Delivery Services. An Industry Report about the Corporate Finance Practices

Seminar paper from the year 2015 in the subject Business economics - Business Management, Corporate Governance, grade: 17, University of St Andrews (School of Management), language: English, abstract: The delivery service industry includes mail and package deliveries for commercial and consumer use by road, air and ship. This report will concentrate on the package and express delivery industry, since the conventional postal and letter business is declining and mostly operated by state-owned companies, which are hard to compare with private-owned companies.
Four large companies, FedEx, UPS, DHL and TNT, dominate the market in Europe and the United States. TNT is the smallest among those four. However, TNT is the market leader in two major European markets, UK and Italy. The market in the United States is highly dominated by FedEx and UPS, which almost create a duopoly. The largest player in Europe is DHL, which has 32% of the German market. Furthermore, DHL has around 40% in the Asian market and over 50% in overall central Europe, the Middle East and Africa (Economis, 2015 April 10). Therefore, this report will examine these four companies to generate an overall picture of the delivery service industry. The following SWOT analyses will give a general overview of the strengths, weaknesses, opportunities and threats of the industry.
Strengths:
- Record Growth: Due to structural changes in the transport routes and order quantities in the freight industry, the package and express delivery service are growing much faster than the total freight market.
- Dynamic and sustainable growth of the industry is decreasingly susceptible to economic changes, due to the integration of their services in the everyday live. More and more everyday goods like food and cloth are ordered online and get delivered to the customers' home.
- Increase of Efficiency: the transport of goods is getting faster and less costly due to highly efficient infrastructure.
Weaknesses
- Capacity constraint