Express Delivery Services Industry Overview

Excerpt from Express Delivery Services Report

The US express delivery services industry includes about 7,500 companies with combined annual revenue of about $80 billion. The industry is divided into two segments: large networked couriers capable of nationwide and international delivery, and smaller local services that transport packages within a metropolitan area. The courier segment of the industry is highly concentrated and accounts for most of the industry's revenue; United Parcel Service (UPS) and Federal Express (FedEx) dominate the market. The local segment, which is much smaller, is highly fragmented.

Competitive Landscape

Demand is driven by business transactions and online consumer spending. The profitability of individual companies depends on price, reliability, quality, and services. Large companies compete by offering a wide range of services. Small companies compete through specialized customer service. The industry is labor-intensive: average revenue per employee for networked couriers is about $140,000.

Products, Operations & Technology

The express delivery industry primarily transports parcels that are small enough to be handled by a single delivery person without the need for special equipment; this differentiates the segment from the freight shipping industry, which handles high volumes of large cargo and requires heavy, specialized equipment. Express delivery and pickup of parcels may be local, intercity, or international depending on the company's capabilities.