Economics Final report

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					Importance and Effectiveness of International Courier Service in Bangladesh. A Comparative
Study on UPS, FedEx, TNT.



Chapter 1 – Introduction

1.1 Introduction

International courier services are a vital resource for many companies with global connections.
From getting vital legal documents through to lawyers or customers to shipping samples and
marketing materials, shipping items globally as fast as possible is something that a large number
of companies require.

For these reasons, International shipments can be quite expensive, especially when delivery time
sensitive consignments overseas.

There is a wide variety of options available from FedEx to DHL and UPS to TNT. All of these
providers offer a wide variety of services and costs. Some are stronger in some areas and weaker
in others. For example FedEx dominates in the United States however is sometimes viewed to be
weak in Europe. DHL however is often felt to be strong in Europe but not too good in the US.
TNT on the other hand is often felt to be too expensive to many areas.

There are literally many Courier Companies in the city of Dhaka. The annoy and activity of
everyday life in the city means that couriers are on the move 24 hours a day, 7 days a week. On
the face of it all courier companies may look the same. They offer the same services under a
different logo and corporate brand, but getting parcel from A to B is all that matters.

1.2 Objective

Our main objective of this study to find the effectiveness and efficiency of international courier
service and their activities regarding in Bangladesh. Among them, which company’s
performance is good.




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Importance and Effectiveness of International Courier Service in Bangladesh. A Comparative
Study on UPS, FedEx, TNT.



1.3 Methodology

The methodology study aim to assess the importance and effectiveness of international service in
Bangladesh. The data have been collected from both of primary and secondary sources. The
report is on UPS, TNT, Fed-Ex courier service. So there is some information taken from those
companies web site., also some information has taken from their annual report. The basic
information of the report is taken from their various department (UPS, TNT, Fed-Ex).In addition,
took some customers opinions.

1.4 Limitation

Due to the companies policy they do not agree to provide us the confedencial information. So
there is some limitation of this study. Overall we have tried to find out the answers through our
study.

Chapter 2 - Organization profile

2.2 UPS

                 Company Profile                           United Parcel Service, Inc.

                     Ticker                                            UPS

                   Exchanges                                          NYSE

                   2009 Sales                                    45,119,000,000

                 Major Industry                                  Transportation

                  Sub Industry                                 Freight Forwarders

                    Country                                    UNITED STATES

                   Employees                             408000(Total), 200(Bangladesh)



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Importance and Effectiveness of International Courier Service in Bangladesh. A Comparative
Study on UPS, FedEx, TNT.



United Parcel Service, Inc. The Group's principal activities are to provide specialized
transportation and logistics services and package delivery. The primary business of the Group is
the time-definite delivery of packages and documents throughout the United States and in over
200 other countries and territories. They believe that their integrated global network is the most
extensive in the industry. It is the only network that handles all levels of service (air, ground,
domestic, and international, commercial, residential) through one integrated pickup and delivery
service system. All packages are commingled throughout their journey through their network
except when necessary to meet their specific service commitments Domestic Package Products
and Services of the Group provide consignee billing, quantum view manage and delivery
confirmation services. Their strategy is to increase domestic revenue through cross-selling
services to their large and diverse customer base, to control costs through effective network
modification and limited expense growth, and to employ technology-driven efficiencies to
increase operating profit. As part of a technology revamp, UPS created the electronic clipboard
used by drivers to track packages and digitize signatures. Now a days, UPS is a global company
with one of the most recognized and admired brands in the world. They have become the world's
largest package delivery company and a leading global provider of specialized transportation and
logistics services. Every day, they manage the flow of goods, funds, and information in more
than 200 countries and territories worldwide. Founded in 1907 as a messenger company in the
United States, UPS has grown into a $49.7 billion corporation by clearly focusing on the goal of
enabling commerce around the globe. As the world's largest package delivery company and a
leading global provider of specialized transportation and logistics services, UPS continues to
develop the frontiers of logistics, supply chain management, and e-Commerce combining the
flows of goods, information, and funds. Their goal is to provide the customers with easy-to-use
products and services. They seek to streamline their shipment processing and integrate critical
transportation information into their own business processes, helping them create supply chain
efficiencies, better serve their customers and improve their cash flows. These products and
services support LTL and air freight shipments, as well as small package transportation. Get the
facts and figures about the world's largest package delivery company and one of the leading
global     providers     of     specialized     transportation     and      logistics    services.
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Importance and Effectiveness of International Courier Service in Bangladesh. A Comparative
Study on UPS, FedEx, TNT.



