Airbborne Express Case

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How and why has the express mail industry structure evolved in recent years? How have the changes affected small competitors? Business and individual spent $16-17 million on expedited shipments within the United States in 1996. Industry observers expected volumes to grow at roughly a 10% annual clip for next five to ten years.The domestic express mail market companies delivered a staggering number of packages. Collectively, the three largest companies – Federal Express, UPS and airborne Express- routed more than 5 million packages each day. And are held 85% of the market, Over 98% arrived on time. The six second-tier players-BAX Global, DHL worldwide Express, Emery worldwide, Roadway Package System (RPS), TNT Express Worldwide and the US Postal Services. Each of these companies took a varied approach to which market they exercised their transport and capabilities in .For example, The US postal Services served much of the rest of the market. The convenience of the post office made the postal service popular. However, offering discounts to customers was prohibited by low. Moreover, it could not track package efficiently and had an on-time delivery record much worse than commercial carries. Competitors claimed that the postal service maintained high prices for first class letters where it had legal monopoly, and subsidized products such as express mail, where it had rivals. DHL and TNT focused on the international market. TNT focused its efforts on Europe, 80% of DHLs shipments crossed an international border, and 40% of all trans-border express shipments. DHL, however, had never invested heavily in domestic shipping within the US capabilities; the main reason that TNT and operated in the United States was to lower operating costs and increases the dependability of their international services. On the other hand BAX Global and Emery, a former freight focused

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