| Name | United Parcel Service |
| Industry | Logistics, Product Shipping & Receiving Industry |
| Founded | 1907 |
| Headquarters | Atlanta, Georgia, United States |
| CEO | Carol B. Tome |
| Revenue | $84.6 billion (2020) |
| Profit | $1.3. billion (2020) |
| Competitors | FedEx Logistics, C.H. Robinson, DHL Supply Chain, DB Schenker. |
Headquartered in Atlanta, Georgia, UPS, an abbreviation of United Parcel Service Inc., is a logistics, product shipping & receiving industry. The logistics services provided by UPS include customer brokerage, ground freight, transportation, contract logistics, air freight, distribution, ocean freight, financing and insurance. The company operates through three segments: Supply Chain & Freight Operations, U.S. domestic package operations and international package operations. The U.S. domestic package operations sector offers transportation services, while the international package operations include the small package operations in Latin America and Indian subcontinent, Europe, Middle East and Africa, Asia-Pacific and Canada. Lastly, the truckload brokerage, distribution, forwarding, and logistics is handled by the company’s supply chain & freight sector (CNN Business, 2016). Let’s go over the SWOT Analysis of the company.
Table of Contents
UPS Strengths 2021:
- Creating Brand Value and Market Reputation.
According to the rankings of Brand Finance (2021), UPS has held on to the top spot for 7 years straight as the most valued brand in the logistics and shipping industry.Since 2021, its brand value has seen an increase of 2%, making the total approximately $30.1 Billion. UPS has continued its lead over FedEx, whose brand value is significantly less, $23.5 Billion.
- Growing Geographical Presence.
UPS provides its services in a total of 220 countries. In 2019 the company enumerated 122 countries to its total of 57 countries. 20 markets of Europe, 72 of the Middle East and Africa, 2 of Asia Pacific and 28 of the Americas were included in the total countries UPS extends its services to (Douque, 2019). In all the world’s major economies, it has maintained an extensive and significant presence, adding to the effective services and facilities the brand offers to ship worldwide anywhere.
- Quick Deliveries and Effective Service.
On average, UPS product deliveries take up to one or two days. However, if a customer has placed an order on a business day, there is a high chance that the order is delivered the same day. The company further offers several options to customers such as overnight delivery, express delivery/shipping, same-day delivery, facilitating every kind of customer. (UPS, 2021a). The range of options to choose from gives every customer a chance to choose UPS, as it caters to all situations urgent or non-urgent basis. The effective and quick delivery services, therefore, ensure customer satisfaction and customer loyalty.
UPS Weaknesses 2021:
- Customer Satisfaction.
The company experienced a slight decrease in its customer satisfaction index, where it dropped from 81 in 2017 to 75 in 2021. Although this is not a sharp decrease, it makes the customer satisfaction index of UPS lower than its competitor FedEx (Mazareanu, 2021).
- Poor Employee Working Conditions.
Reports have published that the company failed to carry out basic Covid-19 health restrictions in employee working conditions during the pandemic. Due to this, the company had to face a lawsuit filed on 30th October 2020 by Desdnie Hess. In the lawsuit, it is prominently highlighted that SOPs were “repeatedly ignored”, which put employees’ health at a huge risk. The company also failed to provide necessities to employees during the pandemic, such as masks and hand sanitizers. UPS also did not properly sanitize the operational factories or parcels being delivered (Cappellino, 202). As the pandemic is an extremely significant issue, this lawsuit is all the more harmful for UPS as it damages its reputation significantly.
- Use of Traditional Equipment.
The company is still using its old equipment, which warrants upgrading based on the technological advancements of the 21st century.Equipment used by UPS is of the 20th century, making it difficult to keep up with the growing market in the 21st-century world. The company has delayed equipment upgrades because the latest equipment costs about $20 billion (Ziobro, 2018). Issues like these put the company in a negative light where it cannot provide advanced facilities to its customers.
UPS Opportunities 2021:
- Drone Testing.
UPS joined hands with DroneUp, UPS Flight Forward (UPSFF), Virginia’s Center for Innovative Technology (CIT), and Workhorse Group to begin drone testing for home deliveries (McNabb, 2020). Drone delivery gained a lot of attention in the preceding year of 2020. Further, UPS has acquired the 135-standard certification from Federal Aviation Administration as a license for its future drone delivery services (UPS, 2021b). Therefore, UPS has the opportunity to try and include this as one of its service offerings to gain more customers in the market. - CSR Related Activities.
Due to the backlash the company faced after the lawsuit (Ziaboro, 2018), it is necessary to build back on its reputation and show its target audience that they have learned from their mistakes. This could include providing free masks and hand sanitizers with deliveries or making generous donations to charities helping people during these tough times. Such actions will change the negative perspective of the target market regarding UPS and help in blurring this lawsuit from its customers’ memories.
UPS Threats 2021:
- Neck to Neck Competition.
DHL and FedEx are two companies that give UPS the most competition in this industry. Although UPS is in the lead, there is a slight possibility that FedEx could take over UPS in the coming years, given the use of advanced technology and its increasing efforts of coming on the top in the customer satisfaction index (Mazareanu, 2021). - Employee Strikes.
This threat is not as severe as of yet. However, observing the company’s irresponsible actions of not making the health of its employees an utmost priority during the pandemic could become a situation in the future. Any small scale or large-scale employee strike will create a bad impact on its image and lead to UPS losing millions of dollars as it will lose its customers.
UPS SWOT Analysis Conclusion:
It should be noticed that UPS has been in this market for a long time now and has managed to make a place for itself amongst intense competitors, such as FedEx and DHL. The company has achieved a top position against all its competitors by focusing on its main strengths and building on them. However, the company’s weaknesses, such as poor employee working conditions, have resulted in massive damages to the UPS brand reputation. Furthermore, the company could capitalize on opportunities such as indulging in more CSR related activities and introducing new innovations to gain customer attention. This will help minimize the threats presented to the company and help the company maintain its leadership position in the long run.
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References:
- CNN Business. (2016). United Parcel Service Inc. CNN.
- Brand Finance. (2021). UPS Delivers 7th Consecutive Year as World’s Most Valuable Logistics Brand. Brand Finance.
- Douque, R. (2019). UPS Triples International Destinations for U.S. Businesses with Expansion of Saturday Export Pick-Up Service. Global Newswire.
- Mazareanu, E. (2021). American customer satisfaction index scores for consumer shipping companies in the United States from 2017 to 2021. Statista.
- UPS. (2021a). Urgent and Same Day Delivery with UPS Express Critical. UPS.
- Cappellino, A. (2021). UPS Faces Class Action Alleging Unsafe COVID-19 Workplace Conditions. Expert Institute.
- Ziobro, P. (2018). UPS’s $20 Billion Problem: Operations Stuck in the 20th Century. The Wall Street Journal.
- McNabb, M. (2020). UPS Drone Delivery: DroneUp Flies to Prove the Case for Coronavirus Response. Drone Life.
- UPS. (2021b). UPS Flight Forward Drone Delivery. UPS
