Why UPS’ Higher Margins Can Make You a Profit - Motley Fool
Shipping and logistics is a business where capital intensity and network size really matters. The world's largest parcel delivery company, United Parcel Service, is showing its biggest two competitors, FedEx and DHL, why its business structure generates higher margins, and thus superior profitability.
To sum it up, the factors that make UPS a great investment case and an amazing company to hold for long-term investment are its greater package volume, concentration on high-margin ground shipping, and use of a single network rather than parallel air and ground operations.
However, its competitors should not be underestimated, as they hold a good position and well-established brands as well.
Shipping and logistics is a business where capital intensity and network size really matters. The world's largest parcel delivery company, United Parcel Service, is showing its biggest two competitors, FedEx and DHL, why its business structure generates higher margins, and thus superior profitability.
To sum it up, the factors that make UPS a great investment case and an amazing company to hold for long-term investment are its greater package volume, concentration on high-margin ground shipping, and use of a single network rather than parallel air and ground operations.
However, its competitors should not be underestimated, as they hold a good position and well-established brands as well.
