Express Delivery Sector - Case Study Example

Express Delivery Sector Businesses today are looking for ways to speed up their operations so as to maximize their profits and enhance their competitiveness. This means that there is need for a reliable system of delivery of items needed to make these businesses successful. Efficiency in the delivery of personal items is also important and people are always on the lookout for the delivery companies that will deliver their items in the shortest, most reliable time (Crew and Kleindorfer, 2006). The express industry is at the front line in providing fast, guaranteed and reliably on demand delivery of cargo. The core business of the express sector has been described as “the provision of value added, door-to-door transport and deliveries of next-day or time definite shipments, including documents, parcels and merchandise goods” (MSI Marketing Research, 2005). In other words, the express industry fast tracks the time taken to transport goods from one point to another. In the UK, the main market players in the express services sector include: TNT, DHL, UPS and FedEx. According to a market review released in 2009, the UK express delivery market’s value is estimated to be at 5,150 pounds (Market and Business Development, 2009). This figure shows a marked improvement compared to the year 2008. Since the sector was introduced in the 1960s there has been a steady increase in service demand, a fact that has played a big role in the growth of the express delivery sector (European Conference of Ministers of Transport, 1996). The express industry is one of the sectors that are reporting some of the fastest growth rates in the world economy today. The sector employs about 1.25 million people directly and more than 2.65 million indirectly. There are many different industries across the world that need and make use of express services. These businesses include: manufacturing, business, pharmaceuticals as well as financial-based businesses (Crew and Kleindorfer, 2006). Major UK Express Service Providers 1. DHL International (UK) DHL International (UK) is one of the most well recognized express service companies that operate in the UK. The express operations carried out by DHL include: shipping, tracking, export and import services, domestic services and industry solutions. Long distance express services may be same day, time definite or day definite depending on the preference of the customer. As of 2009, DHL’s annual revenue was to the excess of 10.3 billion Euros, having carried out some 842 shipments that year. This is a remarkable figure for an express service company. DHL serves more than 8 million customers in the UK and in various other parts of the world. The company operates more than 4,500 facilities and uses approximately 62,000 vehicles for its express delivery services (Market and Business Development, 2009). 2. FedEx UK FedEx Express UK is the top express transportation company that operates through a network of transportation, business, information service and supply chain to access the ever expanding global market place. The company has over 275,000 employees in its branches in various parts of the world. It has an air fleet comprising of 684 aircraft and about 43,000 motorized vehicles. The company operates a global network of speedy delivery of time definite shipments to various parts of the UK. FedEx also offers express delivery services for UK residents who want to send packages out of the country (Crew and Kleindorfer, 2002). 3. TNT Express Worldwide (UK) TNT is one of the big four express delivery companies that operate within the United Kingdom. TNT offers both national and international express delivery services as well as industry solutions. Customers who need door to door same day delivery services can get them at TNT. Time and day definite delivery is also possible for items that have to be delivered over long distances. Industry solutions include supply chain operations which the company offers for industrial, technology, automotive and healthcare industries (Market and Business Development, 2009). 4. United Parcel Service (UPS) The United Parcel Service, Inc. is a package delivery company that also provides logistics, transport as well as financial services within the United Kingdom and internationally. The operations of the company are divided into three: domestic Package, Supply Chain ad Freight Services and International Package services. The domestic package services involve the time-definite delivery of packages, letters and documents within the UK. Operations in the international package segment include both air and ground delivery of parcels, letters and packages to areas outside the UK. The supply chain and freight operations focus on logistics and forwarding operations. The company also offers high end technology solutions for shipping services, billing as well as visibility. UPS has its own transport system comprising of cars, tractors, vans, motorcycles and aircraft which it uses in delivering items to differ parts of the UK and the world (Crew and Kleindorfer, 2002). Is the Sector Attractive to Compete in? The express services sector is one that has the potential of growing beyond imagination. In the UK, there are only a handful of companies that provide express services. These services are on high demand and this demand is likely to go even higher as businesses seek ways to make more profits through timely delivery of items (Crew and Kleindorfer, 2006). With this kind of high demand, it would be expected that the sector would be a offer a competitive environment for individuals and companies that would want to venture into the express delivery sector. However, there