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  • Shipping Wars Case Study

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    This document discusses the shipping strategies of Amazon, FedEx, and UPS. It explains that shipping is important for e-commerce because it affects customer satisfaction. Amazon uses its own transportation network to control logistics, while FedEx focuses on expanding markets and evaluating each shipment. UPS expands its private fleet to reduce reliance on others. The document analyzes whether FedEx will succeed in expanding its ground shipping by integrating it with air shipping, noting it could realize efficiencies but also faces new complexities to manage.

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    This document discusses the shipping strategies of Amazon, FedEx, and UPS. It explains that shipping is important for e-commerce because it affects customer satisfaction. Amazon uses its own transportation network to control logistics, while FedEx focuses on expanding markets and evaluating each shipment. UPS expands its private fleet to reduce reliance on others. The document analyzes whether FedEx will succeed in expanding its ground shipping by integrating it with air shipping, noting it could realize efficiencies but also faces new complexities to manage.

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    © All Rights Reserved
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    63 views2 pages

    Shipping Wars Case Study

    Uploaded by

    Ngọc Nè
    This document discusses the shipping strategies of Amazon, FedEx, and UPS. It explains that shipping is important for e-commerce because it affects customer satisfaction. Amazon uses its own transportation network to control logistics, while FedEx focuses on expanding markets and evaluating each shipment. UPS expands its private fleet to reduce reliance on others. The document analyzes whether FedEx will succeed in expanding its ground shipping by integrating it with air shipping, noting it could realize efficiencies but also faces new complexities to manage.

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    © All Rights Reserved
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    Chapter 3 Information Systems, Organizations, and Strategy 127

    also relying more on the U.S. Postal Service, especially that increasing the volume of short-haul deliveries
    for Sunday deliveries. FedEx is now delivering on its will generate the kind of returns FedEx is seeking.
    own about 2 million packages per day that it had for­ Which company will win the retail shipping wars?
    merly handed to the U.S. Postal Service for last-mile The outcome could determine the future direction of
    delivery. By handling an increased volume of pack­ the entire e-commerce retail industry.
    ages on its own, FedEx believes it can make better
    use of its more than 600 sorting and delivery facilities Sources: Bloomberg, "FedEx Has a Plan to Battle Amazon Shipping,
    around the United States to help retailers with ship­ CEO Says,• January 30, 2020; Greg Petro, 'Amazon Versus FedEx:
    The Retail Shipping Wars,• Fbrbes, June 28, 2019; and Shep Hyken,
    ments from stores to residences. However, analysts "Look Out FedEx and UPS-Is Amazon Going to Disrupt the
    such as Morgan Stanley's Ravi Shanker are not sure Shipping Industry? Fbrbes, January 17, 2019.

    CASE STUDY QUESTIONS


    1. Why is shipping so important for e-commerce? 3. Will FedEx succeed in its push into ground ship­
    Explain your answer. ping? Why or why not?
    2. Compare the shipping strategies of Amazon,
    FedEx, and UPS? How are they related to each
    company's business model?

    1. Shipping is important for e-commerce because it affects customer satisfaction, loyalty, and profitability. The case
    explains that customers expect fast, low cost and often free shipping, and that shipping is the first point of physical
    contact with online purchases.

    2. The shipping strategies of Amazon, FedEx, and UPS differ in the following ways:
    - Amazon uses its own transportation network for most of its shipments, bypassing port delays and controlling the
    logistics and distribution process.
    - FedEx has a comprehensive shipping strategy that includes evaluating the product, packaging, service,
    destination, urgency, and frequency of the shipment. FedEx also focuses on expanding in international markets,
    e-commerce, healthcare, and small businesses.
    - UPS expands its private fleet of trucks to reduce or eliminate its reliance on other carriers. This allows UPS to
    become more profitable and control the customer experience.

    3. FedEx's push into ground shipping could be successful, but it also faces challenges. The web page context
    mentions that FedEx plans to integrate FedEx Ground with FedEx Express to create a fully integrated air-ground
    network. This could lead to cost savings and operational efficiencies. However, it also adds new complexities to its
    long-term operational overhaul. The success of this strategy will depend on how well FedEx manages these
    complexities and adapts to changes in the market.

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