Airborne Express
Executive Summary Revenues and profit are the most widely used measure of performance. Operations planning and marketing planning are one of the most important measures for the company to target profit of the actual line; it is also the effective step for communicating a company� goals and objective. The management team should be concentrated in sale s and cost strategic plans for achieving the goals of company. The case study of Airborne Express is an analysis of their financial results that compared to Federal Express (FedEx) and United Parcel Service of America (UPS). This case information was happened in 1997. For now the information and also strategic point of the firm may be changed but for the industry may still be the same. Introduction Airborne Express is the third largest and fastest growing international air express delivery carrier in America. It provides door-to-door express delivery at a savings of up to 20% over FedEx and UPS. The advantages of shipping via Airborne Express are: faster delivery, tracking capabilities, insurance, guaranteed delivery dates (not offered through the US Postal Service), and better rates (lower than similar services through FedEx and UPS). Airborne Express helps companies to keep costs down and to maintain competitive prices. It's no wonder that 2.5 million companies choose Airborne Express. More than 60% of the Fortune 500 depends on Airborne Express to speed their shipments and documents around the world.
Company Airborne Express is a reliable full-service transportation and logistics partner to business clients in the United States. Moreover, more than 200 countries around the world are provided with the integrated distribution solutions in the air and by sea. Celebrating over 50 years of service, Airborne is the third largest and fastest-growing air express delivery carrier in America. It delivers time-sensitive documents, letters, small packages and freight via same-day, next-day, next-afternoon, second-day and other service options. Airborne is the only carrier in the United States with a privately owned airport, complete with an aircraft maintenance operation and Foreign Trade Zone. And Airborne's industry leads when customers' solutions call for breakthroughs in the use of technology, automation and electric data interchange (EDI). Airborne Express is a billion dollar corporation and is listed on the New York Stock Exchange.
History of Airborne Express In 1940S, Airborne Flower Traffic Association of California is founded in San Francisco and Pacific Air Freight started in Seattle. In year 1968, Airborne Freight Corporation, changing its name from Airborne Flower in 1956, merges with Pacific Air Freight. In 1980S, Airborne buys Midwest and moves flight operations to Wilmington, Ohio;
company name becomes Airborne Express and Airborne's same-day, nationwide delivery service, Sky Courier, is launched. Large competitors will not offer similar services for six years. In 1990S, Airborne introduces ocean transportation to its international service package and it becomes the first U.S.-based air express carrier to serve Vietnam, after the U.S. trade embargo dissolves, with an online, real-time shipment tracking network. In addition, Airborne also establishes an alliance with the U.S. Postal Service and introduces a deferred delivery service that enables businesses to ship directly to consumers. In 2000S, Airborne launches its zone-based, 1-7 day delivery service. The new service makes Airborne more competitive in an increasingly important business segment. Airborne enters the retail marketplace by offering shipping services through new partners such as OfficeMax.
Operations Self Service Airborne Drop Boxes: Airborne's nationwide Drop Box network provides customers with thousands of convenient shipping points for letters and small packages (excluding hazardous materials shipments). Drop Boxes accept shipments for either U.S. or international express service and contain free packaging and shipping supplies. Pickups at Drop Boxes are made daily, Monday through Friday, at specific posted times. Drop off Facilities Airborne Facilities (and agent locations): Airborne operates hundreds of strategically located facilities throughout the United States. Service is available Monday through Saturday (hours vary by location with reduced hours on Saturday). These facilities are staffed with personnel to assist with your needs for expedited delivery of domestic or international shipments, regardless of size (including hazardous materials). Free Airborne packaging and shipping supplies are also available. Authorized Airborne Drop Off Facilities: The Authorized Drop off Facilities are independently operated. Service is available Monday through Friday, specific hours vary by location. These locations accept Airborne shipments (hazardous materials excluded) and may have staff on hand to assist with your shipment needs. International Operations Airborne is working diligently so its valued customers can be provided with Airborne's normal high standards of service. Airborne is making every effort to expedite shipments when possible and deliveries are being made in areas where the crisis has not precluded such activity. Airborne's international operations are still continuing but with some delays. There are no trans-border operations between the U.S., Canada and Mexico occurring at present. Flights to and from the U.S. have been suspended temporarily as part of the FAA mandate, but intra-regional operations in Europe, Asia and other parts of the world continue to operate.
