Fed Ex and United Parcel

Fed Ex and United Parcel Services postal system delivers written documents and packages containing other matter to destinations around the world (Wikipedia 2006). Any such document is referred to as mail or post. A postal service may be private or public. It transports letters, packages, savings accounts and passport applications. In the United States, private companies, such as FedEx and United Parcel Service compete with the federal government's United States Postal Service or UPS, particularly in delivering packages (Wikipedia).

UPS makes the claim that it is the world's largest package delivery company, having been rated by Fortune Magazine as number one in the category and retaining its position in the World's Most Admired List (Bozman 2003). It is said to have an 80% market share, with its closest competitor, FedEx with only a2% market share, while the USPO has 16%. UPS delivers packages and letter to more than 200 countries and territories throughout the world. It provides logistics services with its supply chain management for large companies, it draws its reputation as the leader in the industry, which provides purchased goods via the internet. UPS won the award, based on factors, which included quality of products and services, innovativeness, global-ness, and social responsibility. It has served as a backbone of e-commerce for U.S. e-commerce companies and foreign-based e-commerce companies. Its channel distribution claims to offer impeccable shipments for domestic and global packages and manages even customs and brokerages. It runs its own website where customers and inquirers can acquire quick, accurate and easy information on the company's service. Information include request for pick-up, package tracking, rate quotes, wireless registration, transit times and ordering supplies, which can be performed easily and quickly. UPS also offers extensive support service through its website. The customer can submit the package or document's tracking number and follow up on the shipment on a daily basis. It offers complete management service for customers by performing true door-to-door delivery service around the world. It takes a product, warehouses it and keeps inventory, provides labor and technology, and then moves the product domestically and globally to its destination. Its strong and capable brand symbolizes volumes to businesses and customers who use it. It forges a relationship with a company, which uses its supply chain management. It operates through a dynamic pricing structure, which benefits both UPS and its loyal customers and through which UPS uses as an opportunity to reward them with better freight charges. Its logistics services include supply chain management, re-engineering and management. Although it has not drawn a very good revenue picture in the past three years, it has steadily increased in each of the succeeding years and projects an even greater increase in the future because of its global market expansion. UPS has several locations throughout the United States and throughout the world. An enterprise has an edge when it forms a partnership with UPS because of its topnotch supply chain, which enables the business to cut down on costs. This advantage encouraged UPS to embark on becoming a transportation company and offer its supply chain solution to businesses confronting distribution problems. It has the brand to boast of. Its successful and prominent brand is its most valuable resource. Brand image is the essence and basis of business identity and strategy. UPS has thus derived its strong brand name on the concept world wide it uses the catch line "What can Brown do for you" to invite specific markets for major accounts. UPS was, for example, was a major sponsor of the winter Olympics in February 2002. It also launched a program, which would rename Mail Boxes, etc. with the UPS store banner. Mail Boxes, etc. has a large customer base and it will bring UPS' name into it with its easily visible and recognizable brand name. UPS' claim to primary position is based on the e-commerce hype, which says that the world is the market place when people go online. But that is not very true without a comprehensive, accurate, timely and easy-to-use physical distribution like UPS'. UPS says it can offer precisely that business partnership with an extensive distribution system, which will allow the business or company to save both time and money to ship its products domestically and/or globally as the markets expand and reach out (Bozman). There have, however, been complaints of mishandling of packages or difficulty making insurance claims for lost or damaged packages. Some complainants have gone as far as putting up an entire website for their grievances. One of these was the United Package Smashers. Others use consumer feedback sites, such as Epinions.com. Hundreds of storeowners of both un-rebranded UPS stores have disputed that UPS bought the franchise just to enrich its owners at the expense of store owners (Wikipedia).

FedEx Corporation is a courier company, which offers overnight ground, heavy freight, document-copying and logistics services (Wikipedia 2006). It was founded in 1973 from the original vision of an air-express industry from an initial fleet of 14 small airplanes (Smith 2006). This fleet grew to 419-17 years later in delivering packages all over the world. And by the end of 1990, it had a personnel complement of 90,000, which processed 3.5 million shipments on a daily basis and earned the company $7 billion. It has received 195 awards, the most prestigious being the Malcolm Balridge National Quality Award from U.S. President George Bush and the first service company to receive it since the establishment of the award in 1988. FedEx company philosophy is customer satisfaction and customer satisfaction. Its job is selling and built with the promise that a package or document will arrive "absolutely and positively overnight" in its destination. Its employees work with their hands with the end-view of fulfilling that pledge of the customer's perception of quality. This single motivation or direction drives its employees to exert their consistent best and thus determine the success of the company in the current highly competitive global economy. In its pursuit, Fed Ex operates a system and processes to insure quality service. The system includes a quality improvement program; the formation of quality action teams, which use a problem-solving process called FADE; a customer satisfaction measurement through what FedEx calls a "Hierarchy of Horrors;" service quality indicators; customer service surveys for trends, segmentation and service attributes; customer-supplier alignment; guaranteed Fair-Treatment Process for employee support and based on its "People First" corporate philosophy and a leadership evaluation awareness process. FedEx also uses technology and innovation in rendering excellent service. Its Customer, Operations, Service, Master Online System or COSMOS, provides and handles worldwide network transmission of customer information through its central database located in Memphis, Tennessee. It also uses a digitally assisted dispatch system, or DADS, and a computerized shipping-management system or Powership system. Through DADS, the company communicates with its 30,000 couriers who are equipped with interactive screens. Its Powership system, on the other hand, prints customers' air bills for programmed addresses, downloads transactions to FedEx, manages accounts receivable and tracks packages down through COSMOS (Smith).

