Page 23

CASE 2 The Battle for Value, 2016: FedEx Corp. versus United Parcel
Service, Inc.

2015 was a transformative year for FedEx with outstanding financial results, more powerful customer
solutions, and actions to generate increased long-term value for shareowners. We believe FedEx is on a
dynamic trajectory that will make 2016 very successful. Our company has never been better positioned to
build shareowner value.
—FedEx CEO Frederick W. Smith, Annual Report 2015

Our 2015 results demonstrate that UPS can thrive in [today’s] challenging environment, as shown by our
continued ability to meet the expectations of customers and investors alike. The continued execution of our
proven strategies will enable UPS to maintain positive momentum in the coming year and beyond.
—UPS CEO David Abney, Annual Report 2015

On April 29, 2016, FedEx Corp., the American courier delivery company, received final government approval
on its bid to acquire TNT Express (TNT), a Dutch logistics and delivery firm with road and air delivery
services all over the world, for $4.8 billion. Ever since FedEx made the public bid to acquire TNT, many
industry insiders expected TNT’s strong European road network to bolster FedEx’s presence in a region and
market in which it had failed to compete with its long-standing rival, United Parcel Service, Inc. (UPS), for a
bigger share of the world’s ever-increasing e-commerce shipments. Page 24
The approval came as a bitter blow to American package-delivery rival UPS, which had tried to
buy TNT in 2013, only to be blocked by European Union regulators who viewed the potential merger as
obstructing healthy competition. Still, UPS had plenty to celebrate. The company had just announced record first-
quarter sales of $14.4 billion, up 3.2% over the same quarter the previous year, driven by growth in both its
domestic and international small-package segments. The company was starting to see its recent investments in
technology and productivity improvements pay off, with its cost per package falling 1.9% for the same period.
This was impressive for a company whose return on equity the previous year was a whopping 210%.
Against this backdrop, industry observers wondered how the titanic struggle between FedEx and UPS would
develop, particularly for investors in the two firms. Was the performance of the companies in recent years
predictive of the future? International reach and extensive logistics services were widely seen as the litmus test
for corporate survival of delivery companies in the new millennium. Which company was better positioned to
attract the capital necessary to win this competitive battle?

United Parcel Service, Inc.

Founded in 1907, UPS was the largest package-delivery company in the world. Consolidated parcel delivery,
both on the ground and through the air, was the primary business of the company, although increasingly the
company offered more-specialized transportation and logistics services.
Known in the industry as “Big Brown,” UPS had its roots in Seattle, Washington, where 19-year-old Jim
Casey started a bicycle-messenger service called American Messenger Company. After merging with a rival
firm, Motorcycle Delivery Company, the company focused on department-store deliveries, and that remained true
until the 1940s. Renamed United Parcel Service of America, UPS started an air-delivery service in 1929 by
putting packages on commercial passenger planes. The company entered its strongest period of growth during the
post–World War II economic boom and, by 1975, UPS had reached a milestone when it promised package
delivery to every address in the continental United States. That same year the company expanded outside the
country with its first delivery to Ontario, Canada. The following year, UPS began service in West Germany with
120 of its trademark-brown delivery vans.
The key to the success of UPS, later headquartered in Atlanta, Georgia, was efficiency. According to
BusinessWeek, “Every route is timed down to the traffic light. Each vehicle was engineered to exacting
specifications. And the drivers . . . endure a daily routine calibrated down to the minute.”1 But this demand for
machinelike precision met with resistance by UPS’s heavily unionized labor force.
For most of the company’s history, UPS stock was owned solely by UPS’s managers, their families, former
employees, or charitable foundations owned by UPS. The company acted as the market maker with its own
shares, buying or selling shares at a fair market value determined by the board of directors each Page 25
2
quarter. By the end of the millennium, company executives determined that UPS needed the added
flexibility of publicly traded stock in order to pursue a more aggressive acquisition strategy.
In November 1999, UPS became a public company through a public equity offering and corporate
reorganization. Before this reorganization, the financially and operationally conservative company had been
perceived as slow and plodding. Although much larger than FedEx, UPS had been unable to effectively compete
directly in the overnight-delivery market, largely because of the enormous cost of building an air fleet. But after
going public, UPS initiated an aggressive series of acquisitions, beginning with a Miami-based freight carrier
operating in Latin America and a franchise-based chain of stores providing packing, shipping, and mail services
called Mail Boxes Etc. (later renamed The UPS Store) with more than 4,300 domestic and international
locations.
More assertive than ever before, the UPS of the new millennium was the product of extensive reengineering
efforts and a revitalized business focus. Whereas the company had traditionally been the industry’s low-cost
provider, UPS now began investing heavily in a full range of highly specialized business services. As a sign of
this shift, the company revamped its logo for the first time since 1961, emphasizing its activities in the wider
supply-chain industry. The expansive “What can brown do for you?” campaign was also launched around this
time to promote UPS’s business-facing logistics and supply-chain services.
Another example was UPS’s extensive push into more complex industries like health care. Health care
logistic services (which were bucketed into the company’s supply-chain and freight segments) allowed
pharmaceutical and medical-device companies to outsource their logistics to UPS pharmacists, who were able to
fulfill, pack, and ship customers’ orders from UPS’s worldwide health care warehouses, even when medications
included temperature specifications or required cross-border transport. By 2015, this segment had experienced
huge growth and saw no signs of slowing in the face of the world’s aging population that increasingly wanted
home delivery of health care products.
Alongside its health care offerings, UPS also looked to emerging markets for growth. In 2014, CEO David
Abney claimed that “growing internationally and diversifying our customer base”3 across regions was a top
priority for UPS. By 2015, international package operations accounted for 21% of revenues. Exhibit 2.1 presents
segment (ground and express) and geographic (international and U.S. domestic) revenue data for both FedEx and
UPS. The company also invested in information technology to improve its profitability. In 2013, for Page 26
example, UPS launched cutting-edge route-optimization software for its drivers that was intended to set
the stage for even more personalized service offerings and efficient deliveries when its rollout was complete in
2017.

