Fedex And Ups Models Commerce Essay

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Nowadays, the huge communication between all world parts has made the world to be like a small village. Goods and packages are being shipped from all over the world and people and business want to get their deliveries on a specific time. Courier industry plays a major role to achieve a better deliveries and services for the customers.

Fedex and UPS Models:

Fedex Model:

Fedex is a giant courier delivery and shipping service business that has played a major role in courier industry. Fedex is working on the delivery of packages and goods all over the world using different means. This business is consisting of several business parts: FedEx Express, FedEx Ground, FedEx Freight, and FedEx Services.

The business model of Fedex basically depends on the independent operation of its several parts and the group competition under the name of Fedex. The management idea of Fedex parts is to have mutual and shared management base and efforts [1].

Fedex business have applied hub and spoke network system to achieve better connection between the different parts of the business and the customer needs and expectations [1].

The high flexibility and power of Fedex in logistics and operations let them offer different business policies. The high quality of service that the business offers for the customers allows it to be the strongest competitor in the market also; Fedex business model is based on different customer needs. The division of this business offers the ability and the flexibility to deal with those several needs; each one of the parts is intended to serve a specific market and particular requirements [2].

FexdEx business parts can concentrate on their customer needs and on its own market. Fedex Express job is; to deliver the small packages such as documents in a fast time based on customer date required and it guarantees to return the money back if they can’t make the delivery on time. The Fedex ground concentrate on the delivery of small to medium goods with the focus on business to business or business to home delivery; the constraint of time and destination is less than that in Fedex express. The heavy goods part is Fedex freight; this part offers the delivery of goods that are more than 130 pounds, all over the world with a flexible time target. Finally, the Fedex services which offer different services; shipping goods that needs particular concerns in their handling system and the other service to make sure that the shipping activities is satisfying the customers [2]. We can say that the division of Fedex parts depends on the customer needs and expectations and have high flexibility to deal with markets changes.

The architecture of Fedex is strong and robust, as all parts are performing their own services and purposes and this results in customer satisfaction and high quality of services. Fedex has its own structure and tools to serve the customers efficiently; aircraft, warehouses and goods facilities, and the ability to follow their deliveries give it the ability to control the due dates and the high quality service. The continuous improvements is one of the major goals for Fedex, for example, it has a university to make their job more efficient and innovative [2].

Fedex business model allows it to make a huge customer foundation and be separate from their competitors due to the high diversity of their business parts services. Moreover, since Fedex has several parts with separate operation and methods; this enables the business to come up with new ideas for their tracking structure. Finally, the customer vision of Fedex business will be better because they can offer different services [2].

Fedex business model cost is very high due to the high diversity and commitments of their services. This could make the customer that doesn’t have the ability to pay, to change from Fedex to another business [2].

UPS Model:

UPS is one of the most famous courier businesses; it offers the delivery of packages and goods using different means. This business has entered the global international market in 1980 and recently it uses high technology and a huge network to control their business efficiency [3].

The UPS business model is driven by customers; they have changed their old business model (the push oriented model) to make more satisfaction for their customers. In these days, the customers have very high knowledge about the goods and the services and this led UPS to adopt the customer pull model. UPS has taken some steps in order to transform from the old model into the new model: concentrating on the distribution and logistics, developing their ability to integrate the major parts of the business such as goods, cost and data, applying high technology to build the new services, hiring brilliant persons, analyzing customer needs and expectations, adopting innovative idea to improve and increase the growth, and setting a good environment to satisfy all customers [4].

UPS keep offering new service for their customers and they make new markets all over the world. UPS established customer information services to be in contact with them. A tool like Total-Track makes the customer able to track air and ground goods while a tool such as Maxi-Ship can put the customer on the entire picture to control the whole delivery process [3].

Fedex vs. UPS

Fedex pay more attention for their profit by making the supply chain more efficient and increase its value-added for the shareowners while UPS focuses on broad employee base and ownership this results in providing long period competitive benefit and high profit for its shareholders [5]. The employees of Fedex can participate to improve the business which leads to better results while UPS system does not allow this kind of flexibility [5]. Fedex information technology is very high and advanced which offer a better delivery quality to customers while the information technology in USP is used to increase the efficiency of the delivery to customers [5].

Logistics Management:

The logistics management is a major element of the supply chain management. Logistics management connects the information gained from the customer to the point of delivery. This concept prepares the needed plans, means of applications, and controlling process of the services and packages in courier industry [6]. The supply chain in courier industry is complicated so applying the concepts of logistics management could improve the whole process and decrease the cost of the shipping and deliveries. Logistics automation principle can be used in this industry to help controlling the supply chain flow and to improve the overall operations by the mean of automated computer software.

Operation Management and Courier Industry:

The volume of courier industry is huge since it deals with different goods deliveries and different customers all over the world also it uses different means to deliver the packages and goods. This huge size needs an optimization tool to maximize the profits and control the total cost.

Operation research tool can manage and optimize the following aspects in courier industry:

The path of the means of transportation: the factors that affect the routing of the vehicles or airplanes or any means of delivery or transportation can be managed to cut the cost of the fuels and operations.

The point of delivery and the related transportation for customer.

Using vehicle that can decreases fuel consumption like the hybrid vehicles.

Managing the locations of the warehouses based on customer demands and the concentration point of the higher demand in order to minimize the cost of the delivery [7].


Courier industry is being more and more complicated and interacted and the customer needs variation is very high. UPS and Fedex have developed their own business model to achieve higher profit and quality of service. Fedex has higher flexibility and it been divided into different business parts to operate separately and compete as one unit. UPS has developed the customer pull model in order to drive the business based on customers’ needs and it has applied a high technology tool to achieve more contact with the customers. The new challenges of high shipping and operation costs in courier industry can me managed using the logistics management to control the overall processes of the supply chain points. Moreover, operation management tools can be used to cut and minimize the costs of vehicle routing and shipping costs.