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United Parcel Service

United Parcel Service (NYSE: UPS), a.k.a. UPS delivers packages and letters all over the world. It was founded in 1907 and is headquartered in Atlanta, GA.

Company Description

What company operates a fleet of over 100,000 trucks, vans, cars, motorcycles, and quite possibly rickshaws, as well as a fleet of over 600 airplanes (that's a bigger fleet than Delta (NYSE: DAL))?

UPS is the world's largest package-delivery company, counted by market cap, number of employees, or number of packages delivered. It operates in over 200 countries world-wide, handling pickup and delivery of approximately 4 billion packages annually. That's almost 16 million per day. These range from envelopes to large pieces of freight. Time can be as little as overnight to several days. Considering the logistics involved, that's quite a feat. It's dark brown with golden lettering vehicles are instantly recognizable. It competes with FedEx.

It makes money by charging a fee for each delivery, either a flat fee or one based on weight. The fees increase as the time requested for delivery get shorter, with overnight, early morning delivery being the most expensive.

In 2001, it acquired Mailboxes, Etc. and rebranded it as The UPS Store, offering simple copying services, along with sales of packaging material, mailbox rental, fax services, and shipping services at locations in many retail malls. In response, FedEx purchased the copy and office services chain Kinko's and rebranded it as FedEx Kinko's.

Because it is a transportation business, it's profitability can be tied to the price of oil. When oil prices rise faster than the company can pass along the costs to its customers, profitability declines. In the spring and summer of 2008 as oil and fuel prices peaked, this was seen in declines of year-over-year profit numbers, whereas for several years, year-over-year declines were few and far between.

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