EXHIBIT 2.1 | Revenues for FedEx and UPS by Business and Geography Segment (Millions)

*FedEx Services provides back-office support to FedEx’s three transportation segments and printing and retail support to
customers through FedEx Office.
Data source: Company SEC filings.

By 2015, UPS offered package-delivery services in more than 220 countries and territories (with every
address in the United States and Europe covered) and was moving more than 18 million packages and documents
through its network every day. Its immense volumes in the higher-margin ground segment and aligned assets that
served both ground and express shipments gave it a margin advantage compared to FedEx. UPS employed
440,000 people and had 104,926 vehicles and 650 jet aircraft.4 UPS reported revenues of $58 billion and net
profit of nearly $5 billion. Exhibit 2.2 provides recent operating results for UPS.

EXHIBIT 2.2 | Operating Results for UPS Inc. (period ending Dec. 31, in millions)
 *Economic Profit (EVA) is calculated as EBIT *(1 − t) − CofC × (T. Debt + T. St. Eq), where t = 40% and CofC = 8%.
Data source: Capital IQ, Morningstar, company annual reports.

FedEx Corporation
FedEx first took form as Fred Smith’s undergraduate term paper for a Yale University economics class. Smith’s
strategy dictated that FedEx would purchase the planes that it required to transport packages, whereas all other
competitors used the cargo space available on passenger airlines. In addition to using his own planes, Smith’s
key innovation was a hub-and-spoke distribution pattern, which permitted cheaper and faster service to more
locations than his competitors could offer. In 1971, Smith invested his $4 million inheritance and raised $91
million in venture capital to launch the firm—the largest venture-capital start-up at the time.
In 1973, on the first night of continuous operation, 389 FedEx employees delivered 186 packages overnight
to 25 U.S. cities. In those early years, FedEx, then known as Federal Express Corporation, experienced severe
losses, and Smith was nearly ousted from his chair position. By 1976, FedEx finally saw a modest profit of $3.6
million on an average daily volume of 19,000 packages. Through the rest of the 1970s, FedEx continued to grow
by expanding services, acquiring more trucks and aircraft, and raising capital. The formula was successful. In
1981, FedEx generated more revenue than any other U.S. air-delivery company.
By 1981, competition in the industry had started to rise. Emery Air Freight began to imitate FedEx’s hub
system and to acquire airplanes, and UPS began to move into the overnight air market. The United States Postal
Service (USPS) positioned its overnight letter at half the price of FedEx’s, but quality problems and FedEx’s
“absolutely positively overnight” ad campaign quelled that potential threat. In 1983, FedEx reached $1 billion in
revenues and seemed poised to own the market for express delivery.
During the 1990s, FedEx proved itself as an operational leader, even receiving the prestigious Malcolm
Baldrige National Quality Award from the president of the United States. FedEx was the first company ever to
win in the service category. Part of this success could be attributed to deregulation and to operational strategy,
but credit could also be given to FedEx’s philosophy of “People-Service-Profit,” which reflected its emphasis
on customer focus, total quality management, and employee participation. Extensive attitude surveying, a
promote-from-within policy, effective grievance procedures that sometimes resulted in a chat with Fred Smith
himself, and an emphasis on personal responsibility and initiative not only earned FedEx a reputation Page 27
as a great place to work, but also helped to keep the firm largely free of unions.
FedEx’s growth occurred within the context of fundamental change in the business environment. Deregulation
of the domestic airline industry after 1977 permitted larger planes to replace smaller ones, thereby permitting
FedEx to purchase several Bœing 727s starting in 1978, which helped reduce its unit costs. Deregulation of the
trucking industry also permitted FedEx to establish an integrated regional trucking system that lowered its unit
costs on short-haul trips, enabling the company to compete more effectively with UPS. Rising inflation and
global competitiveness compelled manufacturers to manage inventories more closely and to emulate the just-in-
