FedEx Continues Rampage Against UPS In E-Commerce Parcel Space

United Parcel Service, Inc. UPS declared its fourth-quarter earnings Tuesday, which were in-line with analysts’ expectations. Donald Broughton from Avondale Partners was on CNBC recently to break down the numbers from UPS and opine on the competition it's facing from FedEx Corporation FDX for e-commerce market share.

Related Link: FedEx Follows UPS, Hikes Shipping Rates By 5%

Breaking Down The Numbers

Speaking on the earnings reported, Broughton stated, "There were no surprises in this, in that they had already announced a couple of weeks ago that they were not going to make the number," Broughton said.

"[I] was in the bottom of the range a couple of weeks ago and was rewarded for that lack of faith. And we were all looking for $1.45ish, and they indeed reported $1.25."

He continued, "You’ll remember that in the holiday of 2013, they had a brown out in service and UPS was very, very clear that they were going to spend whatever it took to make sure that didn’t get repeated in the holiday of 2014, and indeed that’s what happened. They spent a bunch and didn’t make very much."

Why Has FedEx Grown While UPS Remains Stagnant?

Broughton explained, "If you go back and look at what’s happened in e-commerce since '98-'99, we’ve seen a real surge in parcel volume. And UPS parcel volume is essentially flat with where it was back in '98-'99."

"All of the additional incremental e-commerce volume that’s been generated has essentially landed in FedEx’s lap, because let’s face it, if you are an e-commerce entrepreneur, you are yourself entrepreneurial and you identify with the company that is also entrepreneurial."