Express Delivery Sector - Essay Example

? Express Delivery Sector Executive Summary One of the key challenges of firms operating in the global market is to keep their competitiveness towards their rivals; the level at which each firm achieves the above target is differentiated. Current paper focuses on the performance of the express delivery sector as part of the wider freight and transport industry; reference is made to the ability of the specific sector to secure its competitiveness but also on the critical success factors (CSFs) which drive the performance of firms operating in the above sector. The performance of the transportation sector – as the broader area in which the express delivery sector operates – has been examined; it is assumed that the specific sector is quite competitive – for this reason it would be appropriately managed in order to increase its attractiveness towards the potential investors. The use of the appropriate CSFs would help the firms of this sector to keep their competitiveness at high levels, despite the market turbulences. 1. Structure of the ‘express delivery sector’ within the wider freight and transportation industry – evaluation whether this is an attractive sector to compete in. In order to understand the position and the performance of the ‘express delivery sector’ within the freight industry, it would be necessary to refer to the characteristics and the performance of this industry – as presented in the relevant literature. The freight industry is an extremely powerful sector; often, the practices of this sector are criticized as of their opposition with the international or the local legal rules. An indicative example of such case is the violation by the truck manufacturers of the anti-trust laws – reference is made to Britain. Such cases, related to ‘air cargo carriers and freight forwarders’ (Handy Shipping Guide 2010), have been developed in Britain. Despite the problems related to its activities, the freight industry is an extremely powerful sector, having the power, if appropriately monitored, to support the growth the economy. In accordance with a series of statistics published in 2007, ‘the amount of freight lifted in 2007 (1,869 million tonnes) was three per cent above 2006 (1,813 million tonnes)’ (Department of Transport 2007). In other words, the industry has managed to stabilize its growth – despite the global crisis. The above fact is highlighted in a relevant report of the European Commission; in the above report emphasis is given on the increase of the ‘EU countries who invested on road freight transport in 2005-2007’ (European Commission 2008) .The potential of the industry to keep its competitiveness at high levels should be taken into consideration when the performance of the express delivery sector – as part of the freight sector need to be measured and evaluated. Moreover, the competitiveness of the freight industry would also lead to the increase of the competitiveness of the express delivery sector; therefore, the evaluation of the attractiveness of the industry would influence the attractiveness of the express delivery sector. Indeed, the trend for continuous growth in the freight industry seems to reflect a relevant trend in regard to the express delivery sector. The above view is based on a report referring to the importance of the express delivery sector for the economy of East Midlands; it is noted that ‘The express industry directly employs over 4,700 people in the East Midlands; Its contribution to regional employment is expected to rise to almost 16,000 by 2014’ (Oxford Economic Forecast, 2006). The Institute of Transport Management presents a similar view– published in 2007; in the relevant report it is sated that the express delivery sector is expected to benefit the British economy by approximately 5 billion each year – reference is made to a long term period, of approximately 20 years. On the other hand, Thompson (2007) notes that the performance of the freight sector is depended on indicators which are not standardized; for instance, oil prices tend to change continuously leading to the differentiation of the transportation costs; similar problems exist in the express delivery sector. Despite the problem highlighted above, the freight industry remains a highly competitive sector; the express delivery sector, as part of this industry, also presents a continuous growth; this growth is expected to last for quite a long period of time, taking into consideration the level of involvement of the freight industry - and the express delivery industry – in daily human activities. In accordance with the above, it is suggested that the express delivery sector keeps its competitiveness and its attractiveness towards potential investors. 2.Identification of the ‘critical success factors’, which drive performance in the sector now and in the near future In order to understand the performance of the express delivery sector – both now and in the near future – it would be necessary to refer to the critical success factors used for measuring the performance of businesses in various industrial sectors. Different methods are suggested in the literature for identifying and evaluating the critical success factors for modern organizations. The understanding of these methods requires the presentation of the framework of critical success factors. In accordance with Ordys et al. (2007) the critical success factors are ‘the limited number of factors that determine the competitiveness of an industrial process’s operational performance and the quality of its process outputs’ (Ordys et al 2007, p.15). In other words, the critical success factors are used for identifying and evaluating the organizational performance – both in terms of time and of quality of the products/ services involved. A similar view is developed in the study of Mard (2004) where it is explained that the term ‘critical success factors’ is used in order to describe those organizational areas that need to perform high in order for the organization to keep its competitiveness towards its rivals; in other words, critical success factors can