time supply programs of the Japanese, creating a heightened demand for FedEx’s rapid and carefully monitored
movement of packages. And, finally, technological innovations enabled FedEx to achieve important advances in
customer ordering, package tracking, and process monitoring.
Despite making its name as the pioneer of the overnight-delivery market, FedEx continued to expand beyond
its lower-margin express offerings throughout the first decade of the 2000s. In addition to purchasing Kinko’s
1,200 retail stores and eventually rebranding them as FedEx Office (a full-service print-and-ship retail chain), in
2012, FedEx started to move its capex focus from its crown-jewel express segment (where capital expenditures
from 2013 to 2015 were mainly used to modernize its outdated fleet) to higher-margin ground services in order
to increase capacity in its U.S. ground network.5 By 2015, these efforts had paid off: FedEx Ground’s revenues
had grown significantly over the past five years, and the company was providing faster deliveries to more U.S
locations than its competition, in large part due to its industry-leading automation-optimized efficiency. The
ground segment’s independent operation of drivers and trucks as separate from its parallel express-network
assets, however, gave rival UPS and its integrated asset system the margin advantage.6
By the end of 2015, FedEx had net income of over $1 billion on revenues of about $48 billion. Exhibit 2.3
provides recent operating results for FedEx. FedEx Express’s aircraft fleet consisted of 647 aircraft, FedEx
Ground had about 95,000 ground vehicles and trailers, and FedEx Freight operated approximately 65,000
vehicles and trailers. The company operated with more than 325,000 team members and handled more than 11
million packages daily across its ground and express services.7

EXHIBIT 2.3 | Operating Results for FedEx Corp. (period ending May 31, in millions)
 *Economic Profit (EVA) is calculated as EBIT * (1 − t) − CofC x (T. Debt + T. St. Eq), where t = 40% and CofC = 8%.
Data source: Capital IQ, Morningstar, company annual reports.

The U.S. Delivery Market–Changing Shape

Barclays estimated the 2015 U.S. package delivery market to be $90 billion.8 The market was commonly
segmented along three dimensions: weight, mode of transit, and timeliness of service. The weight categories
consisted of letters (weighing 0−2.0 pounds), packages (2.0−150 pounds), and freight (over 151 Page 28
pounds). The mode of transit categories were air (i.e., express) and ground. Time categories were
overnight, deferred delivery (second-day delivery), three-day delivery, and, lastly, regular delivery, which
occurred four or more days after pickup.
The rise of e-commerce had created a colossal shift in package-delivery density, as low-density residential
deliveries from e-commerce sales had overtaken higher-density business-to-business package deliveries that had
once driven sales at the large shipping companies. As online retailers outpaced their brick-and-mortar peers, e-
commerce sales skyrocketed; in 2015 alone, e-commerce sales grew 14.6%, according to the U.S. Department of
Commerce.”9 Many believed that FedEx’s package volume was poised to benefit most from this growth due to
the numerous online retailers that employed FedEx for timely deliveries, but recently it was UPS that had the
upper hand, with market share of 54% for U.S. e-commerce shipments in 2014, leaving FedEx with 30%, and
USPS the remaining 16%.10
As the booming e-commerce market grew, many high-volume e-tailers, such as Amazon, commanded bigger
discounts from their shipping partners. In 2012, Amazon had launched Amazon Logistics, with its own delivery-
van network. A growing number of retailers, such as Wal-Mart and Amazon, were even starting to explore
unmanned aerial vehicles as a potential alternative means of delivery. By 2014, Amazon was upstaging its
private shipping vendors by offering Sunday delivery and same-day delivery service in various cities through the
USPS. As retailers looked for downstream solutions to managing deliveries, an expectation arose that the
delivery market, already polarized between high-value, next-day-guaranteed services and economy options,
could see the economy segment suffer at the expense of retailers’ own initiatives.11 Others expected shippers to
experience a potential shift in demand away from pricier express deliveries as consumers favored free shipping
on their online orders through ground service.

