UPS vs. FedEx case Analysis
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FedEx vs. UPS
Brief History of FedEx & UPS
In 2004, the U.S. and China agreed to increase their air transportation flights, which delivered their goods between one another. This agreement represented the most dramatic liberalization of air traffic in the history of the two nations, and therefore FedEx Corporation and United Parcel Service, Inc. (UPS), the only domestic cargo carriers who were permitted to serve the Chinese market at the time were locked in to being the primary beneficiaries of this opportunity. The stock prices for both companies had rose on steady basis since these talks originally began, but FedEx share price skyrocketed five times the rate UPS has. Exhibit 1 below shows UPS and FedEx Stock price patterns from June 2003 to June 2004 relative to the S&P 500 Index.
During this time FedEx had the largest foreign presence in China, with 11 weekly flights almost twice as many as UPS. FedEx volumes have grown by more than 50% between 2003 and 2004. Although UPS fell behind FedEx in the Chinese market, it was still the world’s largest package-delivering company and the dominant parcel carrier in the United States. As the U.S. package delivery industry prospered, the international markets and especially China became a battleground for the two package delivery giants. FedEx had eventually developed customer logistical management, and was widely looked upon as innovative, entrepreneurial, and an operational leader. On the other hand UPS was repositioning itself as a leading provider of logistics and supply chain management services.
FedEx Corporation FedEx first took form as an undergraduate named Fred Smith developed a term paper for his Yale University economics class. Smith’s strategy proposed that FedEx would purchase the planes that it required to transport packages, where all other competition at the time used cargo space that was available on
FedEx vs. UPS
Brief History of FedEx & UPS
In 2004, the U.S. and China agreed to increase their air transportation flights, which delivered their goods between one another. This agreement represented the most dramatic liberalization of air traffic in the history of the two nations, and therefore FedEx Corporation and United Parcel Service, Inc. (UPS), the only domestic cargo carriers who were permitted to serve the Chinese market at the time were locked in to being the primary beneficiaries of this opportunity. The stock prices for both companies had rose on steady basis since these talks originally began, but FedEx share price skyrocketed five times the rate UPS has. Exhibit 1 below shows UPS and FedEx Stock price patterns from June 2003 to June 2004 relative to the S&P 500 Index.
During this time FedEx had the largest foreign presence in China, with 11 weekly flights almost twice as many as UPS. FedEx volumes have grown by more than 50% between 2003 and 2004. Although UPS fell behind FedEx in the Chinese market, it was still the world’s largest package-delivering company and the dominant parcel carrier in the United States. As the U.S. package delivery industry prospered, the international markets and especially China became a battleground for the two package delivery giants. FedEx had eventually developed customer logistical management, and was widely looked upon as innovative, entrepreneurial, and an operational leader. On the other hand UPS was repositioning itself as a leading provider of logistics and supply chain management services.
FedEx Corporation FedEx first took form as an undergraduate named Fred Smith developed a term paper for his Yale University economics class. Smith’s strategy proposed that FedEx would purchase the planes that it required to transport packages, where all other competition at the time used cargo space that was available on