guarantee the competitiveness of an organization within its industry (Axson 2010). Regarding the role of CSFs within the organization, Parmenter (2009) states that CSFs can offer a series of advantages/ benefits, like, for instance, the awareness of managers on the priorities of the organization and the limitation of the volume of reports across the organization (Parmenter 2009). On the other hand, Stiffler (2006) notes that the measurement of performance of organizations should not, necessarily, be based on common theoretical models and frameworks; sometimes, innovation is required in order to guarantee the competitive advantage of the organization towards its rivals. Having in mind the issues developed above, the, current, critical success factors of the express delivery sector could be summarized as follows: ‘a) handle the continuous increase of demand, b) reduce the cost, as possible and c) monitor the performance’ (Konings et al. 2008, p.228). However, because of the complexity of the transport sector – reference is made to the different modes of this sector, i.e. the transport through ‘the air, the sea and the road’ (OECD 2002, p.57), the identification of the sector’s critical success factors would be a challenging task – for the express delivery sector a similar assumption should be made, as the specific sector is part of the transportation sector. In this context, the CSFs of the express delivery sector would be set after measuring the performance of each particular modes – as explained above (OECD 2002). In accordance with the above, the CSFs of the express delivery sector would be depended on specific terms – in addition, compared to the view of Konings et al. (2008), as presented above: a) the price of fuels worldwide, b) the national and local legislation in regard to the particular sector and c) the potential effects of the organization on the environment, as these effects would negatively influence the relationship between the organization and the local (community) or the governmental authorities. In the near future, the CSFs of the express delivery sector would remain the same, apart from the following difference: high emphasis will be given on the value of sustainability as a criterion for developing strategic organizational decisions. The above perspective can be identified in the criteria currently used by the International Road Transport Union; the above Union has set three priorities in regard to sustainable development: ‘road safety, energy savings, environmental protection’ (OECD 2003, p.50). These priorities will be extensively used in the future for developing the strategic plans of firms operating in the express delivery sector. Conclusion The identification of the CSFs related to one or more organizational activities is necessary in order for these activities to be effectively developed; however, the tools through which CSFs are identified and evaluated are not standardized. Rather, they are depended on the organizational culture and the resources available; also, the beliefs of organizational leader are of high importance for the identification of CSFs in modern organizations. In any case, the express delivery sector is part of the transportation sector; this means that any change in the performance or the practices of the latter will influence the former – even if the level of the relevant interaction is not clear yet. By defining the CSFs of the express delivery sector, the managers of firms in this sector would secure the ability of the sector to face the market pressures and to achieve a continuous growth – even if the achievement of such target would take a long period of time. (Words 1365 - the executive summary is not included) References Allaz, C. (2005) History of Air Cargo and Airmail from the 18th Century. Google Consultant Axson, D. 2010. Best Practices in Planning and Performance Management: Radically Rethinking Management for a Volatile World. Hoboken, NJ: John Wiley and Sons Konings, J., Priemus, H., Nijkamp, P. 2008. The future of intermodal freight transport: operations, design and policy. Edward Elgar Publishing Mard, M. 2004. Driving your company's value: strategic benchmarking for value. Hoboken, NJ: John Wiley and Sons OECD. 2003. Safe & sustainable transport: a matter of quality assurance. OECD Publishing OECD. 2002. Benchmarking Intermodal Freight Transport. OECD Publishing Ordys, A., Uduehi, D.,Johnson, M., Thornhill, N. 2007. Process control performance assessment: from theory to implementation. New York: Springer Parliament: House of Commons: Transport Committee (2008) Freight transport: eighth report of session 2007-08: report, together with formal minutes, oral and written evidence. London: ?he Stationery Office Parmenter, D. 2009. Key Performance Indicators: Developing, Implementing, and Using Winning KPIs. Hoboken, NJ: John Wiley and Sons Sokol, D. (2003) Express Delivery and the Postal Sector in the Context of Public Sector Anti-Competitive Practices. Northwestern Journal of International Law & Business, 23, pp. 353-382 Stiffler, M. 2006. Performance: creating the performance-driven organization. Hoboken, NJ: John Wiley and Sons Online Sources Another Scandal Affecting The Freight Industry - Now It's Truck Manufacturers. 16 September 2010. Handing Shipping Guide, [online] Available at: [Accessed 26 February 2011] Bloomberg, TOP 30-DAY COMPANY IN THE TRANSPORTATION INDUSTRY, [online] Available at: [Accessed 26 February 2011] Department for Transport, Freight statistics, Britain, [online] Available at: [Accessed 26 February 2011] European Commission, Eurostat, [online] Available at: [Accessed 26 February 2011] Oxford Economic Forecasting (2006) The Importance of the Express Delivery Industry for the East Midlands Economy, [online] Available at: http://www.emda.org.uk/uploaddocuments/eastmidlandsexpressreport130106.pdf [Accessed 26 February 2011] The institute of Transport Management, [online] Available at: [Accessed 26 February 2011] Thompson, J. (2007) The Freight Industry Outlook Looks Flat-Lined Well Into 2008 - Normal Cycle, Adjustment Or? [online] Available at: [Accessed 26 February 2011] Read More