Battle for Value 2004: FedEx Corp. vs. United Parcel Services

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1 . FedEx has virtually invented customer logistical management by using a handheld barcode scanner in 1986 to be ahead in order tracking and process monitoring, UPS didn’t come close until 1991 with electronic signature tracking and began their own logistics group in 1992. In 1975 UPS guaranteed delivery to every address in the continental US, FedEx could guarantee delivery to every one of the 50 states in 2002. Both began investing in information technology, aircraft and facilities to support service innovations, maintain quality, and reduce costs. Fed Ex has 50000 ground vehicles, 625 aircrafts, 216500 full- and part-time employees that ship more than 5.4 million packages daily UPS has 88000 ground vehicles, 583 aircrafts, and 360000 employees (64% were unionized) and moves more than 13 million packages and documents every day. The air –express segment was a 25 –billion portion of the US package –delivery industry and was concentrated in letters and packages and overnight and deferred. All FedEx’ s business activities were in the air –express segment while only 22 % of UPS revenue were from from the next day air business , however the two companies engaged in a furious competition to dominate the sector . The two companies created a various number of strategies to meet the competition such as: Customer focus – both companies emphasized their focus on the customers by listening to customers needs, providing customized solutions and committing to a service relationship. Price competition –UPS cut the price of overnight Fedex letters by half Operational reengineering -because of the price competition the reduction of cost became a priority Information technology – FedEx uses COSMOS (Costumer Operation Service Master Online System) which transmits data from package movements , customer pick ups, invoices, and deliveries to a central

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