Both origin stories are legendary, this season will define a new chapter in the storied histories of them both.
Federal Express (FedEx) and the United Parcel Service (UPS) changed commerce in ways that we may never be able to fully quantify. The upcoming sales season will be a tumultuous one for all of retail but especially the eCommerce industry, which is heavily dependent on the logistics infrastructure provided to them by the United States Postal Service, FedEx, UPS, and Amazon. The goal of this brief is to help retailers properly account for what will be a season of lower-margin sales and potential disruptions in service.
While often likened to one another, the two fulfillment companies have differing business models: UPS focuses on small package delivery and FedEx maintains the lead in handling time-sensitive express packages. Both companies benefited from the pandemic boom in online retail volume, but only one seems to be holding up under current pressures. UPS is up 70% over the past five years while FedEx is trading down 1.78% over the same time period. This isn’t as much about why as it is about how it may impact the online retail industry moving forward.
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