UPS offers a variety of technology solutions for automated shipping, visibility and billing. They
believe they have the most comprehensive suite of such services in the industry. They had
approximately 408,000 employees as of December 31, 2009, of which 340,000 are in the U.S.
and 68,000 are located internationally. UPS has received numerous businesses, technology,
diversity, community, and other prestigious accolades. USP have own 750 air curve and more
than thousand vehicles. UPS businesses have more than 220 countries.

2.2 FedEx

               Company profile                              Federal Express Corporation

        Financial Year 2009 Revenue                 $22.4 billion (includes FedEx Trade Networks)

                  Workforce                           More than 140,000 employees worldwide

            Average Daily Volume                     Approximately 3.4 million packages and 10
                                                              million pounds of freight

                 Service Area                          More than 220 countries and territories,
                                                     including every address in the United States

                Air Operations                        More than 375 airports served worldwide

                   Air Fleet                                         660 aircraft

                Delivery Fleet                        Approximately 42,000 motorized vehicles




FedEx is the world's largest express transportation company, providing fast and reliable delivery
to every U.S. address and to more than 220 countries and territories. FedEx uses a global air-and-
ground network to speed delivery of time-sensitive shipments, usually in one to two business
days with the delivery time guaranteed. FedEx has always looked at the world of commerce with
uncommon foresight. FedEx greatest strength has been their ability to deliver what the future

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Importance and Effectiveness of International Courier Service in Bangladesh. A Comparative
Study on UPS, FedEx, TNT.



requires. That should never change, even in times as difficult as the world faces today. FedEx
sees the long future.

FedEx Express was founded in 1971 as the Federal Express Corporation. It was originally
founded by Fred Smith in Little Rock, Arkansas in 1971. The company started overnight
operations on April 17, 1973.

Recent Awards

      University of Michigan America Customer Satisfaction Index: Number One in Customer
       Satisfaction, Express Delivery Industry (1998-2009)
      BLACK ENTERPRISE Magazine: “Top 40 Best Companies for Diversity” (2009).

2.3 TNT

                Company profile                           Thomas Nationwide Transport

                  Service Area                               more than 200 countries

                   Workforce                                     159,663 people

                   Revenues                                      €10,402 million

               Operating income                                   €648 million

            Net cash from operating                               €1,016 million




TNT is incorporated in the Netherlands and listed and traded on Europe next in Amsterdam
Their mission is to exceed its customers’ expectations in the transfer of their goods and
documents around the world. They delivers value to its clients by providing the most reliable and
efficient solutions through delivery networks. As a result they can fulfill their customer’s or
client’s expectation perfectly.

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Importance and Effectiveness of International Courier Service in Bangladesh. A Comparative
Study on UPS, FedEx, TNT.



TNT serves more than 200 countries and employs 159,663 people. Over 2009, TNT reported
€10,402 million in revenues, an operating income of €648 million and net cash from operating
activities of €1,016 million. The Board of Management, with the approval of the Supervisory
Board, sets the agenda for the group.

Their aims to lead the industry by:

1. Instilling pride in its people

2. Creating value for its shareholders, and

3. Sharing responsibility for the world in which it

TNT is in the business of transferring goods and documents around the world tailored to its
customers’ requirements with a focus on time-certain or day-certain pick-up and delivery. It is
TNT’s business to deliver the “business” of its customers at the right time and at the right place.




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Importance and Effectiveness of International Courier Service in Bangladesh. A Comparative
Study on UPS, FedEx, TNT.



Chapter 3 - Comparative study

We have made a comparative study on UPS, FedEx and TNT they both are well known
international parcel and Courier Company. They all provide same service to their customer.

On this study we work on their customer service, products and service offer to their customer,
rate or charge of their service, contribution to our economy, and creation of employment. If we
compare both of the company we saw that, they are very tough competitor of each other. The
comparison of the companies are given below.

