Publication Number: 3678

Report Title:  Express Delivery Services: Competitive Conditions Facing U.S.-based Firms in Foreign Markets

Investigation Number: 332-456

Author's name(s):  Russell Hillberry, Amanda Horan, Diane Manifold, Benjamin Randol, Heather Sykes, Michelle Vaca-Senecal, Michael Nunes, Joann Tortorice

Date Published: August 2006

Report Description/Introductory Text: The express delivery services study prepared by the U.S. International Trade Commission (USITC) examines the global industry, including factors such as competition, major market participants, trade barriers, and regulatory reform. The study was requested in response to concerns that foreign governments discriminate against U.S.-based firms with respect to conditions of market access and regulatory treatment. Competition among express delivery services suppliers in foreign markets, and how it may be affected by government-sanctioned monopolies, is examined. The USITC defined express delivery services as the expedited collection, transport, location tracking, and delivery of items, and related services, such as customs facilitation and logistics services.

The U.S. International Trade Commission found that demand for express delivery services is increasing rapidly as a result of electronic commerce growth, the globalization of business, and rising demand for outsourced logistic services. U.S.-based express delivery services providers increasingly compete with foreign postal firms. In such markets, competition may be impeded by anti-competitive monopolistic practices. U.S.- based express delivery services firms also face trade impediments in the form of operational restrictions, investment limitations, discriminatory access to essential facilities, and poor customs environments. Some of these trade impediments may be addressed by the General Agreement on Trade in Services (GATS). Bilateral and other multilateral free trade agreements may also serve to remedy such trade barriers.

The U.S. International Trade Commission quantified the effect of foreign customs procedures on global express delivery services. The analysis showed that poor customs environments impede time-sensitive international deliveries more than other international shipments, and that improved customs environments may increase the likelihood that a particular good would be shipped by air. Improved customs environments would likely result in increased U.S. exports, thereby benefitting U.S.-based express delivery providers.

The U.S. express delivery services industry comprises firms that provide expedited movement of documents, parcels, and other goods. These firms maintain control over the shipments throughout the delivery process and often monitor the location of each item. When items are shipped globally express delivery providers are involved in customs clearance procedures, including the payment of required duties and taxes. The four largest U.S.-based express delivery services firms are United Parcel Service (UPS), FedEx, Menlo Worldwide, and BAX Global. Major markets for U.S.- based express delivery services firms include France, Germany, Hong Kong (China), Japan, and the United Kingdom.

Topics Covered: express delivery services, market access, regulatory, impediments, trade barriers, global, GATS, UPS, FedEx

Countries: Argentina, Australia, Canada, China, France, Germany, Hong Kong, Japan, Netherlands, New Zealand, Norway, Sweden, Switzerland, United Kingdom

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