major news in the transportation industry is that Union Pacific CEO, James Young, will be taking a leave of absence to undergo pancreatic cancer treatment. Young will remain Chairman of the Board, but the Executive Vice President John Koraleski will take over as CEO and president during Young’s leave. The stock prices have soared since Young took over so this is unfortunate news for the stakeholders in Union Pacific. In the courier industry there is a lot of new jobs being created; the majority of these jobs are coming from advances in technology. However, the bigger news is about UPS’s efforts to purchase TNT Express. Both Fed-Ex and UPS have expressed interest in purchasing the company, but UPS is actually stepping up to the plate and making an offer. TNT is valued somewhere between five billion to eight billion Euros, which is a significant spread  While TNT rejected UPS’s second offer to buy TNT, the two companies are remaining in talks and are expected to probably reach a deal at a higher price.TNT’s stock prices have sky-rocketed since the offer that from UPS that came on Friday. If and when the deal is approved and UPS purchases TNT it could mean a major shift for the courier industry especially in Europe. This could also mean that UPS may have to do some restructuring in order for their operations to flow smoothly and efficienly. This could mean that Fed-Ex will be majorly cut out and eliminated from the European market which will mean that TNT and UPS will have a far more significant market share in Europe. TNT is supposed to update its stockholders during the next week and come up with a new strategy and game plan for moving forward. Niether of the companies are choosing to comment on the progress of the merger or the details of it.

http://online.wsj.com/article/BT-CO-20120302-709202.html

http://online.wsj.com/article/SB10001424052970203986604577257150497018544.html

http://online.wsj.com/article/SB10001424052970203358704577235251316965674.html

The Success of a Courrier

BLOG THREE

Danny Zelenka

In the courier industry the key to success is in how the company markets itself globally. In such a competitive industry it is vital that a company must shape and mold the companies appearance in order to attract and maintain customer loyalty. Companies such as UPS, DHL or FEDEX carry out specific operations to 220 countries worldwide and are focused on differentiating their services in each country with hopes to attract a customer loyalty.These big companies have succeeded in attracting a steady amount of customers by paying attention to the personal touches by marketing beyond borders.  In today’s economy these big companies reign supreme due to their expertise in the field because it is vital in today’s global market place that products and documents be delivered as promptly as possible. As stated previously there is a tremendous amount of competition in the industry for many reasons for example its importance and simplicity.

The success of these big firms in this industry is correlated to how much they can offer the consumer; some couriers can deliver a package two days after it has been sent directly to the door. When a company establishes its quality and establishes its legitimacy in the field people will start become loyal to that company.

The reason why FEDEX, UPS and DHS are currently the most successful couriers of the time due to the fact that they have developed strong customer loyalty through reliability and a well connected system of international delivery through which they can deliver lorries on the ground with thousands of vans usually if the package needs to be delivered in a sensitive time frame. If the parcel is very heavy the company arranges a sea freight to transport it. A good courier company will be able to meet the customer’s need by arranging time of delivery and dimensions of the parcel.

Blog 3#1 What non-US companies are key players in the industry?

Have you guys ever heard about such a company with approximate 100000 employees, network covering more than 220 countries and territories, 11.1 billion euros, and even 250 dedicated aircraft, 32000 vehicles, 4000 facilities? Yeah, that is DHL.

From those data above, DHL Express, a German company, stands out in courier industries. First of all, one of most essential factors for courier industries is network and nearly every company fails to compete with DHL in such fields. It represents, from the incomplete statistics, that its network covers 220countries, 67% of the whole world. Moreover, DHL has established its own air shipping lines, maintaining hundreds of DHL airports over the world. For example, 10 of Top 50 DHL airports, they are Abidjan, Beirut, Copenhagen, Dubai, East Midlands, Frankfurt, Johannesburg, ParisToronto, Taipei. By the way, you can easily experience its amazing global connectedness from its official website.http://www.dhl.com/en/about_us/logistics_insights/global_connectedness_index/gci_results.html

 

       As we know, DHL always aims unvaryingly at delivering packages to the right place within the right time. Through a network spanning more than 220 countries and territories and more than 500 airports globally, they provide courier and express services to business and private customers. Whether it is documents or parcels, Same Day, Time Definite or Day Definite delivery, DHL Express has the service you are looking for.

       In brief, DHL makes a spectacular achievement in courier industries.

