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�s goals and objective. The management team should be concentrated in sale
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�s data center over the Internet, and then populates Tracking Task status
properties with the information that is returned.
Cost Strategic Planning
Although Airborne�s smart client solution is free, the company�s Web service
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�s new solution also
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�s service center to check on the status of a
delivery. This will help Airborne to lower its call center costs�or at least limit those
costs as its business grows. Airborne�s call center receives 3 million calls per month,
with 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�s new .NET-connected
solution increases productivity for the company�s customers by enabling them to track
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.

References

1. http://msdn.microsoft.com/netframework/
2. http://www.diversityleaders.net/Corp_Profiles.asp
3. http://www.findarticles.com/cf_dls/m4PRN/2001_Sept_13/78235717/p1/article.j
html
4. http://www.abxair.com/history-full.html
5. http://www.poncacity.com/ponca/information/airborne.htm
6. http://www.dhl-usa.com