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Executive Summery
The parcel service industry is made up of four main competitors. These competitors are
UPS, FedEx, Airborne Express, and the U.S. Postal Service. Since 2000, American
consumers have spent more than $50 billion to ship parcels, packages, and overnight
letters. New parcel distribution patterns developed due to the way U.S. manufacturing
companies are operating. The Internet has expanded the reach of direct marketing,
particularly with retail transactions requiring home delivery. Globalization has also
created the need for parcel carriers to expand worldwide.
UPS and FedEx are the leading parcel carriers in the U.S. FedEx has significantly
expanded their capability to compete with UPSs dominant ground delivery service. UPS
has continued its strong marketing efforts in overnight and deferred air services. Both of
these carriers have introduced information systems, which include user-friendly Internet
interfaces. The carriers have also expanded logistical services and improved integration
with customer supply chains.
State of the Environment
State of the General Environment
More and more people are using computers and the Internet. Dual income families have
increased spending; therefore more people are ordering products over the internet at a high
rate. The Internet offers customers a one stop source for global shipping. Due to this,
there has been an increase in using information technology and the Internet for
businesses. This has created an increase in trade and investment along with global
shipping logistics and supply chain solutions. With the increase in globalization,
companies have had to adapt to the diverse work force and the culture of the countries in
which they are conducting business. The parcel service industry is controlled by strict
regulations and federal law. For example, September 11 brought stricter laws and
regulations in the parcel service industry. Operations must maintain federal approval to
operate in the United States.
State of the Industry Environment
The parcel service industry is dominated by four carriers that make up 95 percent of the
industries domestic revenue. Over the years, the industry has had an increase growth rate
over time and an increased role in the economy. This is due to the way manufacturing
companies are now operating. With the growth of the parcel service industry, companies
were able to decrease their inventories. These companies were relying on just-in-time
inventory controls; they now had mass customization and the increasing demand for
logistical services. Manufactures also depended more on the customer, information
technology, and the increase in the use of technology in all parts of the economy.
