FedEx and UPS Face Growing Competition

The parcel delivery business is one of the most competitive in the world, with a small handful of companies battling for market share. 

FedEx’s and UPS’s dominance has been facing growing competition from regional carriers. By working together to build delivery networks, small ground carriers such as Eastern Connection Operating, Inc.; LaserShip, Inc.; and OnTrac began undercutting prices and offering a viable alternative for some instances of express delivery. By late 2013, Amazon, Avon and Walgreens were utilizing these services to some extent. Regional services often can ship packages within a region faster than FedEx or UPS, with prices generally lower by 20% or more.

Both FedEx and UPS posted significant growth in fiscal 2014 as the U.S. economy began to strengthen. Both domestic and international shipments rose, with the greatest growth in e-commerce. At UPS, e-commerce accounted for about 45% of U.S. package deliveries, with business-to-business shipments rising (and showing greater profitability).

For 2014, FedEx reported revenue of $45.6 billion, up from $44.3 billion in 2013 and $42.7 billion in 2012. 2014 profits were $2.1 billion, up from $1.6 billion in 2013, which were down from $2.0 billion in 2012. In mid-2014, FedEx raised its shipping fees, taking into account each package’s size in addition to its weight.

For more data, statistics and pricing plans on the Transportation, Supply Chain & Logistics industry, see http://www.plunkettresearch.com/industries/transportation-supply-chain-logistics-industry-market-research/

Transportation 2015

Plunkett's Transportation, Supply Chain & Logistics Industry Almanac, 2015 Edition
691 Pages
ISBN: 978-1-62831-357-4
eBook ISBN: 978-1-62831-691-9
Online Edition Available
Publication Date: April 2015