FedEx has consciously avoided residential delivery business in its operations management and this has provided an opportunity for UPS to lead in this business segment.
To offset this impact, FedEx could set up online collaborations with e-businesses such as Amazon and e-bay, providing transportation of goods to consumers dealing with these e-businesses. This is aligned with FedEx's plan of focusing more with business-to-consumer e-tailing.
Being able to utilize and collaborate with established e-businesses and reach out to new segments of customers, will increase revenues and will assist FedEx to associate brand with famous websites, and will increase the online shopping. Collaborations with these businesses will also provide a stable revenue stream.
The main challenge on operations is from the market competitors.
UPS is the market leader for residential delivery service. Unlike FedEx, UPS outsourced their information systems development by forming strategic alliances with Open Market, Inc., IBM and Lotus (UPS, 2007).
DHL's express service links 120,000 destinations in more than 220 countries and territories with 500,000 employees. DHL is well known for their cheaper costs, the ability to offer freight and package shipping service worldwide, to areas such as Iraq and Burma (DHL, 2007).
TNT is mainly based in Europe, providing services such as postal delivery in the Netherlands and express post worldwide. TNT serves more than 200 countries and employs around 127,000 people. The company employs 48,000 employees worldwide and has a fleet of 43 aircraft and operates over 19,000 road vehicles (TNT, 2007).
With increasing competition, innovation in logistics management and transportation has become essential to maintain a competitive advantage. Companies that are able to innovate to enhance their supply chain management and transportation will be able to enjoy having the first mover advantage as this industry is a market driving industry. Through its innovative software, FedEx has...