The so-called developed market is an evolution that has experienced sufficient competition and a long process. All express delivery companies have experienced or faced opportunities and challenges brought about by changes in transportation, technology, and people’s lifestyles. In addition to the extreme effects of the economic cycle, various regional markets have formed a relatively stable pattern, a coexistence situation of competition and cooperation.
For example, Western Post will regularly raise tariffs by 3% to 5% every year, which is almost unchangeable. The main reason may be that the growth of the external real economy has slowed down, and the huge basic investment has formed a barrier to entry. Even with the expansion of e-commerce, there is no crazy market like China in the world. In the best U.S. market, the US Postal Service, FedEx and UPS still firmly lock in the major shares. In the changes in the past few decades, the competition between the three has never ended, but there are no newcomers.
Today, USPS has shifted its main focus from first-class letter business to parcel business, competing with FedEx and UPS for the express parcel market. However, a closer look at their annual reports shows that competition is not as prominent as in China. Commercial express delivery is often good at providing trunk and air transport services, while the postal service mainly provides terminal delivery.
The credibility and extremely powerful delivery capabilities of the United States Postal Service cannot be matched by any commercial company. Its large personnel team makes its terminal network very suitable for B2C delivery, but its customer marketing, trunk lines and processing and distribution capabilities are not It is not so prominent. Many resource conditions for processing traditional mail cannot give full play to the advantages of parcel processing. Therefore, purchasing commercial trunk resources and undertaking delivery can help alleviate the outstanding personnel cost problem. Similarly, due to the cost of terminal delivery, the two commercial express delivery companies have to deliver the package to the destination post office, and then the US Postal Service delivers it to each recipient through its terminal network. This is more cost-effective than completing the delivery alone.
FedEx’s SmartPost and UPS’s Sure-Post are two products that cooperate with USPS. They are the bridge in the middle. Their low cost and economy are common choices for overseas warehouse delivery. For example, the sender first delivers the goods through a FedEx outlet or FedEx door-to-door pickup. FedEx is responsible for delivering the express package to the local post office where the recipient is located, and then the United States Postal Service delivers the package to the recipient.
It is understood that FedEx sends an average of about 2 million packages into the USPS delivery network every day through the SmartPost service, accounting for about 1/3 of its ground business. Similarly, the United States Postal Service will also use the delivery channels of FedEx and UPS to handle some inter-city delivery services. FedEx is the main air transporter of USPS express and first-class mail.
According to statistics, in 2015, FedEx provided services worth approximately US$1.37 billion to the US Postal Service, becoming the latter’s largest annual supplier. UPS provided services worth approximately US$154 million. Through cooperation, all three parties gain their respective business shares, and customers choose a variety of reliable services at reasonable prices, and the customer’s brand stickiness will be enhanced.
In 2015, the domestic express delivery market in the United States was approximately US$107.2 billion. UPS, FedEx, USPS and DHL together accounted for 97% of the market share, forming a typical oligopoly pattern. From 1998 to the present, excluding inflation and changes in market structure, the per-unit revenue and per-unit cost of FedEx and UPS have been basically stable, with average operating profit margins of 6.6% and 10.9%. UPS’s larger business volume and land-based express mail structure have led to its The profitability is significantly stronger than FedEx.
Other typical cases are that the Japanese market is monopolized by three companies: Yamato Transport (TA-Q-BIN), Sagawa-QBIN, and Japan Post (acquired Nippon Express in 2010), which together account for 92% of the market share. Among them, the leading company TA-Q-BIN Being an absolute leader and providing a variety of value-added services and refined operations, the Japanese logistics industry, whether it is express delivery or warehousing, can be regarded as the highest level of lean management in the world.
Several major European countries each have a large share of local express delivery, and DHL accounts for 41% of the European international express market share. After FedEx acquires TNT, the concentration of the European express delivery market will further increase. GeoPost and DPD, owned by LaPoste, have the largest market share in France and are said to be the second largest international parcel delivery network in Europe. The entire DPD group delivers 3.5 million items per day.
Hermes services are spread across Europe and is the largest in the British market. Its network is second only to Royal Mail RovalMail. The Netherlands’ GLS and the country’s postal service PostNL are active in the European market and provide delivery solutions for e-commerce sellers. Bpost is Belgium’s largest mail and parcel delivery service provider and is renowned for its cross-border parcel collection and dedicated line delivery.
In addition, DirectLink is part of PostNord, Purolator Express is affiliated with Canada Post, Estonian Post Omniva is mainly active in the Baltic Sea region, Italian BRT Bartolini Express is the leader locally, and Australia’s Toll and TNT are undoubtedly.
Due to the significant network effect + scale effect in the express delivery industry, it is necessary to establish a cross-regional service network and require sufficient business support, so that leading enterprises can reduce costs to a level that society can bear. Under the Matthew Effect, leading companies continue to reduce costs and innovate services, and the moat is getting wider and wider. It can be said that the most powerful network capability of express delivery is “not in the cloud, but in the terminal.”