Future of Parcel Service Industry?

[wkmac]

I just found a link from another part of Browncafe concerning a study released 2 years ago about the impact of Parcel Transportation on US Commerce. Here's the link:

https://web.archive.org/web/20050313120645/http://www.seas.upenn.edu/sys/logistics/parcelstudy.html

I haven't read the complete 40 page study but I did look over the 5 page summary and a couple of things stood out.

In 1980, the Gross Revenue of the Parcel Industry was $10 bil and in 1997 that number was at $37 bil
so in 17 years there was a more than triple in Revenue and this was dominated by Airborne, FedEx, USPS and UPS with UPS being the big Gorilla here. I also found the graph on Air Transport taking a steeper track up in the mid 80's about the time UPS airlines really started taking flight. Can the US economy grow again to allow this kind of growth rate for our industry domestically speaking?

Also notice the revenue of "For-Hire" and "Private" trucking concerns. We're talking a combined annual Revenue of $390 bil which is a large chunk of change. How much of this could go UPS? How much of this could go UPS Logistics with the added warehousing, inventoring, etc. etc.?

Just found what little I had time to read interesting and hope to read the full 40 pages over the next day or 2. Any thoughts!

 

[batavia]

Thanks for the report link.

...and while the report paints a rosy picture two items seem to be missed.

In using revenues to show growth in the "industry", I didn't see any adjustment for rate increases/inflation. Package volume would have been interesting to see.

the second is the growth in non-package revenue skews the growth unless they intended to include UPS auto logistics revenue in the package industry numbers!

And as e-commerce grows what is the impact on catalogue ordering? How much is new and how much cannabalized?

 

[wkmac]

batavia,
I too would like to see the actual package volume numbers but since we went public UPS rarely releases those numbers. Ah the old days!

As for non-package revenue, most of those elements didn't factor in until the last few years and in fact many were losing elements so there may have been a cancelling out or even a negative drain on revenues. Remember the stats. end with 1997' which is 5 years ago. Man time flys! But you make an excellent point in bringing up that part of the business for not only UPS but FedEx as well.

Generally speaking, I think this is an interesting study of the over all industry but barring a super economic growth cycle, the US market is pretty well covered. UPS and FedEx just reslicing the same pie right now with
FedEx taking some pie right off our plate. The real growth area and the chance to make major expansion efforts is on the international scene and UPS has done well to put itself in position to capitalize in this arena.

To echo P71, GO UPS!