1
Filed by United Parcel Service, Inc.
Pursuant to Rule 425 under the Securities Act of
1933 and deemed filed pursuant to Rule 14a-12
of the Securities Exchange Act of 1934
Subject Company: Fritz Companies, Inc.
Commission File No.: 0-20548
BEGINNING ON APRIL 17, 2001, UPS MADE AVAILABLE THE FOLLOWING NEWSLETTER TO
CERTAIN PERSONNEL OF UPS AND FRITZ CONCERNING THE PROPOSED TRANSACTION WITH
FRITZ:
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THE GLOBAL EXCHANGE
UPS/FRITZ/UPSGFS INTEGRATION NEWSLETTER 2001, Issue 5
A MESSAGE FROM AL BENKI,
FRITZ SENIOR VICE PRESIDENT
LATIN AMERICA
When I joined Fritz Companies in 1994, I was convinced that we had an
opportunity to create and later to become a leading force in the integrated
logistics industry.
This vision was shared by the many entrepreneurs who joined us during our growth
period of the early 1990s and many of our customers who became our business
partners and participated in our well-known "Shippers' Councils." It was also
shared by our people in the field who built successful customer solutions
through creativity, resourcefulness, and agility.
Working on the UPS and Fritz integration in Latin America - together with UPS
Latin America Integration Manager Tom Pantazis, a UPS veteran of 33 years - I
once again sense a rekindling of this vision within our people in each of our
units in this region. This feeling is ignited by the opportunities that are
apparent as we learn more about each other in this area.
In certain respects, the combination of UPS and Fritz strengths in our region is
more complementary than in other parts of the world. Here are some examples:
- Fritz has offices in all but five of the major countries of
Latin America (which includes Central and South America,
Mexico, and the Caribbean). UPSGFS and UPS Full Service
Brokerage have offices in Miami and Puerto Rico.
- UPS/Challenge Air Cargo is building an impressive service
network throughout the region. Its business mix requires major
support from the forwarding community, and Fritz will be able
to play a major role.
- Fritz has a strong Customs Brokerage presence in the region.
This should integrate well with the requirements of the core
UPS business.
- We have an opportunity to deliver the most complete package of
service solutions in the region by blending our product
offerings with those of other UPS entities, including but not
limited to UPS Capital/Trade Financing, Service Parts
Logistics, e-Ventures and others.
- Many of the Fritz managers and field leaders are entrepreneurs
by nature. Their counterparts at UPS have a strong orientation
toward and experience in process management. Both will be
essential as we pursue a growth strategy in a more disciplined
environment.
During the integration planning over the past few months, our respective
organizations have been positively motivated by their interaction with each
other.
Almost without exception, UPS integration team members and executives began
their careers at the operational level. All have carried forward into their UPS
careers a keen recognition of the value their early UPS experience has meant to
their success and to the success of UPS. Integration team members, at all
levels, demonstrate a clear understanding that their roles and their
corresponding objective is the success of the integration.
(continued on page 3)
GROWING LATIN AMERICA
From the editor's desk
Keeping with the newsletter's global theme, this issue of The GlobalExchange
will feature Latin America and the extensive networks both Fritz and UPS have
built in the region over the years.
This issue provides an overview of both UPS and Fritz operations in Latin
America and how the two networks should complement each other to serve this
thriving market once the two organizations merge.
In 1999, to help UPS serve this important market, the company acquired Challenge
Air Cargo -- the leading air cargo company serving Latin America. (See article
on Challenge Air on page 3.)
This issue also contains a new feature, "Newsstand." This new section will be an
on-going section designed to provide press releases and news about our
industries and any important events that will have an impact on our businesses.
I'd also like to take this opportunity to thank each of you who participated in
the Integration Assessment survey. Over 7,000 of you participated.
From your responses and comments the integration team will be able to identify
issues and trends relating to your work environment, the merger, and the
demographics of the workforces.
Survey results are currently being tallied and results will be known in the
weeks ahead. Results will be communicated in upcoming issues of The
GlobalExchange and individual work group follow-up sessions.
Mark Soutter
Editor
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A GLOBAL POSITION
UPS's role in enabling global commerce has allowed it to reach more than
worldwide, and the new century indicates continued international growth. This
article gives an update on current conditions in the Americas Region.
UPS has been active in the Latin American package delivery market since 1985,
when it began service in Puerto Rico. The Americas Region was officially formed
in 1989, and today UPS manages five additional "brown" operations in the region
- Argentina, Brazil, Chile, Mexico, and the Virgin Islands. Combined with
partnerships with local courier and air delivery companies, UPS provides service
to more than 50 Latin American countries and territories.
