United Parcel Service (NYSE:UPS) is the world’s largest small-package carrier, by revenue and by volume. UPS offers ground, air, and ocean freight shipping and shipping-related services. Every day, UPS ships approximately 15 million packages for businesses and individuals around the world. UPS aims to grow by increasing its coverage of global small-package markets and developing its auxiliary businesses.
UPS was founded in 1907 by 19 year-old Jim Casey as the American Messenger Company, a private messenger service employing local teenagers in Seattle. In 1913, the company moved from messages to packages, began using automobiles, and started making deliveries for retailers. Despite legal restrictions that it faced initially, UPS offered parcel delivery services between the 48 contiguous United States by 1975. In the 1980s, UPS began flying packages on its own airplanes to avoid the risk associated with relying on commercial airlines. UPS is now the 9th largest airline in the world.
In the 1990s, UPS launched online package tracking, the UPS Logistics Group, and UPS Capital, which offers customers financing for the supply chain purchases that they ship via UPS. These steps marked the beginning of UPS’s first efforts to expand its services beyond shipping, efforts that remain key to UPS’s growth strategy for the coming years. Today, UPS offers business customers supply-chain management, financing, and the option to incorporate UPS shipment data into their own IT systems. For individuals, more than 6,000 franchisee-owned UPS Store and Mail Boxes Etc. locations across the U.S. offer private mail box rentals, packaging supplies for purchase, and convenient drop-off locations for UPS shipments. These services are available in around 25 countries and include about 150,000 access points.
UPS has ample opportunity to grow in the international parcel shipping market. As a result of globalization, the global economy is expanding at roughly twice the rate of American GDP. Recently, UPS also acquired freight carrier and supply chain management businesses. Both have struggled to date but have the potential to contribute significantly to revenue growth if UPS can cross-market them to its parcel service customers.
the company has been recording lower growth rate recently
UPS includes packages up to 150 pounds, via air and ground delivery, as well as letters in its U.S. Domestic Package segment. UPS seeks to strengthen its position as the leader in U.S. Domestic shipping by reducing shipment times and expanding its related services—tracking, intra-company shipping for customers with multiple locations, and systems integration options that allow large customers to see UPS data on their own information systems. On 29 May 2008, UPS received a major boon to its core domestic package business. Deutsche Post's American subsidiary, DHL, decided to outsource its air operations to UPS. The arrangement is for 10 years and will add an additional $1 billion a year to UPS's revenues. 
UPS’s international package business offers parcel delivery between more than 200 countries and territories and domestic service within more than 20 countries besides the United States. Although UPS is geographically diversified in this segment, about 50% of revenue is related to shipping in Europe.
UPS reports earnings for its freight and supply chain management businesses together. UPS entered the logistics services and ground freight markets in earnest in 2004-2005 when it acquired Menlo Worldwide Forwarding and Overnite Transportation, leaders in those markets respectively. UPS Supply Chain Solutions offers integrated domestic and international transportation, customs brokerage, and supply chain management services including warehousing and financing. These businesses complement one another because they allow customers to store, import/export, and transport large quantities of material entirely through UPS.
UPS has 46-50% share in the U.S. domestic market, but more room to grow abroad, where markets are less mature. The U.S. domestic zxvczcvxzxcvxcvpackage market is expected to grow about 3% annually, tracking U.S. GDP. In contrast, the international market is expected to grow 5-6% annually in coming years, at nearly twice the rate of global GDP. Increased international trade not only boosts growth in less developed economies, but also results in increased demand for transportation services. Further, international markets are generally more fragmented than the U.S. market, offering more opportunities for large carriers like UPS to grow by acquisition.
Increased international trade in finished goods translates into more packages shipped longer distances. But the potential benefits of international trade for UPS are not limited to growth in the parcel carrier market. Many developed world businesses already purchase materials they use from abroad, and this practice, known as global sourcing, is on the rise. For businesses, the downside of global sourcing is complex supply chains that present previously unknown risks. For businesses facing import/export regulations and international transportation logistics for the first time, the appeal of outsourcing supply chain management is obvious. UPS Supply Chain Solutions hopes to capitalize on a projected increase in the market for third-party supply chain managers.
Fuel surcharges, which pass fuel costs on to customers, are standard practice in the transportation business. UPS calculates surcharges for a given period based on fuel prices six weeks earlier, absorbing some loss when prices increase sharply but making a profit on surcharges when prices fall. There is little reason to expect that this practice will change in the near future, despite the threat of increasing prices.
UPS's profits are highly cyclical; they depend on the strength of the U.S. and world economies because economic health is a key determinant of package volumes. Package volumes and economic strength are so tightly correlated that economists will study package volume data from companies like UPS as an indicator of whether economic activity is slowing or heating up.
UPS has three major competitors. The services offered between them are identical, though prices and availability in different regions vary.
Deutsche Post AG: A privately held company, Deutsche Post AG competes with UPS through its DHL operations. Overall, DHL-branded businesses account for more than half of the parent company's sales. However, most of Deutsche Post's sales come from outside its home country. Deutsche Post still handles the mail in Germany, delivering an average of 70 million letters per working day. In addition to traditional postal operations, the company provides mail process outsourcing at home and abroad. 
United States Postal Service: USPS is also not traded publicly. It is an independent government agency that relies on postage and fees to fund operations. USPS handles all kinds of mail and ships domestically and internationally. The USPS delivers more than 200 billion pieces of mail a year (at an average of more than 650 million per day) to some 150 million addresses in the US and its territories. Though it has a monopoly on delivering the mail, the USPS faces competition for services such as package or freight delivery.
FedEx (FDX): FedEx and UPS are close competitors in almost every way. FedEx offers every service offered by UPS, including freight services. FedEx Corporation provides transportation, e-commerce, and business services in the United States and internationally. It operates in four segments: FedEx Express, FedEx Ground, FedEx Freight, and FedEx Services. The FedEx Express segment offers various shipping services for the delivery of packages and freight. This segment also provides international trade services specializing in customs brokerage, and ocean and air cargo distribution; customs clearance services, as well as global trade data. However, the scale of operation between FedEx and UPS are different.