are a number of impediments to setting up a competitive business in this sector. The main problem lies with legislations that have to a great extent protected the existing market players, thereby creating a barrier for new entrants (Hawkins, 2009). The sector would be attractive to compete in if the playing filed was leveled in such a way that everyone had an equal opportunity to carry out business. The future looks promising and the sector continues to grow. The demand for express delivery services is on the increase and this means that more companies need to offer these kinds of services (Crew, 2010). Critical Success Factors 1. Development of the e-commerce market Many people have turned to online shopping, leading to the popularization of e-commerce businesses. Due to this new development, a new need for personalized delivery of goods has arisen. The express delivery sector has plays an important role in ensuring that customers who order for goods online get them right on time (Flower, 2008). 2. Production and distribution techniques Companies in the manufacturing industries have changed their productions and distribution techniques to suit the needs of the market. Goods are normally produced in small and easy to distribute packages. Many manufacturers in the UK do not have adequate transport systems for distribution of their products. The express delivery sector offers easy and efficient delivery of these products to customers from different parts of the country (Crew and Kleindorfer, 2006). 3. Outsourcing Most industries have resulted to outsourcing of delivery services of their products. In the UK, express delivery companies are normally contracted for the job of door to door and time definite deliveries of goods to different customers (European Conference of Ministers of Transport, 1996). 4. Economic situation For the last ten years, the express delivery sector in the UK has been growing tremendously mainly due to the conducive economic climate in the country (Campbell, 2001). Even when there was an economic meltdown between 2008 and 2009, the sector continued to grow, though at a much slower rate. The sector seems to be picking up after the economic troubles of 2008-2009 (Hawkins, 2009). Conclusion The Express Delivery Sector in the UK is one of the fastest growing business areas. The core business of the sector which is to reliably and timely deliver packages, parcels and documents is being sought after by companies aiming to enhance their competitiveness and profitability. Companies are not the only ones in need of express delivery services, individuals are also turning to thee services for delivery of personal items within and outside the UK. Although this is one of the fastest growing sectors in the UK, and indeed in the rest of the w0orld, there is considerably very little room for healthy competition. The sector is monopolized by a few big service providers who deliver parcels and packages in and outside the UK. Getting into this business is very hard because of the existing laws which create a barrier for new entrants. In the UK, it is especially difficult for new market entrants to compete at the same level as the big companies due to regulations that protect the operations of these companies. However, the situation seems like it will change as the sector continues to grow by leaps and bounds. More and more people are seeking express delivery services within the UK. The existing companies cannot all be able to serve the increasing number of people who are seeking delivery services. This vacuum can be filled by new companies who can start by offering basic express delivery services before they venture into more diverse services that will put them at per with the already established companies. There are various factors that have contributed to the success of express delivery companies in the UK. These factors which include: Development of the e-commerce market, production and distribution techniques, outsourcing and conducive economic situations have helped to catapult the express delivery sector into an important player in the country’s economy. These success factors have also drawn more people to the services offered in this sector. Efficient and timely delivery of packages, letters and other forms of parcels has enabled businesses to run smoothly. The sector has also played a big role in ensuring that global delivery of packages is aptly carried out. The efficiency with which delivery is achieved is possible due to the existing success factors, not only in the UK, but in other parts of the world as well. References Campbell, J.I. (2001). The Rise of Global Delivery Services: A Case Study in International Regulatory Reform. London: JCampbell Press Crew, M. A. (2010). Heightening Competition in the Postal and Delivery Sector. Cheltenham UK: Edward Elgar Publishing Crew, M.A and Kleindorfer, P.R. (2002). Postal and Delivery Services: Pricing, Productivity, Regulation and Strategy. New York: Springer. Crew, M.A.and Kleindorfer, P.R. (2006). Liberalization of the Postal and Delivery Sector. Cheltenham UK: Edward Elgar Publishing European Conference of Ministers of Transport. (1996). Express Delivery Services. London: OECD Publications Service Flower, D. (2008). Home Delivery Getting Smarter. Service Management. Oxford: Isleworth Hawkins, M. (2009). Ensuring a Swift Delivery. Nutraceutical Business and Technology. Vol.5, Iss. 1. Pp. 50-51 Market and Business Development. (2009). The UK Express Delivery Services Market Development. London: Market and Business Development Limited. MSI Marketing Research (2005). Express Delivery Services: UK. London: MSI Marketing Research for Industry Limited. Read More