VITAL SIGNS
The Americas Region comprises countries and territories in Latin America and the
Caribbean.
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Established in the Americas: 1989
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Headquarters: MIAMI, FL
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Volume increase 2000 compared to 1999:
NEARLY 10 PERCENT
(Led by Brazil with a more than 55 PERCENT
volume increase in 2000 compared to 1999)
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Points of Access: 126 (OPERATING CENTERS AND CUSTOMER COUNTERS)
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Employees: MORE THAN 4,000
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Customers: MORE THAN 24,000
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Delivery fleet: MORE THAN 1,000 VEHICLES
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Daily flights Intra Latin America: 199
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FREQUENTLY SHIPPED GOODS TO AND FROM LATIN AMERICA:
-- AUTO PARTS
-- DOCUMENTS
-- ELECTRONICS
-- LEATHER
-- PHARMACEUTICALS
-- SHOES
-- TEXTILES
IMPORT INFLUENCE
Moving in recent years from an agrarian to an industrialized society, Latin
America's economy has become mostly import driven, and the region's package
import market is estimated at $1.7 billion. Shipments from the United States
account for a large percentage of import volume into Mexico and Puerto Rico,
making the United States Latin America's largest trading partner. Import volume
is more global in Argentina, Brazil, Chile, Colombia, Panama, and Venezuela,
with goods from Asia, Europe, and NAFTA countries (United States, Mexico, and
Canada) accounting for the majority of imports. Intra-region trade is still
strong and is becoming a more significant influence.
THE "SILICON VALLEY" OF CENTRAL AMERICA
Costa Rica serves as a technology corridor for many companies, earning a label
as the "Silicon Valley" of Central America, and creating a greater demand for
door-to-door express delivery service. UPS's roundtrip flights from Miami
primarily serve high-tech companies with operations in Costa Rica.
COMPETITIVE MARKETPLACE
UPS is not the only carrier trying to increase its opportunities in Latin
America. To gain market share and build brand awareness, UPS must increase its
visibility in key markets, provide excellent service, and work to deliver more
international packages.
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A MESSAGE FROM AL BENKI (CONTINUED FROM PAGE 1)
During our recent orientation trip to Argentina, Brazil, and Venezuela, UPS
Business Unit Manager David Abney, UPS Integration Finance Manager John
Hafferty, and UPS Latin America Integration Manager Tom Pantazis all directed
special attention toward addressing the concerns of our people, at all levels.
Their efforts during this especially grueling trip (four cities in five days)
sent a clear signal of the importance they place on the value and contribution
of each individual in achieving a successful integration.
The Fritz structure in the region was developed through more than a dozen
business acquisitions, which brought unique skills and capabilities to our
Global network. These entrepreneurs, who are still with us, continue to
demonstrate their in-depth knowledge of the local market and their continued
desire to make our organization the recognized leader in their respective
countries.
As we continue to work on the integration, it is clear that the vision to create
and become a leading force is once again alive in our region. We know that our
success will depend on the effective integration of our respective cultures, a
clear and specific market direction, and the ability to develop and execute
solutions utilizing the full product portfolio of the combination.
Together with all of our people in the region, I look forward to the challenge.
Al Benki
ACQUISITION OF CHALLENGE AIR CARGO HELPS UPS REACH LATIN AMERICA
Both Fritz and UPS realized the tremendous business opportunities that lie in
Latin America. Due to the region's diverse countries and people, Latin America
provides a rich offering of both import and export goods, from the smallest
package to the largest ocean or air container.
In 1999, after a long-standing working relationship UPS acquired Challenge Air
Cargo, the leading air freight carrier to and from Latin America. Formed in
1978, Challenge Air Cargo is the largest all-cargo airline serving Latin
America.
Challenge Air Cargo holds aviation operating rights to virtually every country
in Latin America. It currently is operating about 120 flights a week to 16
cities in 13 countries.
Latin America is primarily an air cargo market and the best way to set the stage
for express package growth is by serving the cargo market. That's why this
acquisition is so important strategically.
ABOUT CHALLENGE AIR CARGO
Challenge offers direct all-cargo service to and from Central and South America
via its Miami hub. Additionally, Challenge offers air service connections
throughout the United States, Canada, Europe, and Asia.
Challenge operates a fleet of 3 DC-10-40 freighters and two Boeing 757-200F's.
