In its earnings announcement today, United Parcel Service reported a third quarter with flat domestic volumes. During a nearly comparable period, FedEx domestic volume has grown by over 6%. The shift in market share reflect very different strategies in serving the B-2-C market FedEx’s Strategy FedEx has focused its domestic parcel business on serving the growing demand for business to consumer (B-2-C) deliveries. This allows it to go after the rapidly growing e-tailing business from both firms that sell exclusively on the web and those that have developed a strong web presence to meet consumer preference for web-based shopping at brick and mortar outlets. In choosing this strategic direction, FedEx [...] Read more »

I happy that this blog has been successful.   I am now averaging well over 30,000 hits a month and 100,000 if I write something that grabs the attention of the postal or parcel delivery market.  However, I would like to see what I can do to make it better. I know that I can’t spell and am an awful editor. Part of the problem is that after writing for a few hours, my readthroughs before posting miss an awful lot.  I am convinced I read the correct word whent the wrong word clearly is there.    If there is someone who would like to volunteer to help, e-mail me. I am [...] Read more »

In a letter to Senators Joseph Lieberman and Susan Collins, the GAO laid out three basic options for postal reform based on current projections for Postal Service volume and revenue. These options are 1) government subsidized federal agency; 2) the current structure with additional flexibility; and 3) postal services provided by a private sector business or businesses. These options are basically 1) return to the policy framework prior to the Postal Reorganization Act, 2) a limited modification of the status quo, or 3) put the Postal Service on the same path as liberalized national posts in the rest of developed world.   The postevaluates the GAO options and concludes:  Capital and [...] Read more »

In a story published today, Reuters stated that “United Parcel Service Inc (UPS.N) and FedEx Corp (FDX.N), which have long been undercut by the U.S. Postal Service’s low prices for package delivery, could have much to gain as the agency faces a painful restructuring.” Unfortunately, the article bases its conclusion by assuming that all or a significant share of the Postal Service’s parcel revenue would shift to these companies. In fact, the problems facing the Postal Service creates added risks to both companies business strategies given UPS’s and FedEx’s relationship with the Postal Service as both a customer and supplier. Reuters Overestimates the size of the Postal Service’s Parcel Revenue. [...] Read more »

Two commentaries on the future of the Postal Service represent different approaches to the future market.  These commentaries illustrate that it is possible to both develop policy alternatives from a conservative perspective that from the non-nonsensical and are easily dismissed to the logical and require more careful consideration even among those that think of themselves as moderates or liberals. Here are their conclusions – It is not hard to figure out which is which. Carrie L. Lukas – Managing Director, Independent Women’s Forum In her blog post, Time to Close Down Our Out-Dated Postal Service, Ms Lukas  writes: The simple fact is that the Post Office, which enjoys a government [...] Read more »