PARCEL, COURIER AND EXPRESS
SERVICES
Bilal Ahmadi
Introduction
• Current-day parcel delivery and courier services developed from a
need for small-shipment transport
• These services deliver documents, packages, and other small items
• An important distinction between parcel services and freight carriers
is that parcel carriers sell services to any customer who is willing to
pay, while the customers of the freight industry's common carriers are
generally businesses
• Delivery service companies have grown as customer requirements
have expanded
Introduction
• In U.S., three companies have emerged as the main delivery service
companies:
• Federal Express (FedEx) started as a parcel and courier delivery service with
14 small aircraft. The first day of business, FedEx delivered 186 packages
overnight. Since that time, it has expanded to an international business. It
offers same-day service by air and next day service by air or truck and
provides road and air freight transport services as well
• United Parcel Service (UPS) began by providing messenger and delivery
services and grew to be a parcel delivery service, including automatic daily
package pickup, multiple delivery attempts, and the return of undeliverable
packages. UPS has also expanded internationally, with same-day service by
air, next-day service by air or truck and road and air freight transport
• DHL began as a document shipping service and has expanded its business to
include parcel delivery. It limits its business to international shipping
Types of Carriers
• Parcel and express carriers use trucks and aircraft
• The major carriers have their own fleets for international deliveries
• Parcel carriers, couriers, and express companies provide similarly
priced services for individuals and businesses alike
• The major international carriers provide similar delivery options,
ranging from local to line-haul to long-distance (including
international) deliveries
• The cost for these services is generally based on parcel dimensions,
weight, and destination
Types of Carriers
• Parcel Carriers
• Parcel carriers are transportation specialists, operating both domestically and
internationally
• Carriers can perform pickup and delivery services for individual customers as well as
for businesses
• Parcel delivery service costs correspond to package dimensions, weight and
destination
• Express Services
• Express services have a guaranteed and predetermined delivery date and are distinct
from general air cargo due to special handling, pickup and delivery
• The cost to ship an express parcel depends on the destination as well as the parcel's
weight and dimensions
Operating and Service Characteristics
• Capability
• The types of shipments carried by the parcel carriers, couriers, and express services
are driven by the general public and their purchases
• Generally, these services handle conveyable (i.e., not palletized) shipments
• Cost Structure
• Variable costs fluctuate naturally with fuel and other maintenance costs
• Fixed costs include scales and other support equipment as well as shipping counters
in storefronts
• Capacity
• Load volume is controlled by whatever commodities are being shipped
• UPS and FedEx limit parcel sizes to a maximum of 274 centimeters long and 419
centimeters in girth, with standard parcel weights to a maximum between 32-34
kilograms
Parcel Measurements
Operating and Service Characteristics
• Speed
• Parcel carriers, couriers, and express services publicize their shipping speeds,
or the amount of time it will take from package pickup to delivery
• The larger carriers have built broad transportation networks to support the
delivery promises
• The smaller carriers make similar guarantees, as they are operating within a
limited network of known routes
• Accessibility/Flexibility
• These services are perhaps the most accessible carriers of all
• Some carriers provide intermodal service
Operating and Service Characteristics
• Environmental efficiency/efficacy
• UPS is actively involved with altering the way its vehicles are powered and
using alternative energy
• FedEx has a number of programs that support the environment through
the use of alternative fuels, carbon emission offsets through renewable
energy projects
• DHL runs a waste management program, partners with customers and
suppliers to support specific environmental objectives, and offers logistics
consultants to renewable energy suppliers
• Safety
• Workplace safety for carriers can be an issue
• In addition to environmental safety concerns, carriers may be subject to
effects from suspicious or poorly labeled packages
Issues and Challenges
• Speed
• Delivery speed is a large part of the business for parcel carriers, couriers, and
express services
• Packaging
• Customers must follow guidelines for packaging parcels
• Most carriers provide shipping envelopes and boxes to customers at no cost
or for a nominal fee
• Limited international competition
• At present, there are a number of international carriers that include parcel,
courier, and express shipments in their business
• Global companies need to be aware of the variety of challenges that exist in
cross-cultural shipping
Issues and Challenges
• Pricing
• Parcel carriers, couriers, and express services charge by each item instead of
by tonnage
• Customers can calculate shipping costs by using the carriers' website tools
• Payment and cash management
• Better customer service and cost savings can be realized through online
payment systems