United Parcel Services -- A Global Rebound Play

Discussion in 'The Latest UPS Headlines' started by cheryl, Jun 22, 2010.

  1. cheryl

    cheryl I started this. Staff Member

    United Parcel Services -- A Global Rebound Play - Guru Focus

    Think about it -- when you want to send a package, what services immediately leap to mind? I can think of four: The Post Office, FedEx (FDX), UPS (UPS), and DHL Express. As far as international carriers go, and certainly with domestic ones, that's all there is as far as holding significantmarket share.

    The competition that does exist is essentially a commodity, and customers will really only examine three things when deciding which carrier to choose: price, service, and reliability. Prices vary wildly depending on the size and weight of the package, distance to travel and level of haste desired. I know from personal experience that I always check all four services for price. When it comes to service, however, the price has to be a tremendous bargain for me to set foot in the post office, with its understaffed counters and long lines. Time is money to everyone, after all. That's probably the reason why the Post Office is losing money hand over fist.

    When it comes to picking between these companies for an investment, my favorite is UPS. One thing UPS has going for it is a global brand name, and that power must never be underestimated. The company came to the marketing game later than FedEx, so it's had to play catch up. But UPS' signature ubiquitous brown trucks and "What Can Brown Do For You?" campaign have helped the company surge, along with the then-largest IPO ever in 1999, which significantly raised its profile.