Fedex Vs. Ups

        In today's' fast moving world delivery of packages, parcels, documents, goods in a timely and guaranteed manner is of absolute importance, the need for fast and reliable package delivery is growing. Two major companies come to mind when we have to ship anything of real importance: UPS and FedEx.  UPS is the world's largest package delivery company and a global leader in supply chain services, offering an extensive range of options for synchronizing the movement of goods, information and funds. Headquartered in Atlanta, Ga., UPS serves more than 200 countries and territories worldwide and operates the largest franchise shipping chain, The UPS Store. FedEx, which offers the same services as UPS, has grown up into a $29-billion network of companies, offering just the right mix of transportation, information, document management and supply chain solutions.

        Due to both companies being rivals in the same industry, they compete for not only customers but domination in certain services. Most importantly is the overnight package delivery industry. The competition is high due to the fifty billion dollar US market. Air Express segments hold about a 25 billion dollar market share in the US package delivery industry. The two companies currently compete for the 25 billion dollar domestic air express delivery segment. Both FedEx and UPS have a similar strategy in meeting the competition by having three different sections in their business: letters that weigh 0-2 pounds, packages that weight 2-70 pounds and heavier freight that weighs over 70 pounds. Their goal is to concentrate on keeping their customers happy so they try to customize solutions that can benefit each client.

When looking at Table 1 in the appendix, you see that FedEx and UPS have some differences in regards to their strategic approach. FedEx focuses on providing the best quality service to their customers through technological innovation so they are able to meet their customers’ needs on a timely manner. They have a “People-Service-Profit” that they take pride in because of how committed they are to their customers. UPS, on the other hand, focuses mainly on efficiency and cost reduction. They are regarded as an industry follower and have a reputation of being financially conservative.

        Some enabling factors that both UPS and FedEx face are globalization and the need for expansion into international markets. FedEx and UPS are competing for the biggest global presence. UPS has the slight upper hand with 60 years of experience in the industry which strengthened the brand name. This in turn allowed UPS to expand into China, Latin America, Europe and Canada. FedEx, which has the largest presence in China and was the first US Company to serve in that market, continues to use new technologies to give their customers certainty of their tracking and on-time delivery. For example, FedEx was an innovator in the hub and spoke strategy. They were also the first to purchase air planes while being a fairly newer company. By depending on other commercial airlines, FedEx completely control their delivery times.