Critics and other observers have said that FedEx stocks had gone up 10% as the leading air express shipper and higher than projections made by analysts (Sivy 2006). (Sivy 2006). They predicted excellent results and a bright picture for the company for the rest of the year and the succeeding fiscal year. Operating margins were also said to have improved and exceeding analysts' projections by 5 cents a share. All other indicators for the entire year reflected similarly positive outcomes. Three of FedEx's businesses were said to be hitting their mark. Its quarterly operating income of the Express division went up by 30%, ground shipment by 20% and freight by 49%. Only the revenues of its copying and business-services company went down by 56%. The company attributed its overall success to its policy of fuel surcharges on shipping fees, which enables it to pass on the effects of high oil prices through to customers. The surcharges, often more than 10% of shipping cost, encountered negligible customer displeasure or complaint. FedEx projects solid growth for itself for the rest of the current fiscal year and the next one. In pursuing further global growth through capital investment, it planned to spend $2.9 billion, three-quarters of which would go to fund growth. Last May, it announced that its acquisition of Watkins Motor Lines for $780 million would enhance profits its freight division. It addressed its problem on Kinko's by spending for the opening of new locations, refurbishing stores, and retraining workers. These responses were expected to solve problems and enhance all systems and divisions up to the bottom. It projects annual earnings to grow at as much as 15% in the next five years, which would be a faster rate than that of the sector itself. Even given already excellent results and superior long-term prospects in recent years, FedEx share traded at less than 17 times of its estimated earnings for the fiscal year when it should be surging at high levels (Sivy).

The major conclusions contained in the report of the Consumer Advocate on Quality of Services provided by the postal service to the public were that postal service had strong brand equity but potentially weaker customer equity; postal brand equity was evidently high for a trusted institution, which delivers packages and other items globally (Postal Rate Commission 2001). One global business mentioned in the report as a technology leader with high brand equity was at&T. Customer equity is that value of future business purchased by the customer based on brand equity, which in turn means consumer acceptance of the product, customer relationships and customer perception of the value. The postal service would encounter both retention and value problems and would be viewed as difficult to do business with, bureaucratic and would provide less value than its competitors. If there were no competitors, these would not present as problems under a stable and unchanging environment. However, that would not be the case, as the environment was quite susceptible to change. The Commission report said that consumer experiences registered relatively low customer equity according to his or her perceptions of low value, slow deliveries and inability to meet consumer expectations. The Commission is obligated to provide a strong and consistent voice to the views of consumers and argue for equity on their behalf and that of small businesses, both as senders and recipients. Quality of service, the combination of product offerings, the availability of service, and the customer-vendor relationship are the major components of the postal experience. In its highly and increasingly competitive environment where consumers have the right to choose, customer equity is very significant and weighty. Brand equity is that value of a brand determined or established by consumer preferences and spending patterns (Postal Rate Commission).

The key findings of the report on priority mail were that first-class mail appeared to provide equal or better-quality delivery times than priority mail and that postal service appeared to pressure on the public to buy priority mail by insisting that priority mail was transported on the Express Mail network. This was viewed as quite misleading because Express Mail was transported, processed and delivered ahead of priority mail. The Postal Inspection Service also reported in 1999 that return receipts paid for by customers were often never returned to them, or if these were returned, they lacked the necessary signature. The Office of the Inspector General reported to the House of Representatives in March 2001 on similar failures to provide adequate certified mail/return receipt service. The finding also noted that postal service staffing during the tax season was very slow, leading the people and the federal government to lose much interest income. Furthermore, postal service failed to adequately inform buyers about the limitations on insurance coverage and the type of documentation needed for reimbursement. As it was, the postal service required the public to pay attention to lengthy technical regulations and understand the limitations of coverage (Postal Rate Commission).