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UPS stands for United Parcel Service, and it is one of the most popular courier operators in the US. This company focuses on both supply chain management and package delivery. UPS has an astonishing history, being launched back in 1907. Its headquarters are located in Atlanta, Georgia, and the company has a market share of 28-29%.
Although the main activity of the company is represented by logistics, UPS also provides other services such as Freight forwarding and courier express deliveries. This may be a strong company, but the delivery industry is full of powerful and threatening competitors. I will discuss some of these competitors in the following sections below.
UPS Competitor Analysis – Top 5 Competitors
As promised, let’s take a look at some of the which relates to important competitors of .
FedEx is known by everybody as being a multinational delivery service business that is known not only in the US but all over the globe. It was founded in 1971, and its headquarters are located in Tennessee, United States. FedEx offers courier services in around 220 different countries, and it has numerous warehouses and stores in many of those countries.
One of the main perks offered by this company is its overnight shipping service. Clients also have the possibility to keep track of their orders and receive updated real-time notifications regarding that aspect. Check out FedEx’s SWOT analysis here.
- Most clients consider the services provided by FedEx as being excellent;
- It offers a very reliable tracking system;
- With this company, you can still receive your packages even during weekends, on Saturdays;
- Those who want to ship larger containers through FedEx can negotiate more affordable shipping rates.
- Compared to UPS and other similar providers, FedEx applies higher shipping fees;
- It lacks free package pickup.
DHL is another well-known shipping company that was created in 1969 in the city of Bonn, Germany. The company offers courier, international parcel, and express mail services. At a global level, DHL is the biggest shipping company in the industry, especially when we consider air and seamail.
Since its launch, it has developed a wide and complex international freight network that serves no less than 220 countries. This success was achieved due to DHL’s top-notch in-house consultancy and effective marketing and communication strategies. There’s even a dedicated innovation center that enables both stakeholders and clients to engage and interact with assigned company experts.
- It is a shipping company that has very well-structured operations;
- In many developing countries, DHL has seen constant growth;
- Although the shipping speed of the company is pretty similar to many of its business competitors, it seems that DHL manages to achieve a speedier delivery time compared to certain other logistics providers such as UPS;
- With this provider, there are no pickup fees;
- DHL provides a wide range of different domestic and international shipping services, including DHL SameDay Sprint line and DHL Express Easy.
- There are certain extra charges that might occur occasionally;
- DHL doesn’t have a very significant presence in the United States.
Let’s move on to the next UPS competitor. This time, I will talk about DB Schenker. The company focuses on rail freight and logistics. Its headquarters are based in Frankfurt, Germany, and, according to its representatives, the main goal of DB Schenker is to offer a one-stop logistic service that consists of both back and front-end operations.
Their supply chain solutions are truly innovative, which doesn’t come as a surprise considering the company has been a major player in the shipping industry for the last 140 years. They always create flows of goods and products in a very systemic manner. DB Schenker has over 72,000 employees and operates in around 2,000 locations.
- The company is always investing time, effort, expertise, and money into developing new and innovative solutions to satisfy their stakeholder and customers;
- The entire structure of the business is well-organized;
- DB Schenker is a top competitor in several markets: consumer goods, technology, special transports, automotive, and more.
- I couldn’t find any negative comments regarding its services.
I’m sure you’ve heard of TNT Express since it’s such a popular shipping and courier service company. It’s a shipping business created in the Netherlands in 2011. After a while, TNT became a FedEx subsidiary. TNT Express owns business operations in around 61 countries. It is known for its documents, parcels, and freight pieces delivery. It serves approximately 200 countries.
Experts perceive TNT as a major innovative force in the delivery market. This company provides a wide range of different services, and it connects businesses and clients at a global level. It’s an award-winning courier company that delivers millions of packages with great care and attention.
- The brand is a well-known and trusted one and its strength increased since it was bought by FedEx;
- It seems that the company representatives try their best to deliver the packages in good condition;
- The company is known for its innovative strategic approach;
- It has had official recognition since it won several industry awards.
