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Couriers are basically a service for sending money or goods at some extra cost. It involves a
person or a company engaged in transporting, dispatching and distributing letters, parcels and
mails. In a rather layman term, it can be said that, compared to normal mail service, a courier
possess many added features. A courier is much faster, safer and secured than ordinary mail. It
is a specialized service with authenticated signatures. It has tracking service with each service
being treated as a specific individual case. Dedicated timely deliverance is its primary hallmark.
These features do cost a bit extra but with so many features available, the cost gets leveraged.

Indian courier industry has numerous huge and effective courier companies. In general a courier
company performs on various scales. To begin with, it can be inter-city and intra-city. From
there onwards, a courier company can work on regional, national and even international level.
The largest companies in express and logic industry are UPS, FedEx, and DHL to name a few.

Today the huge global companies have their own fleet of trucks and aircrafts solely for the
purpose of transporting the logistics whereas the mode of operation in cities is influenced by
bicycle and motorcycle. The transporting methodology involves truck owners operating in
tandem with the major logistics companies. They normally cover the defined routes.

As mentioned initially, courier service rates are slightly higher than the normal mail service. The
rates are generally decided by the weight of the package. The heavier the parcel is, the more the
charges are. To take an example, under the norm, there is a fixed charge for package weighing
in the range of 500 grams. For every additional weight, the rates increase. The tariff is more for
couriers which are intended for abroad. Many companies offer this service of courier to abroad.
This is done through air cargos which costs more.
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Mary Breckinridge is credited to pioneer the courier service. Back in First World War, she was
working in an American committee that used to deal by taking personnel into the service whose
primary job was to deliver the medical supplies and assisting the medical staffs in far flung
places. The official year for record was 1928 and the term given was courier. Sooner as was
expected, its popularity increased with changing time and mounting needs. By the end of Second
World War, when the need of the hour was urgent delivery of essential messages and
commodities, courier services witnessed many folded increase.

After Second World War, a plethora of courier companies have been launched worldwide. Courier
Company is primarily indulged in delivery of goods and mails to any place of the world. The
services offered by them are accessible almost all the time.

There are large numbers of courier companies in India. It can be segmented into organized,
semi-organized and unorganized categories. The organized sector players are quite large in
magnitude. These players often have best of speed and reliability. As the competition is heating
up, companies are offering specialized services including online tracking of the goods. In this
service a customer can check the route via which goods are being delivered and the exact
location of the thing in the specific time duration. Many large companies also offer multi-point
coordination and heat control facilities for the parcels.

The major players in Indian courier industry are DHL, Blue Dart, First Flight, Gati etc. Out of
these players DHL courier definitely has an edge over the competitors since its 68 percent
acquisition of another big player Blue Dart. Dhl is a huge brand name in courier industry not only
in Indian context but also world wide. It is right there on the top in services such as air
shipment, worldwide express and overland transport. Even in more specialized services such as
ocean shipment and contract related logistics, it is the number one. It has a synchronized
operating system. Its expertise lies in providing customized solutions to the customers. They
have a very potent combination of global reach and local knowledge. Whether, its express
document shipping managed through its wide-ranging network or entire aspect of supply chain
management; it has managed to carve its own niche in the courier and logistic industry.
The courier industry has some inherent fundamental courier service contract. The details of the
contract define about the few specifics including direction related to documents and materials,
Clear tariff structures for national and international transport as well. While hiring the courier
service, a consumer is supposed to sign a copy of the receipt which has terms of the contract
mentioned over it. It clears the terms and conditions for both the parties.


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Indian parcel courier market is estimated to be in the tune of 4000 crores and it has witnessed
an average yearly growth of 25%. Considering the fact that, market is expected to keep up the
growth and development momentum; many international players are betting big time on Indian
courier industry. This phenomenon has been manifested by the large interest shown by the
courier behemoths. This has also translated into huge investments in Indian express industry. In
terms of service, there is a lot to be done in the Indian market, but heartening factor is the
apparent set up of the process. As this industry is more about speedy delivery and the swift,
timely movement of merchandise, information and finances. Companies are synchronizing their
various processes so that integration of the system and technology can take place in accordance
with market demands. Courier work in India is revolutionizing the way Indian mail section used
to function. The industry is changing and it's changing for the better. Indian logistic industry is in
the stage of consolidation.

¦
 

1971:
Founder Fred Smith incorporates Federal Express.
1973:
From its hub airport in Memphis, Tennessee, FedEx begins service to twenty-five
U.S. cities.
1977:
Deregulation of airlines lets FedEx carry more cargo on larger planes.
1981:
FedEx introduces the overnight letter.
1984:
International operations start after the purchase of Gelco Express International.
1986:
FedEx introduces hand-held bar code scanners to track packages.
1989:
The ZapMail fax service, introduced in 1984, is shut down; FedEx expands its
overseas services with the purchase of Tiger International, parent company of
Flying Tigers.
1990:
FedEx wins the Malcolm Baldridge National Quality Award for its excellent
customer service.
1994:
The Federal Express Corporation officially changes its name to FedEx.
1998:
The purchase of Caliber System, Inc. increases FedEx's truck fleet.
2001:
Annual FedEx sales reach $20 billion, and the company carries packages to 210
countries.

 
 
 




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Federal Express Corporation (Fedex) was established in 1973. Since
then, Fedex had become a global logistics and supply chain
management. The company had invested heavily in information
technology systems. It had a powerful technical architecture that had
the potential to pioneer in Internet commerce. However, there are
some difficulties, the company¶s logistic and supply chain operations
have trouble to keep up the company¶s image, The transportation
volume growth was slowing down because the competitive industry
was too intense. In early 2000 The company announced major
reorganization within the entire Fedex family. Each five subsidiary
companies was to function independently but to compete collectively.

