The delivery service industry includes mail and package deliveries for commercial and consumer use by road, air and ship. This report will concentrate on the package and express delivery industry, since the conventional postal and letter business is declining and mostly operated by state-‐owned companies, which are hard to compare with private-‐owned companies.
Four large companies, FedEx, UPS, DHL and TNT, dominate the market in Europe and the United States. TNT is the smallest among those four. However, TNT is the market leader in two major European markets, UK and Italy. The market in the United States is highly dominated by FedEx and UPS, which almost create a duopoly. The largest player in Europe is DHL, which has 32% of the German market. Furthermore, DHL has around 40% in the Asian market and over 50% in overall central Europe, the Middle East and Africa (Economis, 2015 April 10). Therefore, this report will examine these four companies to generate an overall picture of the delivery service industry. The following SWOT analyses will give a general overview of the strengths, weaknesses, opportunities and threats of the industry.
Strengths:
- Record Growth: Due to structural changes in the transport routes and order quantities in the freight industry, the package and express delivery service are growing much faster than the total freight market.
- Dynamic and sustainable growth of the industry is decreasingly susceptible to economic changes, due to the integration of their services in the everyday live. More and more everyday goods like food and cloth are ordered online and get delivered to the customers’ home.
- Increase of Efficiency: the transport of goods is getting faster and less costly due to highly efficient infrastructure.
Weaknesses
- Capacity constraints especially in peak phases: demographic changes resulting in lack of both highly qualified personnel as well as in the field of low-‐skilled workers.
- High dependency on major customers: The proportion of sales from major B2B customers is up to 90% for most companies.
Opportunities
- Volume increase in parcels: In particular parcel delivery to private consumer is driven by the strong increase in online trading. The proportion of returns is steadily increasing.
- Speed is becoming an increasingly important factor in the transport sector. In addition to the online trading of non-‐food products, also food is becoming more and more important.
- Just-in-time production
Table of Contents
- Introduction
- Strengths
- Weaknesses
- Opportunities
- Threats
- Mergers and Acquisitions
Objectives and Key Themes
This report aims to provide an overview of the package and express delivery industry, focusing on the four major players: FedEx, UPS, DHL, and TNT. It analyzes the industry's current strengths, weaknesses, opportunities, and threats (SWOT analysis) and examines the merger and acquisition (M&A) activities of these companies to understand their growth strategies.
- Industry SWOT Analysis
- M&A Activities of Major Players
- Growth Strategies (Horizontal, Vertical, Conglomerate)
- Impact of IT and E-commerce on the Industry
- Competitive Dynamics and Market Domination
Chapter Summaries
Introduction: This introductory section sets the stage by defining the scope of the report, focusing on the package and express delivery industry rather than the declining conventional postal service. It highlights the dominance of FedEx, UPS, DHL, and TNT in the market, noting regional variations in market share, and introduces the SWOT analysis framework as a tool to understand the industry's dynamics. The report's objective is to analyze these four companies to gain a comprehensive understanding of the delivery service landscape.
Mergers and Acquisitions: This section delves into the M&A activities of FedEx, UPS, and DHL, analyzing the strategic rationale behind their mergers and acquisitions. The text distinguishes between horizontal, vertical, and conglomerate growth strategies. FedEx's acquisitions reveal a dual focus: vertical growth through IT acquisitions (GENCO, Bongo) to enhance e-commerce capabilities and horizontal growth internationally through acquiring competitors (TNT, Rapidão Cometa, etc.). UPS follows a similar pattern, emphasizing both vertical integration in IT and horizontal expansion with an additional focus on diversification into pharmaceutical logistics. DHL's M&A activities indicate a focus on vertical integration through IT acquisitions (optivo, intelliAd) and horizontal expansion in specialized areas like cold supply chain logistics. The chapter highlights the competitive landscape and the impact of regulatory decisions, as seen in the failed UPS attempt to acquire TNT due to European Union concerns about reduced competition.
Keywords
Package delivery, express delivery, FedEx, UPS, DHL, TNT, SWOT analysis, mergers and acquisitions (M&A), horizontal integration, vertical integration, conglomerate growth, e-commerce, logistics, information technology (IT), pharmaceutical logistics, competitive landscape, market share, growth strategies.
Frequently Asked Questions: Comprehensive Language Preview of Package and Express Delivery Industry
What is the main focus of this report?
This report provides a comprehensive overview of the package and express delivery industry, concentrating on four major players: FedEx, UPS, DHL, and TNT. It analyzes their strengths, weaknesses, opportunities, and threats (SWOT analysis), and examines their merger and acquisition (M&A) activities to understand their growth strategies.
What are the key themes explored in the report?
Key themes include industry SWOT analysis, M&A activities of major players, different growth strategies (horizontal, vertical, and conglomerate), the impact of IT and e-commerce, and competitive dynamics within the market.
Which companies are analyzed in detail?
The report focuses on FedEx, UPS, DHL, and TNT, examining their individual strategies and market positions within the global package and express delivery industry.
What types of growth strategies are discussed?
The report analyzes horizontal, vertical, and conglomerate growth strategies, illustrating how these companies use M&A to expand their businesses.
What is the significance of mergers and acquisitions (M&A) in this industry?
The report delves into the M&A activities of the four major players, explaining the strategic rationale behind their acquisitions and how these activities contribute to their growth and competitive advantage. Examples include FedEx's acquisitions to enhance e-commerce capabilities and UPS's focus on diversification into pharmaceutical logistics. The impact of regulatory decisions on M&A is also discussed.
How does the report analyze the industry's dynamics?
The report uses a SWOT analysis framework to understand the industry's current strengths, weaknesses, opportunities, and threats. It also examines the competitive landscape and market share of the dominant players.
What is the role of information technology (IT) and e-commerce?
The report highlights the significant impact of IT and e-commerce on the package and express delivery industry, noting how companies are using technology to enhance their operations and capabilities, particularly through vertical integration in IT.
What is the role of the introduction and chapter summaries?
The introduction sets the context and scope of the report, defining the industry and highlighting the dominance of the four key players. The chapter summaries provide concise overviews of the main points covered in each section.
What are the key words associated with this report?
Key words include: Package delivery, express delivery, FedEx, UPS, DHL, TNT, SWOT analysis, mergers and acquisitions (M&A), horizontal integration, vertical integration, conglomerate growth, e-commerce, logistics, information technology (IT), pharmaceutical logistics, competitive landscape, market share, growth strategies.
What is the overall objective of this report?
The report aims to provide a comprehensive understanding of the package and express delivery industry by analyzing the strategies and market positions of FedEx, UPS, DHL, and TNT. It seeks to explain how these companies use various growth strategies to maintain their dominance in a constantly evolving market landscape.
- Quote paper
- Arthur Ritter (Author), 2015, Delivery Services. An Industry Report about the Corporate Finance Practices, Munich, GRIN Verlag, https://www.grin.com/document/299130
