Competition Amongst Package Delivery Services Heat Up

FedEx, UPS & DHL Compete in Global Shipping and Logistics/ Begins to Fulfill its Own Shipping Needs

The parcel delivery business is one of the most competitive in the world, with a small handful of companies battling for market share. Within the U.S., FedEx’s and UPS’s dominance has been facing growing competition from regional carriers. Regional services can often ship packages faster than FedEx or UPS within their territory, with prices sometimes lower by 20% or more. Small ground carriers such as Eastern Connection Operating, Inc., LaserShip, Inc. and OnTrac are undercutting prices and offering a viable alternative for some instances of express delivery.

In the international market, competition among package delivery providers is even more fierce. Outside domestic borders, UPS and FedEx are confronted with a number of leading foreign companies, first and foremost being DHL Worldwide Express, which is owned by German company Deutsche Post AG.

Amongst this ongoing fray for shipping dominance, Amazon has entered the ring. Amazon is developing its own network to provide significant logistics services and perhaps handle more of its long-distance shipping in Amazon-owned or Amazon-leased equipment. The company already offers services called “Fulfillment by Amazon” that provides services such as warehousing, packing and shipment forwarding for merchants that sell products on the Amazon e-commerce platform. A related service called Dragon Boat expanded into a global delivery network to handle the supply chain of goods from Indian and Chinese factories through Amazon facilities to end-customers.

In 2018, the company launched its Amazon Shipping service. Initially, Amazon Shipping is serving third-party merchants that sell their wares through Amazon websites. By early 2019, Amazon Shipping service had expanded beyond its test markets in London and Los Angeles. Eventually, Amazon Shipping may be offered to a wide variety of shippers, such as merchants that participate in the Amazon Marketplace. If so, this ecommerce giant faces stiff competition from FedEx and UPS, which daily deliver 15 million and 21 million packages respectively. Amazon’s ability to innovate and its willingness to make bold investments in the past make its entry into the parcel delivery business a development worth watching.

For everything you need to know about the global Transportation, Supply Chain & Logistics sector, see:
Plunkett’s Transportation, Supply Chain & Logistics Industry Almanac 2020


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