Currently, Challenge offers more than 60 scheduled flights a week to Latin
America. Destinations include: Brazil, Bolivia, Colombia, Costa Rica, Ecuador,
El Salvador, Guatemala, Honduras, Panama, Peru, Venezuela, Nicaragua and the
Dominican Republic. Additionally, Challenge Air Cargo offers charter services
upon request.
Challenge was the first all cargo airline ever to be awarded the President's "E"
Certificate for "Excellence in Exporting," by the U.S. Department of Commerce.
HEADQUARTERS AND FACILITIES
Challenge Air Cargo employs approximately 1,200 persons, including 700 in the
United States and 500 in international locations.
In October 1996, the airline inaugurated its state-of-the-art 165,000-sq.-ft.
Air Cargo Center at Miami International Airport, which includes a 26,000-sq. ft.
cooler for perishable shipments. The facility also offers bar coding of
shipments, which allows for instantaneous tracking of cargo.
IT ALL STARTED WITH FLOWERS
Back in 1978, when the volume of flower exports from South America was growing,
Challenge Air Cargo was formed. Challenge's Founder and President, B.F. (Bill)
Spohrer, was convinced that success awaited a modern, all-cargo airline that
could bring high levels of service to the U.S.-Latin American market.
Challenge began operation between Miami and several points in Central and South
America on a charter basis. Later, as trade increased, Challenge developed into
a full-fledged scheduled cargo airline.
In the early `80s, the older aircraft were replaced with DC-8-63F and Boeing
707-300C freighters, allowing the airline greater capacities of 18 and 13
pallets, respectively. By 1988, Challenge's annual volume of air cargo exceeded
100 million pounds. Challenge entered the `90s as one of the largest U.S.
all-cargo scheduled airlines.
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"OUR COMPANY"
HOW ARE WE DOING?
At the beginning of each year, UPS Chairman Jim Kelly delivers his vision and
the direction for the following year through "Our Company," a video message for
UPS employees worldwide. For 2001, Jim presented his message in conjunction with
Vice Chairman Mike Eskew in a two-part video.
Jim spoke about UPS's transformation from a small-package delivery
company to a company that enables global commerce across the entire supply
chain.
To complement Jim's vision, Mike explained that UPS created the UPS
Logistics Group, UPS Capital, and e-Ventures subsidiaries to fulfill UPS's new
role in the world economy.
At right, read how UPS is fulfilling customers' needs all along the
supply chain and, therefore, the "Our Company" vision.
2001: PROGRESS REPORT
So far this year, UPS has realized several achievements that will help the
company meet new challenges in enabling global commerce.
FORTUNE
In February, Fortune magazine named UPS "America's Most Admired Mail, Package,
and Freight Delivery Company" for the 18th year in a row.
FIRST INTERNATIONAL BANCORP
UPS's proposed acquisition of First International Bancorp is expected to expand
UPS Capital's lending capabilities to small and medium-sized manufacturers,
distributors, and wholesalers.
FRITZ
UPS's agreement to acquire Fritz Companies, Inc., is expected to join the global
freight forwarding, customs brokerage, and logistics services of Fritz with UPS.
MAIL BOXES ETC.
UPS has agreed to acquire assets of Mail Boxes Etc. to develop new opportunities
in small business services, e-commerce, and financial services. This transaction
also should strengthen UPS's physical link to Internet customers and small
office/home office owners.
CHINA RIGHTS
By winning rights to fly directly into China from the United States, UPS is now
able to offer improved transit times and efficiency for customers doing
international business in and out of China. The award offers UPS the opportunity
to grow business and create additional jobs.
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NEWSSTAND
UPS CELEBRATES INAUGURAL FLIGHT TO PEOPLE'S REPUBLIC OF CHINA
UPS kicked off its direct-to-China air service with a special event at the UPS
Ontario International Air Hub in California. The invitation featured traditional
Chinese calligraphy hand-lettered by Chinese-American artist Godwin Kou. It
translated, "United Parcel China Express Service." At the event, UPS hosted
employees, customers, members of the Chinese-American community, and political
representatives who supported UPS's application to the Department of
Transportation.
HOME DEPOT CHOOSES UPS AS SHIPPER
The Home Depot, the world's largest home improvement retailer, is enhancing its
on-line sales program with a catalog of products offered throughout Washington,
Oregon, Idaho, Montana, and Arizona and shipped to customers via UPS.
"This is another step in our long-term strategy to fully integrate the
on-line and off-line shopping experience for our customers," says Ron Griffin,
Home Depot's Chief Information Officer.
