United Parcel Service, UPS, is the world’s largest express carrier and package delivery company and a leading provider of transportation, logistics, capital and e-commerce services. UPS was founded in the United States in 1907. UPS Aviation was established in 1988. In 1991, its headquarters moved to Atlanta. It went public in 1999. It currently has 440,000 employees, a fleet of 237 owned aircraft and 413 leased aircraft.
It has 31 large distribution centers, 1,000 small and medium-sized distribution centers across the United States, and a land transportation fleet of 110,000 vehicles, not counting outsourced lines. “Where there is strength, there is strength.” Both FedEx and FedEx are asset-heavy enterprises with a scale of nearly 40 billion US dollars, and the two are often compared.
In 2015, the company’s UPS achieved operating income of US$58.36 billion and net profit of US$4.844 billion. UPS occupied up to 45% of the U.S. express delivery market. FedEx shipped 2.8 billion packages and UPS delivered 4.7 billion packages. , although FedEx’s per-unit revenue is higher than UPS, a comparison of the per-unit gross profit of the two shows that UPS’s per-unit gross profit is higher than FedEx. The main reason is that aviation costs are high, and UPS’s land transportation is more developed and more profitable.
In recent years, FedEx’s business structure has gradually shifted to converge with UPS, especially as the proportion of air transportation continues to decrease and the proportion of land transportation continues to increase. Different from DHL’s globalization, the cornerstone of UPS’s business is express delivery services in the United States. Looking at the segments, operating income from high to low is the U.S. domestic express, international express, supply chain and logistics segments, each accounting for 63% of the total revenue. %, 21%, 16%, the largest contributor to profits is also domestic express delivery. Judging from the average price of each piece, the average air freight price of FedEx and UPS is around US$20, and the land freight price is around US$7, both of which are much higher than those in China.
UPS stated in its 2015 annual report, “At present and in the future, we are facing competition from domestic and international companies of various service types. Some companies have differences in cost and organizational structure from ours. They will Provide some services and prices that we are unwilling or unable to provide. If we cannot adapt to competition in a timely manner, our finances and operations will be negatively affected.”
Despite obvious advantages, in the face of market changes, the three Big giants are also full of a sense of crisis. UPS used to conduct steady global expansion mainly through its own development and cooperative operations. After entering the 21st century, we began to strategically expand our express delivery business in Europe and emerging markets. In 2005, UPS acquired Sinotrans’ domestic parcel transportation business in China. Since 2013, UPS has sought to acquire TNT. However, due to the excessive impact on competition in the express delivery industry, the EU vetoed the merger.
With reasonable corporate structure, systematic solutions, continuous technological innovation and orderly pace of mergers and acquisitions, the development and growth of international giants does not happen by chance, but relies on strength and correct strategies to make solid progress step by step. Come out. UPS has several major investments in the Chinese market, including the Shanghai International Transshipment Center, the Shenzhen Asia-Pacific Transshipment Center, and the medical care warehousing and distribution centers in Shanghai and Hangzhou. It has more than 6,000 employees and more than 90 locations in China.
In recent years, UPS has repeatedly mentioned its transformation strategy for performance improvement: deploying a technology-driven operating system, providing unique and professional industry solutions, expanding its global network, and meeting the needs of global end users. If FedEx is dedicated to air express delivery, UPS is pursuing the goal of winning through change and being able to keep up with the changes of the times and the pace of its competitors.
UPS will conduct in-depth analysis of various eventualities, such as changes in domestic and foreign regulatory policies, increasingly stringent security requirements, privacy leaks or IT system crashes, labor rights or property damage lawsuits, in addition to environmental obligations, mergers and acquisitions Or cooperation may not bring expected benefits and other risks, which may have an impact on the company’s operational finance or brand image.
In the 20th century, in order to catch up with FedEx’s technological advantage, UPS invested tens of billions of dollars in new technologies and developed DIAD electronic signatures, GPS positioning and tracking and other technological means that are still very advanced today. Fortune magazine jokingly calls UPS a technology company with trucks. In 1998, UPS Capital Capital Company was established to provide customers with services including agency collection of payment on delivery, transfer of receivables, inventory mortgage loans, leasing of office equipment and warehousing equipment, and create financing convenience for customers.
UPS Capital’s innovative financial services are a revolutionary approach to modern business settlement. The business volume of international trade settlement in Asia alone has reached more than 100 billion U.S. dollars. UPS has formed an alternative global financial institution through the auxiliary and extended services of logistics. As the service timeliness gap between global express delivery companies narrows, the research and development and application of new technologies and new products have become a battleground for military strategists. The reason why UPS can develop new technologies so quickly and update them in a timely manner is because it has a A huge talent team. It is reported that UPS has more than 6,000 technical employees, and the company invests more than US$1 billion in information technology every year.