Federal Express

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which only carry cargo, have fleets of planes, usually fly at night, have ground transportation, and personnel for door-to-door pick-up and delivery. The “all cargo” companies control 90% of the domestic cargo companies.
Competition in the “all cargo” segment of the industry includes: UPS, DHL, Airborne Express and U.S. Postal Service. The entire industry delivers roughly 5.6 million packages each day. FedEx currently has a 45 – 50 % market share and thus delivers 2.8 million packages each day.
Customers tend to be loyal to a reliable company. For example, FedEx believes that customers will choose the more reliable of available shipping companies, even if that company is more expensive than the competition. Their success is evidence of this.
There is a high barrier to entry in this industry. The tremendous infrastructure necessary to compete with the likes of FedEx keeps out potential new entrants.
In the market segment where packages can be picked-up as late as 9:00 ...

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packages had to be carried by additional airlines before reaching their final destination.
Smith’s idea for Federal Express was a concept of a hub-and-spokes system for distributing the daily haul of packages from around the country. Packages could be picked up from around the country, flown to a central sorting point, sorted by destination city, reloaded on planes and then flown in reverse.
From early on Smith has been quite the visionary. In 1972 Smith offered the following on Federal Express, “This company is nothing short of being the logistics arm of a whole new society that is building up in our economy – a society that isn’t built around automobile and steel production, but is ...

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