The approximately 20,000 products offered in the five states are
"neighborhood friendly" to the region and conducive for shipping via UPS. The
products can be viewed by customers in these states on the Home Depot Web site
at www.homedepot.com.
FRITZ COMPANIES IMPLEMENT VALUTECH'S DISBURSEMENT SOLUTION
Fritz has implemented Valutech's ValuPay(C) disbursement solution to centrally
control check production with more than 100 sites to be rolled out throughout
North America this year.
ValuPay(C) is integrated with Fritz's CODA Financials ERP system to
process all types of payments, including freight and tariff charges needed with
short notice at remote sites. The ValuPay(C) and CODA integration seamlessly
consolidates payment processes and general accounting. Fritz is looking to
expand ValuPay's corporate presence to being a worldwide distributed payment
system.
ValuPay(C) will allow the origination of the disbursement centrally
and/or remotely, with check production at the desired site. The check will be
ready on the spot (together with needed forms) where the funds are needed to
clear the freight or tariff charges.
UPS TO ACQUIRE MAIL BOXES ETC.
UPS has agreed to acquire the assets of Mail Boxes Etc (MBE) -- the world's
largest franchisor of independently owned and operated business, communication,
and shipping centers. The transaction will allow UPS and MBE to develop new
opportunities in small business services, e-commerce, and financial services.
The acquisition should also strengthen UPS's physical link to a growing segment
of Internet consumers, small office/home office owners, and an increasingly
mobile, technology-driven society.
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THANKS FOR HELPING TO MAKE OUR PLACE A TERRIFIC PLACE
TO WORK
YOUR OPINION COUNTED
OVER 7,000 FRITZ AND UPSGFS EMPLOYEES PARTICIPATED
IN THE INTEGRATION ASSESSMENT SURVEY
SURVEY RESPONSES ARE BEING TABULATED AND RESULTS
WILL BE PRESENTED IN MAY
Except for historical information contained herein, the statements made in this
document constitute forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. Forward-looking statements include statements regarding the intent, belief
or current expectations of UPS and its management regarding the company's
strategic directions, prospects and future results, as well as statements
relating to regulatory approvals required in connection with the proposed
transactions detailed herein, the prospects and financial condition of the
combined operations of UPS and Fritz, the ability of the parties to successfully
consummate the transaction and integrate the operations of the combined
enterprises and other statements relating to future events and financial
performance. Such forward-looking statements involve certain risks and
uncertainties. Important factors may cause actual results to differ materially
from those contained in forward-looking statements. These include the failure of
the proposed transaction to be completed for any reason, the competitive
environment in which UPS operates, economic and other conditions in the markets
in which UPS operates, strikes, work stoppages and slowdowns, governmental
regulation, increases in aviation and motor fuel prices, cyclical and seasonal
fluctuations in operating results and other risks discussed in filings that UPS
has made with the Securities and Exchange Commission, including its Annual
Report on Form 10-K for the fiscal year ended December 31, 2000, which
discussions are incorporated herein by reference.
UPS and Fritz have filed a joint proxy statement/prospectus and other relevant
documents concerning the merger with the United States Securities and Exchange
Commission. THESE DOCUMENTS CONTAIN IMPORTANT INFORMATION, AND WE URGE INVESTORS
TO READ THEM. Investors will be able to obtain the documents free of charge at
the SEC's website, www.sec.gov. PLEASE READ THE JOINT PROXY STATEMENT/PROSPECTUS
CAREFULLY BEFORE MAKING A DECISION CONCERNING THE MERGER.
In this document, Fritz Companies makes forward-looking statements that
are subject to risks and uncertainties. These forward-looking statements include
information about possible or assumed future results of our operations and the
Merger. Also, when we use any of the words "believes", "expects", "anticipates"
or similar expressions, we are making forward-looking statements. Many possible
events or factors could affect the future financial results and performance of
Fritz Companies and the Merger. Such possible events or factors could cause
results or performance to differ materially from those expressed in our
forward-looking statements and are set forth in Fritz Companies' filings with
the United States Securities and Exchange Commission (the "SEC"), which include,
without limitation, possible events or factors with respect to the Merger.
Fritz Companies and its directors and executive officers may be deemed
to be participants in the solicitation of proxies in respect of the proposed
merger. Information about such directors and executive officers, including
information about their ownership of Fritz Companies stock, can be found in the
Fritz Companies proxy statement, dated August 18, 2000, for its 2000 annual
meeting of stockholders.
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