Tansportation. Xin Yin

Blog Post #3 Question #3 Overseas Production and Outsourcing

Companies in the transportation industry do a signficant amount of outsourcing. Most that the materials that are used in the industry are outsourced. Things such as planes, ships, trucks, and cars are usually manufactured by another company that manufactures them with that company’s logo. Many of the products that are supplied to transportation industry companies are manufactured overseas. Many companies, such as UPS, try to keep as many of their services “in house” so they can maintain control and insure quality to their customers. UPS takes a tremendous amount of pride in all their many drivers who have driven millions of miles without an accident, and that most of their people start as drivers in the company. Some companies however, such as Fed-Ex, outsource many of their services including their drivers, which has been known to cause some issues. This creates the problem where they are unable to insure the quality of their services. These companies may choose to outsource various other things such as IT, call centers, or box/envelope manufacturing. Where these various goods and services are produced depends on the company and the company that the production is outsourced to. The transportation industry does not have a lot of overseas production because what they produce is a service to people where they transport either goods or people from one location to another, so the only thing that could be produced overseas would be their resources and that will vary by company. Outsourcing for these companies is a case by case basis both on what is outsources and if it is a good choice to outsource. As I stated before, it is a horrible practice for Fed-Ex to outsource their drivers, due to the fact that they have limited training they are more likely to get into car accidents. Another major issue that comes up with outsourcing and has an ethical element to it is pay and benefits, companies that outsource more often than not do it so that they can pay people less and do not have to cover other benefits such as healthcare and insurance.

http://www.braunconsulting.com/bcg/newsletters/winter2004/winter20041.html

http://www.alsbridge.com/industries/transportation.html

Blog #3 Question #1 Kimbo Bocchini

Currently the two largest Courier Industry corporations are Fedex and UPS.  Accounting for approximately half of the entire courier industry, UPS and Fedex each make up about 25% each in market share.  A major reason for their unmatchable market share dominance is their countless destinations and extensive networks.  UPS the largest player in the industry delivers packages to over 200 countries and territories while their rival Fedex ships to over 210 countries and territories.  To further benefit these industry giants in August, 2006 Fedex and UPS struck up an agreement for domestic air transportation of mail until 2013 which would lead to a stronger domestic front encouraging a more powerful international approach to the global market.

http://clients.ibisworld.com/globalindustry/keycompetitors.aspx?indid=1660

Fedex’s key weapon is their Fedex Express which is a subsidiary of Fedex Corporation.  Currently it is the world’s largest express delivery company.  In addition to their extensive express delivery they also maintain their prowess via Fedex Ground which is the leading small package carrier in North America.  Fedex like all the players in the industry chooses to use hubs to carry out their delivery.  This system proves most efficient for air travel as airlines also use this system.  Hubs for Fedex are located throughout the U.S, Tokyo, Paris, Dubai, Frankfurt, and other smaller locations.

(The Hubs of UPS, Fedex, DHL, and TNT can all be found on this map of hubs of the Courier Industry).  http://people.hofstra.edu/geotrans/eng/ch5en/appl5en/upshubs.html

Another contributing factor to UPS’s unrivaled success is that their focuses are evenly distributed across the globe.  Since the courier industry utilizes the Hub system instead of the hub and spoke system UPS has strategically placed its hubs in Canada, Germany, and Taiwan.  Spanning three of the most populated continents in the world UPS has established its presence globally.  In addition, UPS is investing in new technology and opening up new business areas to assist in their globalization.

Deutsche Post AG better known as DHL in the U.S. is the 3^rd most prominent player in the market.  It makes up about 9% of market share and is a German based company.  Like Fedex and UPS it delivers to over 200 countries, yet its performance declined significantly beginning in 2008 and declined at an estimated rate of 287% over the five years to 2010.  Although its performance in the U.S. severely declined its prominence in the European and Asian express market remained a lead.  Thus, Deutsche Post AG isn’t so much a courier company that does well in the United States, but has powerful operations around the rest of the world.  According to an article by the NY Times published in October, DHL had made vast efforts to regain its presence primarily in the United States, but internationally as well.  They have focused on their advertising campaigns having it translated into 25 languages broadcasted across 280 television stations in 360 print publications worldwide.

http://www.nytimes.com/2011/10/21/business/media/shippers-vie-for-greater-global-share.html?_r=1&ref=fedexcorporation

