Strength of the Brown in Freight Market
Aaron B. Taylor
United Parcel Service (UPS) has been in the package delivery service for many years. Starting as an messenger service by two teens has grown to a world-wide company delivering packages world-wide. Over the last years UPS has expanded their operations from just package delivery to also freight. To continue grow and compete in multiple markets UPS should work to grow strong in the freight delivery market. There are things to consider in the ever expansion into the freight market. Considerations should include the risks, costs, politics or acceptance by investors and the public. These issues are among the many ...view middle of the document...
The cost to take on a new market for a company like UPS can be big and requires much initial investment. Whether that includes expansion of current facilities to help accommodate the additions. Acquisition of other companies that specialize in the market and then marketing costs to keep and gain a customer base. The cost of acquisition of Overnite Transportation and its subsidiary Motor Cargo cost $1.25 billion. This is among the many cost that UPS had to endure but has been worth it and would be a strong competitor,
The politics of moving from just a package delivery service or air freight service comes with some battles within. Not all of the leaders probably supportive of the move to a trailer freight company. There are the worries the costs and the risks that come with it. Good planning by management will help show investors those benefits of moving into a new market. With acquisition of Overnite the spokesman for UPS Norman Black stated “the LTL industry had become attractive due to the increasing economic and strategic attractiveness of the sector”. Surely expansion brought some disagreements by those in many of the other divisions in the company. However expansion into the freight market will propel UPS into the world market even more making them strong against companies like FEDEX, Swift and JB Hunt.
UPS move to the freight market it was not too difficult...