Competition
Amid these mixed expectations for future demand, a closer look at the industry’s 2015 revenues in the United
States revealed that the air-express segment’s revenues were fairly evenly split across FedEx and UPS, whereas
in the ground segment, UPS reaped the majority of sales. See Figure 2.1.

FIGURE 2.1 | U.S. package market revenue share (%), by segment—2015.

Data source: Brandon Oglenski, Eric Morgan, and Van Kegel, “North American Transportation and Shipping Equity Research,”
Barclays, May 2, 2016: 31.

Although higher-margin ground operations were attractive to shippers, complications in the segment arose
from the lower density of residential deliveries common among ground orders. To continue to grow their ground
operations without focusing on those low-density last-mile trips, both UPS and FedEx contracted USPS’s Parcel
Select Ground service, which helped businesses move shipments at the back end of their deliveries. Through the
service, the private companies delivered packages to the local post office, after which USPS handled Page 29
the last-mile drop-off. FedEx referred to this partnership with USPS, which launched in 2009, as
SmartPost, while UPS’s version, launched in 2011, was offered as SurePost, and the service allowed the
shipping companies to offer customers even cheaper pricing without wasting van and driver resources.
This similarity of execution on these partnered ground operations reflected the long-standing competition
between FedEx and UPS and their frequently parallel strategies. Exhibit 2.4 provides a detailed summary of the
major events marking the competitive rivalry between FedEx and UPS. Significant dimensions of this rivalry
included the following:
Customer focus. Both companies emphasized their focus on the customer. This meant listening carefully to the
customer’s needs, providing customized solutions rather than standardized products, and committing to service
relationships.
Pricing. The shipping rivals always moved in lockstep on parcel-pricing fees. In the face of e-commerce
retailers adopting the frequent use of large packages for lightweight products, however, the shippers who
priced parcels by weight alone started to take a margin hit when those poorly priced packages took up valuable
space in delivery trucks. In order to maximize the profitability of e-commerce deliveries, in May 2014, FedEx
announced that it would start using dimensional weight to calculate the billable price for all ground packages,
effective at the start of 2015. UPS quickly followed with the same announcement the following month.
Operational reengineering. Given the intense price competition, the reduction of unit costs became a priority.
Cost reduction was achieved through the exploitation of economies of scale, investment in technology, and
business-process reengineering, which sought to squeeze unnecessary steps and costs out of the service
process. Page 30
Information technology. Information management became central to the operations of both UPS and
FedEx. Every package handled by FedEx, for instance, was logged into COSMOS (Customer, Operations,
Service, Master Online System), which transmitted data from package movements, customer pickups, invoices,
and deliveries to a central database at the Memphis, Tennessee, headquarters. UPS relied on DIADs (Delivery
Information Acquisition Devices), which were handheld units that drivers used to scan package barcodes and
record customer signatures.
Service expansion. FedEx and UPS increasingly pecked at each other’s service offerings. In 2011, for
example, UPS launched MyChoice, which allowed customers to control the time of their deliveries online.
FedEx quickly followed suit in 2013, launching Delivery Manager, which allowed customers to schedule
dates, times, and locations of deliveries from their phones. FedEx even launched a repair shop for devices like
iPhones and Nooks in 2012, capitalizing on its retail space and existing shipping capabilities.
Logistics services. The largest shipping innovations entailed offering integrated logistics services to large
corporate clients. These services were aimed at providing total inventory control to customers, including
purchase orders, receipt of goods, order entry and warehousing, inventory accounting, shipping, and accounts
receivable. While this service line was initially developed as a model wherein the shippers stored, tracked,
and shipped across client’s brick-and-mortar stores, these services eventually expanded to include shipping
directly to consumers, as in the health care segment.