Similarity         UPS                             FedEx                      TNT

Advertisement      Minimal advertising with        Aggressive advertising     maintain its strong
                   an old-fashioned twist          campaign                   global brand
                                                                              awareness




Air Shipment       Not with own aircraft           Not with own aircraft      Not with own
                                                                              aircraft

Number of          200                             300                        120
Employee in
Bangladesh


Network and        For remote area delivery,       Partnered with an          TNT also provide
distribution       UPS piggybacked on the          aggressive local           remote area
centre             operations of Sundarban         company to build a large   delivery with
                   courier service, a local        network of trucks and      Sundarban courier
                   courier company                 distribution centers       service



Customer Service 24 hours customer service         24 hours customer          Do not offer 24
                                                   service                    hours customer
                                                                              service



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Importance and Effectiveness of International Courier Service in Bangladesh. A Comparative
Study on UPS, FedEx, TNT.



Chapter 4 - Findings and Analysis

In UPS, they have two types of service. Air service (small package) door to door. Sea service
(large package)

UPS has no E-Shipping Service

In remote area where UPS has no branch office, Sundorbon courier service (local) does work on
behalf of UPS. But in this situation UPS does not take any extra charge to customer.

They focus on building and maintaining long-term customer relationships. Cross-selling small
package, supply chain and freight services across their customer base is an important growth
mechanism for UPS. For irregular and regular customer UPS always give updating new by e-
mail or phone call. And given any kind of new news for regular customer by e-mail.


The companies are subject to numerous other laws and regulations in connection with our non-
package businesses, including customs regulations, Food and Drug Administration regulation of
transportation of pharmaceuticals, and state and federal lending regulations.


In Bangladesh UPS have seven branches. There are Gulshan, Mirpur, Kawran Bazar, Gazipur,
Savar, Uttara and Chittagong (Agrabad).


In UPS there are no any sub offices. In rural area there is no any UPS customer care, so in there
many agencies try to share with UPS Company. But UPS does not agree with this. They only
delivered parcel to their customer not other hand.

The UPS Info Notice number enables to track shipment, confirm delivery, reschedule the
delivery date, and arrange to pick up shipment at a UPS Customer Center. On the other way TNT
and FedEx have also online tracking system.



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Importance and Effectiveness of International Courier Service in Bangladesh. A Comparative
Study on UPS, FedEx, TNT.



UPS communicate with customer by e-mail, any kind of information UPS give customer by net.
In UPS web site, they published a form e-mail customer fill up the form also give and take
information. But there is no SMS system in UPS. But in TNT customer can easily track and trace
their goods form cell phone.

UPS deliver parcel within 2-4 days. Door to door deliver within 24 hours. TNT and FedEx took
3-4 working days for delivery.

Rate selection depends on country zone.

All types of packet, there are no fixed size. UPS fixed the packets size (just for rate selection).
The maximum parcel size is 70 kg. Over 70 kg customer will pay extra money for per kg
(country zone base).

If parcel has been missing or late to deliver or any accident happened. UPS give only $100 for
charge to customer. But if customers have insurance of their goods they can claim it to the
insurance company. But TNT did not give any damage cost to its customer.

Because of limitation workforce this company cannot create much employment in Bangladesh.

These companies take cash payment from its customers and the customer is regular they provide
credit facilities.

People use these companies to send documents outside of the country.

Access shipment details and tracking data for up to 90 days. Use Shipping History to review,
track, and void customer previous shipments. Customer can also reship using the shipping
information from a previous.

They believe they have the most comprehensive integrated delivery and information services
portfolio of any carrier in Bangladesh.


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Importance and Effectiveness of International Courier Service in Bangladesh. A Comparative
Study on UPS, FedEx, TNT.



It is the only network that handles all levels of service (air, ground, domestic, and international,
commercial, residential) through a single pickup and delivery service system
They sophisticated engineering systems allow their optimizing their network efficiency and asset
utilization on a daily basis. This unique, integrated global business model creates consistent and
superior returns

FedEx and TNT have higher advantage than its closest competitor, United Parcel Service (UPS).
This means the company does better in strong markets (as it has for the last four years) and
worse in poor markets (as it did the three years before that.) To that effect, look at what has
happened to UPS while FedEx was sputtering. By comparison, UPS has been steady as it goes.

They all offer good customer service.

TNT offer special discount for student.