Entrepreneurship

Entrepreneurship is a vital trend in order to encourage an economy to go beyond functioning to actually thriving. There are many factors that go into the gamble of finding a need and filling it. What is needed are enterprisers who find the need and launch the business along with a culture and venture capital firm that are open to accepting creativity and risk in order to help the new business to stay alive and grow. The goal for a new business is to generate as much revenue as possible from offering something new, by doing so it would be wise to start a business or product line that reaches out to as many demographics as possible. The transportation industry has a direct correlation with a nations wealth and consumption, the more consumption a nation indulges itself in equals the need for shipping and transportation. The government runs the transportation industry in most nations thus leaving little room for emerging companies to compete. Although there is little room for emerging companies there is a constantly growing desire to improve and alter transportation systems for either minimizing the consumption and reliance of foreign oil, electricity or the going green initiative, which leaves space for entrepreneurs to present new technologies in order to meet the needs to innovate and ameliorate the quality of transportation. There have been changes in the transport competitive landscape in nations that have allowed the privatization of mass transit. Examples of changes in competitive landscapes of privately owned mass transport systems that captured my admiration would be the Japanese high-speed metro system, the Tokaido Shikansen which has been running for half a century with a record of zero derailments and zero collisions while maintaining a maximum delay of 18 seconds. Making transportation firms’ private has proven to be more efficient than state run transportation institutions due to a variety of reasons but mostly due to high investments from private firms and a concentration of funds. Companies like Tokaido Shikansen have affected the competitive landscape in a positive way by becoming market leaders and encouraging all other railway systems to attempt privatization or to emulate the private firms in hopes to compete with the quality and efficiency of private systems. A venture capital firms that come to mind when talking about transportation industries would be the mass advertising. Due to the fact that transportation firms attract many different clients in big numbers is a low risk investment for advertising companies or as stated before new technologies in transportation are often times implemented in mass transport in order to promote the effects ex: New catalytic converters on busses. Which has been subject to much success due to the fact that if a mass transport firm is using a certain product or is being endorsed by a certain venture capital firm means that the requirements on the quality of that product are stressed due to the liabilities faced thus making it more reliable.  

Which transportation company stands out regarding their view and action in CSR?

            Before talking about the outstanding industry, we should clearly be aware of what an ethic industry ought to be. Let me make it clear through the proper example about the 2011’s world most ethical company selection, whose designation is to recognize the companies that truly go beyond making statements about doing business “ethically” and apply them into action. We can tell that from the institute’s credo of “Good. Smart. Business. Profit.” Every year the list of the most ethically company changes a lot. For instance, there are 110 World’s Most Ethical Companies this year, of which 36 are new for 2011, while 26 companies in 2009’s list have dropped off from the list of 2011. It is because the process of selection is extremely strict. They believe that a ethical company should maintain the following factors.

http://ethisphere.com/past-wme-honorees/wme2010/

1. An ethical company should set up the sense of safety and security, especially the shipping companies like airlines.
2. They should be responsible for environmental issues such as air pollution, water pollution, excessive consumption of fuel and etc.
3. Governmental strict regulations and guidelines should not be ignored.
4. External management issues should be avoided. Such things involve the abuse of dominant position, attempts to monopolize, or anti-competitive mergers.

Moving to the practical case, UPS is indeed cited as an outstanding example. Based on the “Code of Business Conduct” of UPS, one on the list of 2011’s World Most Ethical Company, it surely could be deemed as an outstanding model in the transportation field.

First of all, from its code, we can tell the accuracy of records and reporting, for their records are maintained for required periods as defined in the UPS Records Retention Schedule and everyone inside the company is required to report certain concern to the company if they get any knowledge of an improperly of inaccurately prepared business record.

Additionally, the information of customers, employees, suppliers, and business partners are treated personally identifiable. UPS maintains the high-technical and physical safeguards designed to protect all the information. It regards the information security as their obligation. Besides, Ups promise to provide the equal opportunity and fair treatment to their employment. Accordingly, there is no discrimination in any aspect of age, race, religion, sex, disability, sexual orientation, gender identity and etc.

Moreover, the health, wellness, and safety of workplace are also guaranteed. Since employees are required to report any traffic accident, working injury, instance of non-compliance, or any situation presenting a danger of injury, people are willing to rate Ups as an ethical company to work in.

Moving to a deeper theme, Ups indeed exerts itself to avoid antitrust and fair competition. The employees in Ups are required to comply with the antitrust law and competition law. However, Ups dose not ignore the responsibility on the environment protection. Employees in Ups are all required to keep 7 rules about environment protections.

http://www.ups.com/content/corp/code_conduct.html

From my point of view, those are exactly why Ups is selected as one of 2011’s World Most Ethical Companies as well as the only one shipping industry in the list.