EXHIBIT 2.4 | Timeline of Selective Competitive Developments

 Data source: Google Finance, Morningstar, Value Line, and Capital IQ.

The impact of the fierce one-upmanship between FedEx and UPS was clearly reflected in their respective
investment expenditures. From 2010 to 2015, capital expenditures for FedEx and UPS increased by 54% and
71%, respectively. During this period, FedEx’s aggressive growth strategy, evident in its acquisitions and its
investment in the relatively outdated Express aircraft fleet, nearly doubled those of “Big Brown,” which
benefited from its more modern fleet.

International Package-Delivery Market

In 2015, the global parcel-shipping market was dominated by UPS, FedEx, and DHL, with international services
representing 22% and 28% of revenues for UPS and FedEx that year, respectively. FedEx made significant
investments in developing European delivery capabilities in the 1980s before eventually relinquishing its
European hub in 1992, causing it to rely on local partners to deliver to Europe for the ensuing decade. In 1995,
FedEx expanded its routes in Latin America and the Caribbean, and later introduced FedEx AsiaOne, a next-
business-day service between Asian countries and the United States via a hub in Subic Bay, Philippines.
UPS broke into the European market in earnest in 1988, with the acquisition of 10 European courier services.
To enhance its international delivery systems, UPS created a system that coded and tracked packages and
automatically billed customers for customs duties and taxes. In 2012, UPS expanded its European offerings by
purchasing Kiala, a European company that gave customers delivery options at nearby shops and gas Page 31
stations close to their homes, before replicating the service for UK customers the following year. By
2015, the company planned to double its investment in Europe to nearly $2 billion over five years.12
Much like the U.S. domestic market, the international package-delivery market of the first decade of the
2000s was given its greatest boost by the explosion of e-commerce. Compared to same-country online shopping,
cross-border shipping was only a fraction of global e-commerce spending in 2015, but it was the piece that was
growing most quickly, at an annual rate of over 25%.13 Websites like Amazon Marketplace and Etsy allowed
shoppers to purchase goods from sellers all over the world, while expecting an ease of shipping similar to that
provided by domestic retailers. As a result of this growing segment of online sales, FedEx, UPS, and others were
quickly adapting their service offerings to make cross-border shopping as smooth as possible. FedEx, for
example, purchased Bongo in 2014, later rebranded as FedEx Cross Border, which aimed to help retailers face
cross-border selling issues, including regulatory compliance and credit-card-fraud protection, while connecting
them to global consumers.

Performance Assessment
Virtually all interested observers—customers, suppliers, investors, and employees—watched the competitive
struggle between UPS and FedEx for hints about the next stage of the drama. The conventional wisdom was that
if a firm were operationally excellent, strong financial performance would follow. Indeed, FedEx had set a goal
of producing “superior financial returns,”14 while UPS targeted “a long-term competitive return.”15 Had the two
firms achieved their goals? Moreover, did the trends in financial performance suggest whether strong
performance could be achieved in the future? In pursuit of answers to those questions, the following exhibits
afford several possible avenues of analysis.

Financial Success
The success of the two companies could be evaluated based on a number of financial and market performance
measures. Exhibit 2.5 presents the share prices, earnings per share (EPS), and price–earnings ratios for the two
firms. Also included are the annual total return from holding each share (percentage gain in share price plus
dividend yield) and the economic value add, reflecting the value created or destroyed each year by deducting a
charge for capital from the firm’s net operating profit after taxes. Exhibits 2.2 and 2.3 present a variety of
analytical ratios computed from the financial statements of each firm. Page 32

EXHIBIT 2.5 | Financial and Market Performance

Data source: Google Finance, Morningstar, Value Line, and Capital IQ.

The thinking of the several securities analysts who followed FedEx and UPS in 2015 and 2016 reflected the
uncertainty surrounding the future performance for the two arch-rival shipping companies. Exhibits 2.6 and 2.7
contain excerpts from various equity research reports that indicate the analysts’ outlook held for UPS and FedEx.