In order to analyze the situation carefully an external and internal

analysis of the company and industry must be done so a complete
picture of the industry could be understood.

External analysis:

Determinants of threat of new competitors:

The global express transportation and logistic industry has a very high
barrier to entry because it requires enormous capital resources,
economies of scale and brand identity. Large firms have a cost and
performance advantage in the industry. All of the established firms had
a very strong foothold in the global market as they have established
brand identities. There are economies of scale in the industry: firms
have to be big enough to provide services in many countries. Also
firms have to be big enough to achieve cost saving and to make profit.
It is extreemly hard or almost impossible for a new competitor to enter
the industry. Currently there is no substantial differentiation in
products and services among competing firms in the industry. All of
the firms provide similar service such as express, ground, logistics and
freight. Also there is no switching cost for individual customers in the
industry beside the fact that they might have to get new software for
their computers and the software are provided freely by the couriers.
Since it is not easy to enter the business of logistics and supply chain
in any country, the threat of new competitors is very low. However, in
the long term one should not generate the same conclusion because
the environment that the firm is operating in right now would be
changed. There are no absolute cost advantages in the industry
because companies basically are using the same technology for
tracking packages. New technologies adapted by one firm are easily
imitate by others because these firms have the same capability and
resources. Also, since the delivery and tracking methods are similar to
each other, it is difficult for one firm to have advantage over the
others.

Determinants of industry internal competitive rivalry:

Although all of the firms in the industry represent in many countries in

the world, the industry is still on the growth stage because not every
business out there is using express service. As the speed of business is
going faster, the need for express services will be realized and the
market share thus would be increased. Currently, including Fedex,
there are four players in the international courier, which held over
ninety percent of the world market. The other three players are DHL,
UPS and TNT. They all use web based package tracking system and
pick up parcel upon request. All of the players in the market are
almost the same size and had established a strong reputation in the
business so there is equality in competitive advantage among the
existing firms. All of the firms in the industry have a diversified
business that revolves around transportation and shipping.

Determinants of substitution threat:

Although the postal services in every country also provide express

service at a lower cost, the speed of these delivery is not that fast and
most don¶t have an up to date tracking system like that of Fedex or
the other three leading firms. This limitation is completely offset their
low price. The postal express service is mainly targeted to individual,
not businesses. Next day delivery is rarely heard from any postal
services. Therefore, Fedex still maintain its competitive advantage.
Fedex¶s customers are not likely to switch to a substitute of other
three firms or postal service anytime unless Fedex raise its price to an
unreasonable amount. There is no switching cost for individual
customers but the need of each segment is different so the postal
express service is not a threat to Fedex at any level.

Determinants of supplier power:

Fedex needs air and ground transportation vehicles for its delivery
services, maintenance services for these vehicles. Also, up to date
software for tracking device and electronics equipment that supporting
these software. All of the input that Fedex need could be easily
purchase from any suppliers in the market. Supplier does not possess
a lot of power since Fedex inputs are standard rather than unique or
differentiated. Fedex is a big firm and it always buy in high volume so
Fedex has the bargain power. Fedex could threaten to switch to
another supplier if current suppliers don¶t satisfy company¶s demand.

Determinants of buying power.

Currently, there are a large number of customers relative to the

number of firm in the business so customers don¶t have much choice
here. The large number of customers with relatively small purchase
minimized bargaining power of customers. The four firms in the
industry have a similar price for services, only postal service provides
a lower price. However, the speed of postal service is really slow so
the target customers of postal service would not be the same as Fedex
and the other big three

Value Chain:

Since Fedex is not in the manufacturing industry, its value chain is

somewhat different than a manufacturing company. Fedex does not
design and manufacture products instead it provides service to clients.
The linked set of activities and functions it perform internally will not
include sales. To increase its value chain, Fedex performs service for
its vehicle internally. This activities will increase the margin for the
company

Internal analysis:
Opportunities for Fedex:
Since Fedex is the biggest express-service company in the world, it set
the standard for the whole industry. Being the pioneer putting new
software into its business infrastructure will save a lot of money for the
company in the long term. Also, Fedex should always keep an eye on
information technology and try to adapt to the new emerging
technology because it would reduce the operating cost and make the
delivery business become more efficient.

Since each subsidiary operates independently and collectively compete

with each other, it will become more dynamic, more productive and
more efficient than ever before. Decentralization will give subsidiaries
more power to perform on its own. Therefore, Fedex could expand
Viking Freight so that it could compete on the international market.
This would be a big step to gain the global market share for the freight
business.
Threats:

Since Fedex is in the transportation business, a rise in fuel price could

affect the company tremendously. However, a rise in fuel price would
also affect the entire industry rather than Fedex alone. Customers
might switch to other alternatives in that case.

Another threat is that competitors might try to cut the price. However,
it is unlikely to happen because the other three firms don¶t want to
initiate a price war. No body will win in a price war. The postal express
service would become a threat only when they could really increase
the delivery speed equal to that of Fedex. This is very difficult to
achieve because postal service only operates within domestic market.
Strengths:

Fedex has many strengths. One is the established brand name. The
Fedex name is recognized globally. Its name mean reliable, fast
delivery service. The company also had a very strong foothold in the
every country. The company could capitalize on the name by diversify
the business into other area that is not transportation when it has the
capabilities and resources.

Weakness:

Since Fedex is a big corporation, customer responsiveness could be

slower than other organization. However, the company could
overcome this by investing heavily into research and marketing. One
of the mistake in the past is that the company had been ignore the
value of the brand. Customers need was not up where it supposed to
be when the company ignore the home delivery in the 90¶s.
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