- A few customers have complained about the poor customer support the company offers;
- Others say that there are delays regarding the shipping date and the charges are a bit high.
USPS stands for United States Postal Service, which is an independent agency managed by the federal government. This company is the one that’s responsible for the entire postal service within the United States. This federal agency is independent and self-supporting. It delivers packages, documents, and more to every single address located in the US. Its drivers serve around 155 million post boxes, residences, and businesses.
For its operating expenses, USPS doesn’t receive any tax dollars. Therefore, it must rely on the sale of its postage, products, and other services in order to sustain its various operations. USPS owns over 31,000 retail locations. In terms of its annual revenue, the company gains almost $70 billion.
- They have improved their services quite significantly over the last couple of years;
- More and more customers say they’re pleased with USPS’ customer support;
- You can keep track of your delivery directly on your phone;
- The company’s platform is very user-friendly and intuitive;
- Customers will pay cheaper rates if they want to send smaller packages;
- On Saturdays, the delivery is free;
- USPS delivers everywhere, including to remote areas.
- If you want to send larger packages, USPS might not be the best choice;
- Although the company has initiated certain operation and technology improvements, they still deal with tracking issues;
- The transit time is longer with USPS.
UPS Pros and Cons
Before I tell you more about UPS’ strengths, weaknesses, and market threats, as well as opportunities, I first want to list the company’s main advantages and disadvantages. There’s one thing you should know: UPS isn’t the ideal choice for all business owners. There are certain pros and cons that you will benefit or deal with when using this courier service.
Here are the things that might make you want to work with UPS regarding the delivery of your packages:
- The company offers numerous expedited shipping choices, including the same-day and next-day deliveries;
- Compared to other competitors such as FedEx, UPS applies more affordable rates, especially when it comes to smaller or lighter packages;
- Clients can also benefit from important discounts when they want to send larger volumes;
- The tracking system of the company is by far the best in the industry; even better than the one used by FedEx;
- Besides delivery, UPS also provides numerous other helpful services like packing, making copies to documents, notarizing documents, utilizing a 3D printer (it’s available only at some of the physical stores of the company), and picking up your mail (this service can only be requested if the client has a PO box).
Obviously, nothing is perfect. So, below, you will find some downsides that might make you reconsider your decision of requesting one or more of the UPS’ services:
- Although this courier is pretty affordable when it comes to delivering lighter packages, the fees increase if you want to ship a heavier package;
- Heavier packages will come with a lot of extra surcharges and fees, especially if you want to send the package abroad or overseas;
- UPS doesn’t provide free package pickup;
- One of the major disadvantages that UPS has is the fact that it doesn’t provide free delivery on Saturdays.
UPS SWOT Analysis
You can discover a lot of useful things when you look at a company’s strengths and opportunities but also at its weaknesses and threats. So, let’s take a closer look at the SWOT analysis of UPS.
- Strong global presence – this courier has the UPS Worldwide Express service as well as its well-known UPS Plus service, both of which cover over 100 different countries, regions, and territories. Moreover, a total of 220 countries are served by the UPS’ small delivery service;
- Smart network – the company has managed to develop an almost perfect integration of its collection and distribution mechanisms. This further translates into effective delivery operations;
- Highly innovative – to become able to deliver parcels and packages all over the glove while also meeting timelines requires some serious innovation. The company’s Chief Innovation Officer, together with his team, have come up with a smart logistics network, and they have even won an award for it.
- Competitive prices – the best strategy a courier company could apply is providing high-quality services at reasonable or even affordable prices. UPS is known for its competitive prices when it comes to its overnight shipping service.
- Online tracking – the company offers a very advanced tracking system that all customers can use. This software keeps track of more than 290 million deliveries each day.
- Great customer service – according to most clients, UPS is known and appreciated for its excellent customer support. In fact, the company’s client satisfaction level exceeds the satisfaction level of FedEx, its competitor.
- Fast deliveries – one of the most powerful strengths of UPS is represented by its timely deliveries. This was made possible due to the courier’s operational strategy.
- Reliance on the US market – UPS operates in many places all over the planet. However, the company’s most important market is in the US. So, if the US market suffers because of an economic recession, UPS will also be negatively impacted.
