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Package Delivery Essay, Research Paper

Package Delivery:

Changes in the industry due to technology

Joseph P. Satterthwaite

Introduction

The air transport industry encompasses flights of common carriers, certified cargo and passenger services offered to the public, and general aviation, which caters to private aircraft used for recreation or business. The industry supports a wide range of businesses and borne from it were package delivery services.

Origin and Development

In 1910, the air transport industry was established in Germany when regular air service in dirigibles provided service between European cities. Passenger services grew faster in Europe than in the United States primarily because of World War I (1914-1918).

While the ground transport services in the States were based on the railroad, many of the roads and railroad capabilities in Europe were devastated from bombings. That result and the advent of the war airplane made the industrialized European nations take note. The war also proved the military value of airplanes and sparked a dramatic acceleration in its production. By the wars end, small, miniscule commercial air carriers took advantage of the ruined European ground transportation system and the large surplus of aircraft and pilots.

Air service within Europe flourished and by 1930, government-sponsored airlines operated well beyond Europe to numerous European colonies in the Middle East, Africa, Asia and Latin America.

Since the United States suffered none of the devastation that afflicted Europe, trains were the fast, reliable and comfortable ground service that Americans enjoyed. Air travel was still uncomfortable and hadn t flourished in the States as in Europe. In 1914, the first scheduled air flight for businessmen took place but as the winter tour season ended, so did the commercial venture in Florida.

The government decision to transport U.S. mail by aircraft kept the air travel industry alive here. Originally, the government used its own pilots and aircraft. The 1925 Kelly Act, a contract that solicits bids from the private sector for airmail, and the 1926 Air Commerce Act, which allows the government to regulate commercial aviation, were key to changing the development of U.S. commercial aviation in the private sector.

Numerous technological advances were made between World War I and eventually World War II (1939-1945). Navigation and radio communications were greatly improved. These improvements by the 1930s significantly contributed to advances for aviation. Now radio signals from fixed locations guided pilots to their destinations in darkness or poor visibility conditions. Flight lines and routes for air travel were marked. Engineers made numerous advances in design producing air-cooled engines and better cockpit indicators.

WWII had an enormous impact on aviation and aircraft production increased dramatically during the war. Airlines for the first time had more business than it could handle. Design in aircraft increased size, speed, distance and also amenities for passenger travel.

The transition

U.S. mail contracts were the primary source of revenue for airlines in the 1920s and 1930s. Freight also moved by plane during this time, in the Great Lakes region where Ford automotive plants flew parts between assembly plants.

With engineering feats and the infancy of larger aircraft, larger freight items where capable of being flown because of large aircraft lifting capabilities. Airfreight then becomes a major business after WWII with the spread of international air service. Today, as in the late 1930s, a major share of high-value shipments such as jewelry, small parts and valued items are still carried by cargo aircraft. While expense to companies is at a higher cost, the offset to companies is the savings in inventory costs, damage, theft and speed at which they meet supply and demands of the marketplace.

Two Giants UPS and FEDEX

United Parcel Service, UPS, is by all standards the largest package-delivery company in the world. While it has owned a considerable portion of this market since 1919 through merger and innovation, it maintains its edge in the marketplace by continually adapting its resources to new technologies to make it more efficient.

Federal Express, FEDEX, on the other hand, a giant in its own right, emerged in 1973 from the ideas of a Yale University student, who noted the need for a private airfreight system to concentrate solely on delivering shipments.

Originally, UPS dominated the market, delivering small items and clothing to a major department store network. It expanded eventually and extended its operations through a New York City headquarters. By 1950, UPS served stores in 16 metropolitan areas. But as people started to migrate towards the suburbs in the late 1940s, UPS began losing business. As a result, its owner Jim Casey, who started the company, decided to concentrate on door-to-door pickup and delivery of small parcels (less than 50 pounds) from any customer, residential or commercial. This placed it in direct competition with the U.S. Postal Service. Its revenue, from 1964 to 1969, more than doubled and by 1975, it serviced the entire continental United States.

In the late 1970s and early 1980s, FEDEX now matured from being just another company with a fleet of 16 aircraft began to slice into UPS wealth by specializing in overnight deliveries. FEDEX in its fist 26 months of operation lost $29 million dollars but rebounded in 1979, to earn profits in excess of $21.4 million.

UPS didn t wait long to counter FEDEX and began offering a similar air-delivery service in the early 1980s. UPS also took a move-forward approach and invested heavily in technology and aircraft gradually increasing its share of the express-delivery market.

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