Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Freightways positive on mail as NZ Post shrinks

Freightways’ Bracewell remains positive on mail as NZ Post fires posties

By Suze Metherell

Feb. 25 (BusinessDesk) – Freightways managing director Dean Bracewell says he is upbeat about the prospects for his mail operations, seeing growth in niches such as overnight deliveries to businesses in a market where dominant player New Zealand Post is downsizing.

The company’s DX Mail unit, acquired in 1985, is the only nationwide business mail competitor for NZ Post, which plans to sack 2,000 workers over the next three years and shift to alternate-day mail deliveries in response to falling demand. DX Mail sits alongside Freightways’ Dataprint unit, a mailhouse that handles both physical and digital deliveries.

“We’re actually positive about our mail business,” Dean Bracewell, managing director of Freightways told BusinessDesk. “We see plenty of opportunity within the mail market, hence we’ve invested in street delivery networks, or posties on the street if you like, in many locations throughout New Zealand and are getting good growth in those areas.”

Freightways doesn’t split out results for DX Mail, which is a minor part of the express package and business mail division that lifted sales by 7 percent to $168 million in the first half. DX Mail grew revenue in the period, though its overall performance was down on a year earlier, as it shifts its focus from business box-to-box delivery to street delivery mail, Bracewell says.

“We see DX Mail being a growth opportunity for the company,” he said.

Targeting niches within mail delivery may give Freightways the opportunity to squeeze profit out of a market in which NZ Post is struggling to maintain a full postal delivery service. The state-owned company is trialing reduced deliveries in the next six months and is shrinking its network of 880 outlets, having relied on cost cutting to boost earnings in its first half.

NZ Post’s strategy includes making growth in parcels and logistics its top priority, as it retreats from a mail market it estimates has had a 30 percent decline in letter volumes since 2006. Freightways said in last year’s annual report that it expects to see customers “talk to DX Mail about its alternative services.”

Shares of Freightways gained 2 percent to $4.80 on the NZX, adding to a 2.8 percent gain yesterday, when the company reported a 3 percent increase in first-half profit. The stock is up 8.4 percent in the past 12 months, about half the gains of the NZX 50 Index.

Analysts say they want more evidence that there’s growth in mail.

“It is a good strategy. Whether it will pay off or not, time will tell,” said Dennis Lee, an analyst at Craigs Investment Partners. “When one pulls back, there is a gap in the market and if you can do it cheaper, if the environment is right, why not take the market?”

Freightways acquired DX Mail, then known as Legal Couriers in 1985, expanding it to a nationwide business-to-business mail system and a mail digitising service. It operates alongside Freightways’ stable of courier service brands.

“Door to door delivery in the city is very competitive but their major strength is from their national network and that puts them in a strong position," Craigs’ Lee says.

(BusinessDesk)


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

BusinessDesk: APN's NZME Sees Future In Paywalls, Growth In Digital Sales

APN News & Media has touted a single newsroom concept for its NZME unit in New Zealand, similar to what Germany's Die Welt uses, saying an 'integrated sales proposition' is helping it win market share, including ... More>>

Labour Party: Global Milk Prices Now Lowest In 6 Years

The latest fall in the global dairy price has brought it to the lowest level in six years and shows there must be meaningful action in tomorrow’s Budget to diversify the economy, says Labour’s Finance spokesperson Grant Robertson. “Dairy prices ... More>>

BusinessDesk: NZ Inflation Expectations Creep Higher In June Survey

May 19 (BusinessDesk) - New Zealand businesses lifted their expectations for inflation over the next two years, sapping any immediate pressure on the Reserve Bank to cut interest rates, and prompting the kiwi dollar to jump higher. More>>

BusinessDesk: Lower Fuel Costs Drive Down NZ Producer Input, Output Prices

May 19 - Producer input and output prices fell in the first quarter, mainly reflecting lower fuel costs and weakness in prices of meat and dairy products. More>>

Media: Fairfax Media NZ Announces Senior Editorial Team

Fairfax Media New Zealand has today confirmed its new editorial leadership team, as part of a transformation of its newsrooms aimed at enhancing local and national journalism across digital and print. More>>

Science: Flavonoids Reduce Cold And Cough Risk

Flavonoids reduce cold and cough risk Research from the University of Auckland shows eating flavonoids – found in green tea, apples, blueberries, cocoa, red wine and onions – can significantly reduce the risk of catching colds and coughs. The research, ... More>>


BusinessDesk: RBNZ House Alert Speech The Catalyst For Government Action

Prime Minister John Key all but conceded that pressure from the Reserve Bank of New Zealand for concerted action on rampant Auckland house prices was one of the main catalysts for the government's weekend announcements about tightly ... More>>

BusinessDesk: How To Fall Foul Of The New Housing Tax Rules: Tips From IRD

Just because you rented out your investment property doesn't absolve you from paying tax, says the Inland Revenue Department in a summary of commonly made mistakes by non-professional property investors when it comes to their tax liability.More>>

Legal: Superdiversity Law, Policy And Business Stocktake Announced

Mai Chen, Managing Partner at Chen Palmer New Zealand Public and Employment Law Specialists and Adjunct Professor of Law at the University of Auckland, today announced the establishment ... More>>

Housing: More House Price Gains Expected

House price expectations remain high, with a net 56% of respondents expecting house prices will increase. Fears of higher interest rates are fading, consistent with the RBNZ’s signals this year. Affordability and a lack of houses for ... More>>

TDDA: State-Of-The-Art Drug Testing Laboratory To Open In Auckland

World leading drug testing agencies, The Drug Detection Agency (TDDA) and Omega Laboratories, open New Zealand laboratory More>>

Network: Bigpipe Launches Ultra-Fast Broadband Into Wellington

Bigpipe Launches Ultra-Fast Broadband into Wellington Naked broadband provider Bigpipe has extended its national reach, announcing today, the launch of its unlimited UFB offering into Wellington. The Spark Venture business is giving Wellingtonians the ... More>>

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news