Confused About FedEx SmartPost, UPS SurePost and Other Deferred Residential Parcel Options?
FedEx SmartPost has been the fastest-growing service segment within FedEx in recent years, doubling and even tripling year-over-year volume growth over its ground unit. SmartPost has achieved an aggregate volume increase of 69 percent since fiscal year (FY) 2010. At nearly 533 million packages delivered in 2013, SmartPost volume was just under half of FedEx Ground's FY 2013 package volume of just over 1 billion packages. Revenue growth at SmartPost has been equally impressive. At nearly $1 billion in revenue in FY 2013, SmartPost has achieved 92.5 percent revenue growth since 2010.
As UPS financial statements combine multiple service categories, I'm not able to report on specific SurePost growth. However, the UPS annual report for 2012 includes several instances in which the company discusses the rapid growth of the product.
An interesting side note regarding UPS SurePost is the significance the product played during recent UPS/Teamsters contract talks. Since UPS SurePost packages are aggregated and inducted for USPS postal carrier delivery, Teamster negotiators view SurePost with extreme caution since it could have a negative impact on union labor. Simply put, it takes packages away from union drivers and puts those packages in the hands of USPS postal carriers.
Rob Martinez is the CEO of Shipware LLC, a professional services firm that transforms businesses through intelligent distribution solutions and strategies. Rob has helped some of the world’s most recognizable brands reduce parcel shipping costs an average of 25 percent through contract negotiations, rate benchmarking, modal optimization, invoice audit and other savings vehicles. A cum laude graduate of UCLA, Rob has 20 years of transportation industry experience, including executive positions at DHL and Stamps.com, in addition to his work as an outside consultant since 2001.