Blog Post #2 Questions #2 and 3

Ethics are in the forefront of the transportation industry.The issue that gets the most attention in today’s word is the impact that the transportation industry has on the enviornment. There is a major movement focused on using less oil and finding more ways to use clean energy that would reduce polution. Other ethical issues in the industry are transporting both illegal goods and people unknowingly, working their drivers and other employees for too long, and insuring drivers (specifically truck drivers) who are often uninsured. More specific to the airline industry, there are additional challenges and ethical questions that the industry faces. The airline industry also has to worry about concerns with employee to customer interactions, an increased amount of laws and safety regulations, and protecting traveling priviledges offered as a benefit for many of the employees. Very frequently on the news there are reports of customers being treated rudely by airline employees; an issues that is faced frequently by the airlines is: should obese individuals have to buy multiple seats or not? It is a very fair question, but it has become an issue that is being faced by many airline companies. Security and other safety regulations are usually dealt with by the TSA, but the companies still have to make sure that they maintain all of their safety measures and go above and beyond what is just simply required of them by the government. Regarding the abuse of flight priviledges, many airlines have special flight programs for their employees and families so that they are able to visit each other, but that can be abused and used for other purposes, such as business that other friends or family members were involved in. The airline industry also has a lot of personal information about people (both customers and employees). The information that they have (SS Number, credit card numbers, etc) is enough for an individual to have their identity completely stolen by someone else so protecting that information is very important to companies such as Continental Airlines. The transportation industry has many different ethical questions that it faces, while this list is not exclusive it does include some of the major examples.

Simpson, Shirley. “Ethical Issues in the Trucking Industry.”International Vision Collective.19 Feb. 2012.

“Continental’s Ethics and Compliance Guidelines. It’s how we do business.” Continential Airlines. 19 Feb. 2012. www.continental.com/web/en-US/…ethicsandcompliance_2007_02_12_01.pdf

Blog #2 Question #5 Mission Statements

        Mission statements are a must have for every businesses.  They provide consumers and other businesses a general sense of what the company they are looking at is all about. They announce the objective/objectives of an organization and their values.  The transportation industry is no exception to this need for mission statements.  Taking a look at the airline industry I will analyze the mission statements of United Airlines, Delta Air Lines, Southwest Airlines, and Jetblue Airlines, and how these major airlines hold up to their word.

 

United Airlines:

Mission
          Our mission is to develop, implement and communicate United’s commitment to community service by sponsoring and supporting charitable organizations, as well as programs and activities that improve the communities where our customers and employees live and work. 

http://www.united.com/page/article/0,,1367,00.html

                United is an innovative company in the industry in that since 1996 they have offered the Mileage Plus Charity Miles Program which is made possible through the dozens of partners that sponser it such as the American Red Cross, American Cancer Society, Rotary International, the Salvation Army, and more that donate over 1 billion miles to under privileged children and families as well as humanitarians and volunteers.   In addition to this program United has its own foundation, the United Airlines Foundation which provides money/aid to groups that request it.  Recently they have focused their giving to arts and culture programs, youth at risk, and volunteerism.  In sum, these two large charity projects live out the mission of United Airlines to support and sponsor customers and the community. 

          http://www.united.com/page/article/0,,1363,00.html

Delta Air Lines:

Mission

To continuously create value through an inclusive culture by leveraging partnerships and serving communities where we live and work.

http://www.delta.com/about_delta/community_involvement/delta_foundation/index.jsp

                Delta is certainly committed to improving their service for customers.  According to the StarTribune Delta moved up to 5^th place from 15^th last year in on-time flights out of 16 airline carriers.  In addition, Delta was noted for handling pets and luggage better this year than last year.  What’s more is that Fortune Magazine for the year of 2011 named Delta as the “Most admired airline in the world”.  So, Delta has proved itself as a strong airline in the industry offering improved and accommodating service to its customers. 

                http://www.startribune.com/business/139409738.html

               

 

Southwest Airlines

Mission:

The mission of Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit.

http://www.southwest.com/html/about-southwest/index.html

                For this year (2012) Southwest Airlines topped the list of the most desirable brands in the U.S.  putting Google in 2^nd place, Southwest Airlines is indisputably a customer-service orientated company.  Priding themselves in their mission statement for providing warmth, friendliness, and spirit Southwest certainly has earned its bragging rights.  What’s most interesting about the fact that Southwest topped the chart was that there were two lists separated by men and women, and Southwest came in first on both lists.  Thus, Southwest is doing a great job bringing customer service to get voted number one most desirable brand in America by both men and women.  In addition they received the 2011 Quest for Quality Award for Excellence by Logistics Management magazine.  They ranked first in on-time performance, value, and customer service.  Thus, they have proved that they are an airline that cares about its customers and not just pleasing them, but providing the optimum service. 