EXHIBIT 2.6 | Recent Equity Analysts’ Outlook for UPS

1William Greene, Alexander Vecchio, and Diane Huang, “Greene/United Parcel Service—The Most Important Strategic
Question,” Morgan Stanley, No. 25356723 from Investext Current Reports database (accessed Feb. 3, 2017).
2Kelly Dougherty, Matt Frankel, and Cleo Zagrean, “UPS—It’s All about the Peak,” Macquarie Group, No. 27249020 from

Investext Current Reports database (accessed Feb. 3, 2017).

3Keith Schoonmaker, “UPS, Inc.,” Morningstar, No. 27249776 from Investext Current Reports database (accessed Feb. 3,

2017).
Source: Analyst reports from specified sources.

EXHIBIT 2.7 | Recent Equity Analysts’ Outlook for FedEx

 1Keith Schoonmaker, “FedEx Corp.,” Morningstar, No. 27901878 from Investext Current Reports database (accessed Feb. 3,
2017).
2Brandon Oglenski, Eric Morgan, and Van Kegel, “FedEx Corp–Some Holiday Cheer,” Barclay’s, No. 27771203 from Investext

Current Reports database (accessed Feb. 3, 2017).

3Kelly Dougherty, Matt Frankel, and Cleo Zagrean, “FedEx–Still the One,” Macquarie Group, No. 27761106 from Investext

Current Reports database (accessed Feb. 3, 2017).

Source: Analyst reports from specified sources.

Operational Success
Beyond their financial performance, the rival companies’ strengths and successes could also be examined using
various measures of operational excellence:
Marketing: In 2015, brand consultancy Interbrand’s annual ranking of top global brands ranked UPS at number
29 and FedEx at 86,16 representing little change from UPS’s rank of 27 and FedEx’s distant 92 for 2014. This
favoring of UPS reflected the payoffs of its full-service-promoting campaigns of the early years of the 2000s.
Employee satisfaction: Fortune magazine’s annual ranking of the world’s most-admired companies was based
on nine factors related to financial performance and corporate reputation, with four of those factors specifically
relating to HR attributes (quality of management, ability to attract and retain talented people, innovation, and
product and service quality). In 2015, Fortune awarded FedEx with the number 12 spot overall, with UPS
coming in at number 24. FedEx’s apparent excellence with regard to talent management was also reflected by
the Great Place to Work Institute, naming FedEx Express as one of the top global companies to work for for the
fourth year in a row.17 The more unionized UPS, where strikes were not uncommon, seemed to lag behind its
rival in its commitment to its employees.
Holiday performance: High-volume holiday-delivery performance was always seen as a strong test of a
shipping company’s effectiveness, and FedEx and UPS traditionally adopted different strategies approaching
the peak season. Despite the holidays of 2013 and 2014 favoring FedEx’s automation at its hubs, its
independent-contractor model (paying ground drivers by package rather than by hour) and practice of turning
down peak volumes based on quantities customers shipped during nonpeak months, by 2015, the tide had
turned. That year, UPS finally managed to prove its peak execution capabilities; its strategy of increasing
capacity to handle higher volumes allowed it to achieve an on-time-delivery rate nearing 98% the week before
Christmas. For the same period, FedEx struggled to handle a late surge of e-commerce shipments that were
delivered after the holiday (though the company wouldn’t provide numbers).18 Page 33
 Customer satisfaction: The American Customer Satisfaction Index (ACSI), the only national, cross-
industry measure of companies’ perceptions among consumers, ranked shipping companies each year based on
nearly 10,000 customers’ responses concerning ease of tracking, package condition on arrival, helpfulness of
in-store staff, and other factors related to recent delivery experiences. Until 2009, FedEx was ranked number
one, but the two shippers leveled out in recent years, and by 2014 and 2015, both UPS and FedEx remained
neck and neck, having identical ACSI scores of 82, well above USPS’s scores of 73 and 75 for the same years.
19

Outlook for FedEx and UPS

Observers of the air-express package-delivery industry pondered the recent performance of the two leading firms
and their prospects. What had been the impact of the intense competition between the two firms? Which firm was
doing better? The companies faced a watershed moment with the growth of e-commerce and FedEx’s aggressive
push into Europe. Might their past performance contain clues about the prospects for future competition?