- Operational problems – it’s a well-known fact that managers have postponed plenty of equipment upgrades and delivery system improvements for years. Continuing to use their current system will create many problems since it’s outdated. On the other hand, implementing a new one will cost the company around $20 billion, which is a huge sum.
- Burdening purchased transportation costs – every time UPS sends its deliveries through third-party transportation carriers, the purchased transportation cost is directly impacted by it. In 2019, almost 20% of the company’s operating expenses were assigned to purchased transportation.
- Adverse financial impact – this issue normally occurs around the time of peak holiday season when the volume and number of packages are doubled; hence, UPS’ expenses also increase.
- Poor employee safety – recently, one employee contracted the new coronavirus and passed away. Others have suffered mild injuries over the years. This could become a bad environment for the company’s staff and might lower their morale and productivity.
- Drone testing – lately, this courier has significantly expanded and tested its drone delivery capabilities;
- Expanding through acquisitions and mergers – due to mergers and acquisitions, UPS is able to enter new markets and increase its market share;
- Expanding their target market – the main activity of the company is its B2B and B2C business delivery service, mostly for larger clients such as Amazon. UPS could consider including ordinary customers into their target market;
- Strengthening of e-commerce operations – this industry is growing quickly, and UPS should try to keep up with it. The company could benefit from improving its e-Commerce services and operations;
- Shifting to a 7-day delivery schedule – UPS has recently initiated its 7-day delivery service. Before that, the company used to operate for six days per week, from Monday to Saturday.
- Fierce competition – UPS has several important competitors such as FedEx, DHL, and others. Therefore, the company’s profits, revenues, and market share are constantly under threat;
- Trade tensions – UPS is a global operator, which means that it relies on revenues sources from multiple regions of the world to maintain its profitability, stability, and sustainability;
- Looming recession – several countries around the globe are already suffering important economic loss because of the COVID-19 pandemic. UPS has published its 2020 earnings, and it seems that the courier has experienced a pretty important profit drop;
- Strike threats – the UPS workforce is quite frustrated because of the whole pandemic situation, and you never know when or if they’ll decide to go on a strike. This could cost UPS millions of dollars.
UPS Competitors Analysis – Frequently Asked Questions
Question: Is UPS Different from FedEx?
Answer: FedEx is one of the biggest competitors of UPS. But their business approach is pretty different. For starters, UPS relies mostly on domestic ground package delivery, whereas FedEx is popular for its worldwide air express freight service. UPS applies the strategy of a single network distribution more often than FedEx.
Question: Which Is a Bigger Courier Services between UPS and FedEx?
Answer: These two companies are the biggest courier delivery services in the world. UPS is larger than FedEx when it comes to revenues and net income: $53 billion in revenue and $3 billion in net income. FedEx has $42 billion in revenues and around $2 billion in net income.
Question: Who’s the Biggest Customer of UPS?
Answer: The biggest and most important customer that UPS has is Amazon. However, a rumor that appeared in 2020 helped us find out that Amazon was planning to stop using UPS in order to focus more on the delivery of its own customers’ orders.
UPS Competitors Analysis – In Conclusion
So, should you choose one of the competitors of UPS or not? Well, it depends on a lot of aspects like the quantity and volume of the items you need to send, the level of satisfaction you have when using the company’s customer support, and many other factors.
For instance, UPS is a great choice when you need to transport many fragile items, or you need your shipment to be properly packed before delivery. With UPS, you know that your delivery will arrive safely at its destination. And, if you also consider some of the company’s other services helpful or necessary, then UPS could definitely be the right option for your needs.
Before choosing a certain courier company, you should ask yourself the following questions:
- How fast is the company’s delivery service?
- What is the company’s tracking system that keeps you notified about your package?
- Do they offer delivery proof?
- Is this a reputable and well-known courier?
If it’s a timely service that guarantees the safety of your packages, then it should be the right solution for you. One thing is for sure: UPS makes everything in its power to offer its customers a satisfying experience, and it has made this part of the company’s mission statement.