Parcel Pricing Firm In Wake of Consolidation

Commenting on a recent industry conference, equity research analyst Stifel Nicholaus reported UPS and FedEx dominate the ground parcel market with 65% and 18% market share, respectively. DHL is improving service since upgrading its Wilmington, Ohio hub. On-time performance has improved, according to David Ross and John Larkin, analysts for Stifel Nicholaus. DHL’s parent Deutsche Post World Net (DPWN) has deep pockets and is determined to make DHL a viable alternative in North America, according to the analysts. The U.S. Postal Service (USPS) is “unable to compete effectively due to its status as a government agency,” they commented. “This little competition, with high barriers to entry, means pricing remains firmly in the hands of the carriers, and shippers should expect package rates to go up every year.”

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