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Top Dog Versus Underdog - UPS vs FedEx

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One of the biggest business rivalries we see today is that between UPS and FedEx. Both are extremely successful companies but operate in slightly different ways. UPS leads the fight with a value of around $94 billion followed by FedEx with a value of $51 billion. Why is UPS so much more successful than FedEx?

Both specialize in package delivery and their rates are even very similar. The main difference between the two is that UPS is geared more towards ground delivery with small packages and has more delivery trucks whereas FedEx is geared more towards international delivery and has more airline freights. Both companies, however, do a little bit of everything. Another big difference between the two is that UPS has better returns for it's shareholders and the company is mostly operated independently and owned by franchises. FedEx is unable to achieve this because their clients usually use multiple services from them making it difficult and unrealistic to operate independently.

FedEx definitely has the potential to surpass UPS someday but I think they should focus more on their international delivery. They are expected to grow exponentially in this area with an ever growing fleet of airline freighters. I think if they do this, it will make it easier for FedEx to operate more independently and have better returns for shareholders as well. For the time being, I think UPS is more successful just because it caters to the individual with small package delivery. Even when FedEx drops off international packages, they are usually delivered to their final destination by UPS trucks. I think FedEx's biggest weakness is trying to do too many things at once and not having the manpower to compete in certain areas.



Sources:
Wei, Jay. “UPS vs. FedEx: What's the Difference?” Investopedia, Investopedia, 18 Nov. 2019, https://www.investopedia.com/articles/markets/120115/ups-vs-fedex-comparing-business-models-and-strategies.asp.
YouTube, YouTube, https://www.youtube.com/watch?v=OWMbvPM7qrM&t=248s.

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