Lecture Notes: Package Wars - UPS vs. FedEx

Introduction

• Theme: Intense competition between UPS and FedEx, compared to Coke vs. Pepsi.
• Both companies handle around 65 billion packages annually.
• UPS and FedEx are adapting to an e-commerce revolution.

Company Backgrounds & Hubs

• FedEx:
  • Home base: Memphis, TN (Superhub)
  • Memphis International Airport is the busiest cargo airport in the U.S.
  • Historical growth from 186 packages on the first night to 8 million per day.
• UPS:
  • Home base: Louisville, KY (Worldport)
  • Location benefits: 2-hour flight from 75% of the U.S.
  • Known for both delivery trucks and being the ninth largest airline.
  • Historical growth from 2,200 packages in 1919 to 6.4 million by 1982.

Sorting and Automation

• Both companies built hubs for efficient sorting:
  • UPS: Sorts up to 416,000 packages an hour; 1.6 million in peak seasons.
  • FedEx: Can handle up to 2 million packages in a single night.
• The sorting process includes routing packages and ensuring timely transfers between planes.

Technology and Efficiency

• UPS:

  • Uses NextGen technology for efficient flight landings.
  • Preload Assist System dictates precise loading of delivery trucks.
  • Avoids left turns to save time and reduce accidents.

• FedEx:

  • High-speed package scanning (13 scans per package on average).
  • Scanners in gloves for efficient package handling.
  • Tracking technology for biomedical shipments.

Innovations and Expansion

• UPS:

  • Expanding into healthcare logistics (e.g., skin replacement therapy shipping).
  • FDA certified warehouse spaces for healthcare products.
  • Partnering with companies like Sprint for tech logistics.

• FedEx:

  • Developing healthcare logistics as new business avenues.
  • Repair and logistics services for external customers.

Public Perception and PR Events

• Viral incidents highlight the importance of delivery quality (e.g., FedEx throwing a monitor).
• Both companies promote unique and large-scale deliveries (e.g., pandas, whales).

Conclusion

• UPS and FedEx continue to innovate and compete fiercely in the logistics and delivery market.
• They focus on expanding capabilities, improving efficiency, and maintaining customer trust.