How the Battle Between FedEx and UPS Affects Your Business

by Luke Kupersmith on 2012-08-07 03:25:02

Whether you are a business that frequently ships parcels all across the country or an individual shipping package, you are most likely to be using one of two major shipping forces— UPS or FedEx. 

Both have controlled and been part of a long-standing oligarchy in the small parcel delivery services industry with few competitors in their way.  For businesses, this oligarchy setup has meant only two choices to ship their wares to customers, along with increased rate hikes and penalties at the whims of these carriers.  However, this past year we have seen companies become much more aggressive with new acquisitions and possible defections.  Here, we’ll review the most recent news thus far and the possible implications on your business and shipping:

UPS has been having a fairly positive year thus far.  Overall, they had a slightly larger gross year-over-year (currently at 5.3%) and a high dividend yield of 2.8.  Not only has UPS been profiting well this year from general shipments, but they finally completed their acquisition of a major shipping force—TNT Express— to boost their international shipping with more than 30,000 trucks and planes in over 200 countries— a healthy competitive boost that will continue to boost their international output.



FedEx, on the other hand, is having a bit more of a difficult year comparatively.  Their year-over-year gross is at 5.2%, close to UPS’s percentage, but the rest of their metrics are far off from their main competitor.  Their dividend, for instance, is only at 0.6.  Even worse, one of their biggest partners, the USPS, has announced that it will seek actual bids rather than a usual renewal, which could potentially result in a loss of aircraft and assistance in overnight shipping and other types of shipping that was once easy and affordable to the team. These developments mean that businesses need to be wary of any slight changes and acquisitions, or losses, from either company that could highly impact future rate hikes or shipping restrictions.

Our experienced staff’s continuous research and knowledge allow them to give Source Consulting customers and partners the best analytic information and ways to proceed in saving money from shipping costs.  More UPS and FedEx news is expected to happen over the course of the next few months as we head into 2013.  Stay updated on the latest developments and connected with Source Consulting on Facebook and Twitter for all the latest news and tips on how your business can stay on top.

By Luke Kupersmith
Source Consulting, www.sourceconsulting.com