Technology of Airborne Express
Using of Aircraft: Airborne Express began in the 1970s as Airborne Freight Corp, flying small aircraft like the Lear Jet, Beech 18 and Aerostar. In 1978 Airborne introduced a small fleet of five Caravelle six jets and took over Midwest Air Charter, who flew courier flights for the Banks. Airborne Express was FAA certified in 1980 and introduced the turboprop NAMC YS-11 twin alongside the Caravelles for freight flights from its base at Wilmington. In the early 1980s the Caravelles were retired in favor of Douglas DC9s as the freight business widened to flights across the USA. By 1984 the longer routes meant that the air company needed a long-haul freighter so it purchased Douglas DC8-61Fs. DC8-63Fs and the shorter DC8-62Fs were also used. By the 1990s the DC8 jets were starting to age and become expensive to fly so the airline looked around for a modern replacement and after considering the Airbus A300 it chose the Boeing 767-200 Freighter variant, which entered service from 1997. The airline is planning to introduce further used Douglas DC9 jets. Using ExpediteShip for Airborne ActiveX Control: ExpediteShip is an Airborne Express certified development tool for custom shipping solutions. As an ActiveX Control it can be easily integrated into your intranet or desktop systems cutting down development costs and time. Users can print Airborne shipping labels to any U.S. domestic destination; schedule or void courier pickups; select the shipment type, service, weight, dimensions, bill method, COD, special service, and more. The request is then send to the Airborne Express servers. The response returned contains the shipping label to be printed, air bill number, service level commitment, ship date, service day, origin station, route code, total charge estimate, freight value, and other value of the shipping. Using Microsoft .NET and building on the smart client capabilities of Microsoft Office: Airborne developed an add-in to Microsoft Office� specifically, to the Microsoft Outlook messaging and collaboration client� that lets customers identify the packages that they want to track and whose status they want delivered directly to their desktops. Called Airborne Tracking Tasks, the new solution was created with only 500 hours of developer effort� two people working part-time for 10 weeks. Taking advantage of the rich feature set and open architecture of Outlook enabled Airborne to deliver a solution that provides all the benefits of a smart client application: a rich user interface, features that leverage the processing power of the desktop, integration with applications running on other systems through XML Web services, and an ability for users to access and act on information when not connected to the Internet. Customers create a Tracking Task as they would any other Outlook task, using the same familiar user interface. After one or more Tracking Tasks are created, the Outlook add-in does all the work. It uses a Web service to retrieve real-time package status updates from Airborne� data center s over the Internet, and then populates Tracking Task status properties with the information that is returned. Cost Strategic Planning Although Airborne� smart client solution is free, the company� Web service s s interface into its host system can easily be reused to create new services for which a fee can be charged. This capability will become even more important as Airborne expands its service offerings for small and medium-sized businesses. Airborne� new solution also s will increase revenues by making it easier for people to do business with the company and by creating a � stickiness� on user desktops after people have installed the add-in.
Providing an intuitive, easy-to-use tool for proactively tracking packages will make customers less likely to call Airborne� service center to check on the status of a s delivery. This will help Airborne to lower its call center costs� at least limit those costs or as its business grows. Airborne� call center receives 3 million calls per month, with s each transaction costing 20 times as much as it does to process through our Web site. Therefore, if Airborne call volumes decrease by only 2 percent, company will save close to $1 million per year in call center costs. Airborne� new .NET-connected s solution increases productivity for the company� customers by enabling them to track s their packages with less effort. Users no longer need to call the Airborne service center or go to Airborne.com to track a package� actions that may need to be performed several times a day if continual status updates are required. Future Plans of Airborne Express Company provides a comprehensive set of transportation and logistics services offerings to global customer base, with particular emphasis on express and time-definite delivery, freight forwarding and third party logistics (3PL) services. Senior Director, Logistics Services � Responsible for overall sales, operational and financial performance of third party logistics subsidiary - Airborne Logistics Services (ALS) � Attained annual revenues of $110 million-plus on operating budget of $20 million. � Achieved highest revenue and profitability growth rates of all business units within Company by successfully positioning ALS as leading 3PL provider in its segment. � Other responsibilities: � Personnel management (headcount 400) - Sales management duties � Strategic planning - New product/service development � Annual business plan development & execution - Real estate development.
The current situation of Airborne Express March 25, 2003, Airborne, Inc. (NYSE: ABF) and DHL announced that they have entered into a definitive merger agreement that will create a stronger third competitor in the U.S. express delivery market and bring the benefits of intensified competition and enhanced service to millions of small- and medium-sized businesses that purchase expedited door-to-door delivery of small packages and documents. Under the terms of the agreement, DHL will acquire Airborne's ground operations for $21.25 per share in cash, or a total equity value of approximately $1.05 billion. Upon conclusion of the acquisition, Airborne's air operations will be separated from its ground operations and will become an independent public company, called ABX Air, Inc. ("ABX Air"). ABX Air will be wholly owned by Airborne's current shareholders, who will each receive one share of ABX Air for every Airborne share they hold. The UPS/FedEx duopoly has a 79% share of the U.S. express delivery market, and the combination of DHL and Airborne will enable us to create a much stronger competitor, which will benefit a broader range of express delivery customers. In the markets we compete in today, made up primarily of large, corporate accounts, Airborne's price levels are substantially lower than our competitors. The
expanded DHL business will have the capital and resources to leverage this value into the small to mid-sized marketplace. This combination will strengthen DHL's presence in the U.S., and our global presence will bring significant benefits to Airborne customers. The U.S. ground operations of Airborne and DHL will operate under the DHL brand. The combination of Airborne and DHL will result in increased opportunity for employees of both companies because the combined U.S. operations will be able to compete more effectively and pursue a more aggressive growth strategy. The transaction, which is subject to shareholder and regulatory approvals, is expected to be completed during the summer of 2003. ABX Air will have its own Board of Directors, management, independent auditor and SEC financial reporting requirements. The Chief Executive Officer will be Joe Hete, who is currently the senior operating executive of Airborne's airline operations. To ensure ABX Air continues to meet U.S. citizenship requirements, its certificate of incorporation will include standard mechanisms to prevent foreign entities from gaining a control position, including share ownership limits and foreign owner share registry. On completion of the transaction, ABX Air and DHL will enter into arms-length commercial agreements that will govern their relationship, including an aircraft, crew, maintenance and insurance (ACMI) agreement under which the new airline company will provide air service to DHL's ground business. It will also provide these services to third parties. Goldman, Sachs & Co. is serving as financial advisor to Airborne and O'Melveny & Myers is serving as legal advisor. Deutsche Bank is serving as financial advisor to DHL and Simpson Thacher & Bartlett is serving as legal advisor.
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