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Importance and Effectiveness of International Courier Service in Bangladesh. A Comparative
Study on UPS, FedEx, TNT.



Chapter 5 – SWOT Analysis

UPS

Strengths: UPS invested just a fraction of what FedEx had put into Asia. UPS emphasized
global network and stability creating an image “not American, but more worldwide.” Sought to
build relationships discreetly, on Bangladeshi terms.

Weaknesses: UPS lacked its own air service in Bangladesh, making them less logistically
versatile than FedEx. Unlike FedEx, TNT, UPS does not have many of its own trucks and drivers
in Bangladesh to build further brand recognition.

Opportunities: Like FedEx, UPS can build around its multinational customer base with
Bangladesh operations. UPS can pass on cheap cargo to target the more lucrative document and
small package market, since they do not need to fill an aircraft.

Threats: Like FedEx, TNT, shipping companies already well established in Bangladesh pose a
threat. While UPS contends it will add its own airplanes in Bangladesh when it becomes
necessary, by that time FedEx may already be far ahead in this area.

FedEx

Strengths: Aggressive advertising campaign. Highly controlled distribution system with
constant information about the status of shipments.

Weaknesses: Lack of personal relationship building within Bangladesh. In order to fill their
aircraft, FedEx is forced to take on many cheaper packages with very low profit margins.

Opportunities: Multinational corporations with Bangladeshi operations that already use FedEx
elsewhere. Customers who particularly value or require constant information regarding shipment
status


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Importance and Effectiveness of International Courier Service in Bangladesh. A Comparative
Study on UPS, FedEx, TNT.



Threats: Shipping companies already well established in Bangladesh. (DHL International Ltd.
holds more than 30% of Bangladeshi shipping market).

TNT

Strength: They are able to send visa after taking foreign ministry permission. They operate their
activities around 200 countries including Bangladesh. They give whole night operations
facilities. TNT’s revenue in the United States and invoiced in US dollar outside of the United
States is €113 million and TNT’s revenue in the United Kingdom is €1,284 million. Over 75000
employees worldwide. Own aircraft. TNT has eight branches of BD. Having special student
package. Good transit point.

Weakness: They don’t have any direct service in rural area. They send the goods in a long time
like 72 hour. Their service only Europe based.

Opportunities: Recently they give much emphasis on rural area service. They work hard for
their customer satisfaction. In 2009 they combined revenue 11.152 billion. Operating income
982 million.

Threats: The competitor of TNT give enough service which are as threats for them. They don’t
have any facilities in rural area but some of the competitors of TNT already have service in rural
area. For the shipment loss they give less amount of returns but the competitor give sufficient
returns.




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Importance and Effectiveness of International Courier Service in Bangladesh. A Comparative
Study on UPS, FedEx, TNT.



Chapter 6 - Conclusion and Recommendations

6.1 Conclusion

After doing this study we understand that international courier service is too much important and
essential for a country as well as Bangladesh. It has a great contribution on export-import and a
county economy. It creates employment for different qualification of people. There are many
international courier companies in Bangladesh. From this study we have able to know about their
different service and products. They are playing a vital role in Bangladesh’s economy. General
people and business persons are getting very good service form these companies. Although it has
some limitation, though they are operating there operations in Bangladesh and they are doing
well.

6.2 Recommendation

UPS

   •    Continue to focus on building relationships with multinational customer base as well as
        with new Bangladeshi customers.

   •    Eventually, UPS should consider launching its own air service to Bangladesh in order to
        keep up with FedEx and their logistical supremacy.

FedEx

   •    Continue to focus on multinational corporations already using FedEx. Outline benefits of
        using FedEx for intra-business shipping.

   •    Call on other Bangladeshi businesses to build relationships.         Expanding to these
        businesses is essential to support the large investment in Bangladesh.

   •    Sponsor local and national events.

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Importance and Effectiveness of International Courier Service in Bangladesh. A Comparative
Study on UPS, FedEx, TNT.



   •    Send representatives to Bangladesh to build personal relationships.

TNT

TNT’s service is mainly Europe based. If they expand their service into Asia it will be better for
them.

TNT should provide24 hours customer service.

They take much time to deliver goods. For this, they need to reduce time for delivery

They should provide direct service in remote areas.




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