                http://www.marketwatch.com/story/us-men-women-agree-southwest-airlines-google-and-dove-are-most-desired-brands-in-2012-2012-02-17?reflink=MW_news_stmp

http://www.southwest.com/html/about-southwest/history/fact-sheet.html

 

Jet Blue Airways

Mission:

JetBlue Airways is dedicated to bringing humanity back to air travel. We strive to make every part of your experience as simple and as pleasant as possible. Unfortunately, there are times when things do not go as planned. If you’re inconvenienced as a result, we think it is important that you know exactly what you can expect from us. That’s why we created our Customer Bill of Rights. These Rights will always be subject to the highest level of safety and security for our customers and crewmembers.

http://www.jetblue.com/flying-on-jetblue/customer-protection/

                Jetblue along with Southwest has numerous accolades of its own.  For the past seven years, JD Power and Associated has awarded Jetblue with the highest honors in the airline industry for low-cost carriers in customer satisfaction.  Known to have accommodating policies, tv screens at each seat, and more roomy interiors Jetblue keeps its customers at the top of their priority.  To go into further detail Jetblue has the most legroom in coach, leather seats for all, DIRECTV, XM Satellite Radio, first checked bag free of charge, and unlimited complementary snacks and drinks.   In addition, their staff is known to be the friendliest in the industry.  With a down to Earth staff and a comfortable and entertaining flying experience Jetblue keeps its promise to bring back humanity to traveling.  In addition, strive for the highest customer satisfaction of any airline, and according to JD Power and Associates they have achieved this goal. 

                http://blog.jetblue.com/index.php/2011/06/08/jetblue-awarded-seventh-consecutive-customer-satisfaction-j-d-power-and-associates-honor/

Blog #1 Question #1 Landing the News in Transportation

Let’s face it the airline industry has its fair share of publicity.  In the past few years the two largest airline mergers in history have taken place.  Delta Airlines and Northwest Airlines have merged into Delta Air Lines and United Airlines and Continental Airlines have merged to form United Airlines.  United Airlines is now the largest airline carrier in terms of passenger traffic followed by Delta.  What’s interesting is that both United Airlines and Delta Airlines filed for Chapter 11 Bankruptcy prior to merging.  So what this teaches us is that companies while in their times of trouble can benefit tremendously from a new friend.

With all this background information, I’m going to segue into a relevant current event in the transportation industry.  We have all heard on the news for the past few months now that American Airlines filed for bankruptcy in November.  As one of the largest domestic airline carriers this comes as heavy news to the airline industry.  Now unfortunately with troubled economic times comes readjustments within that group.  Frequently the first area in businesses that receive cuts are in employment.  In an article by the Wall Street Journal in the Marketwatch published on February 1^st this year AMR Corp estimated 15,000 jobs would be cut to save approximately $2 billion.  The motive behind this devastating cut is the loss of $904 million at the end of last year.  15,000 pilots, flight attendants, and mechanics will most likely be unemployed in the next few months due to this extensive cut.  This is proof that the sensitive airlines industry has been deeply affected by the recession.  With unstable gas prices and tricky customer demand the airline industry is difficult to predict.  Therefore, numerous airlines have filed for Chapter 11 bankruptcy in recent years and are becoming desperate to find potential mergers to stay alive.  (http://www.marketwatch.com/story/amr-may-cut-up-to-15000-jobs-2012-02-01)

Keeping the current events in the sky, Spirit Airlines also made the news in a USA Today Article published yesterday.  Spirit Airlines interestingly is proud of their image is the poster child for airlines fees.  Another way airline companies have been increasing their revenue is by adding fees.  According to CEO of Spirit Ben Baldanza “We think about it as consumer empowerment” (Gilbertson).  The reason for their rather unusual excitement in this recognition is that instead of charging for the basics such as baggage fees, they offer fees on extras or amenities.  For example if you want to change your seat you can pay anywhere from $1 to $50 for a new seat.  So it’s not that their manipulating the customers on basic needs, but opening up a more lavish door of extras for customers that want a more comfortable experience.  (http://travel.usatoday.com/flights/story/2012-02-12/Spirit-Airlines-proud-to-be-poster-child-for-extra-fees/53062150/1)

This is what’s new in the transportation industry today.  Until next week, keep yourself grounded!

-Kimbo Bocchini