Economic Justification for the Rapid Growth of Premium Package Services

Subject: Company Analysis
Pages: 2
Words: 300
Reading time:
< 1 min

FedEx (Federal Express) in 1973 initiated overnight delivery via flights by a cargo aircraft. At first, Memphis served as a central collection point for sorting the packages. From this central location, the packages were later delivered to their different destinations. These delivery missions were done overnight such that by the end of the following day package had got to the destined receiving point. Initial delivery missions targeted light packages but later have broadened their services to include heavier loads. In addition, competition has thrived with more firms plying the trade and seeking to establish a niche in the market. Such a firm is like the UPS. These advanced delivery firms target to reduce the delivery time while eyeing the business clients. In the United States of America, delivery firms have offered competitive and attractive packages to lure more clients to their side.

Premium package services prices variation such as Express Mail facility tailor pricing for overnight delivery missions such that proximate clients enjoy lowered prices compared to those in a remote location. Clients that purchase delivery online for their Express Mail got discounted prices. The same applied to those holding venture group accounts. Active clients that have maintained the loyalty of staying within or above the quarterly volume levels have been rewarded with discounted prices. Providing speedy delivery missions yet at a fairly lower price, such as the Priority Mail facility offers discounted rates to clients who meet certain potage criteria. Providing relief incentives on economies of scale for bulk missions for door-to-door deliveries in the case of the Parcel Select facility. Facilitating reverse logistics for clients making deliveries back to businesses will be priced according to weight measurement for their loads being delivered in the case of the Parcel Return Service facility.