In America, shipping is synonymous with UPS or FedEx – depending on who you are. While the US Postal Service is larger by almost every measure, its package shipping program is no bigger than either of the major businesses. While I still love the never-say-die attitude of the USPS, most folks who have the option will choose a private carrier.
Interestingly, while the USPS has historically served as the last mile solution for UPS and FedEx, that may soon be changing. There are whisperings that the two private companies are going to take on more of those final deliveries, in an attempt to claw back some of that business.
Right now, the Postal Service is out delivering something close to a third of FedEx’s and UPS’s ground shipments. If those companies can find a way to bring those deliveries in-house, the numbers shown here could change drastically.
UPS and FedEx by the numbers
UPS is the longer running company, and it’s slightly bigger – if you consider over 11 million dail shipments and $10 billion in annual revenue slight. FedEx has a very large international shipping business, generating 24% of its revenue internationally, while UPS gets just 20% of its revenue from international shipping.
FedEx’s international business has been a real winner – see the TNT acquisition below. Even though the world economy has still be ticking along — or even falling apart, in some regions — FedEx has been able to shave costs and increase productivity around the world by employing new software and keeping airplane maintenance costs under control.
One of FedEx’s most interesting productivity moves is its new package sorting system, which can now bundle shipments with a common destination earlier on in the shipping process, cutting down on repeated work and deliveries and dropping last mile costs.
Of the challenges facing both businesses, fuel surcharges may be looming largest right now. This past year, UPS announced a 0.3% drop in per-piece revenue, impacted partially by the decrease in fuel surcharges, with FedEx having a similar experience.
FedEx acquires TNT Express
In 2016, FedEx finished its acquisition of TNT Express, a $4.8 billion deal. The Dutch company added around 30,000 vehicles and 56,000 employees to FedEx. While the company is a small player in terms of worldwide delivery – it ships just 1 million daily packages versus FedEx’s 11.5 million – TNT Express has a strong foothold in Europe.
FedEx also gets a last laugh, as EU regulators had rejected a UPS-TNT merger request back in 2013.
The TNT deal should continue to help FedEx grow, especially in the European market, over the next few years. Check back in 2018 to see if that all worked out as planned.
The final mile (of this post)
If you’re company is looking to increase its productivity, check out Capterra’s full logistics directory, which is full of packages designed to make your life easier. Also, check back in early November when the Capterra logistics blog takes a deeper dive into fuel surcharges, and how they’re affecting businesses large and small.
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