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Available testing of shipping services

Americans rely on shipping companies for an array of needs, from mailing letters and documents to shipping freight across the country or overseas. For the purposes of this report, we chose to focus on ordinary shipments of documents and packages. In order to evaluate the major companies involved in these shipments, we turned to Unishippers.com and Consumer Reports, both of which compare shipping companies by testing the speed and cost of delivery of similar packages. The Georgia Tech Supply Chain Logistics Institute also conducts an annual study by shipping packages to obscure international locations. The 2007 study, however, proved to be more informative than the 2008 study because many of the packages shipped in 2008 were never delivered due to the severe obscurity of their destinations. We also found numerous online forums in which consumers discuss their experiences with various shipping companies, but comments are all over the board and each company seems to receive an equal share of both praise and complaints.

DHL, a major player in the U.S. shipping industry, has been noted by experts for its reliability, especially with international deliveries, and for its lower prices. The company, however, announced early in November 2008 that they would be shutting down U.S. operations due to mounting losses since 2004. DHL will still deliver international shipments to and from the United States.

Experts say that this is a major blow to American consumers who will lose out due to the loss of the competition that DHL provides. Gerry Hempstead, a shipping consultant and former DHL executive, told Supply Chain Digest that "DHL sets the benchmark for the bottom thresholds of pricing. There are deals out there that FedEx and UPS just would not handle at the price DHL offers." Already, all of the major shipping competitors have links on their home pages designed to capture DHL's remaining market share.

While competition may decline due to the loss of DHL, the United States Postal Service (USPS) plans to be more competitive in an effort to increase its 32 percent market share, which is barely holding compared to that of UPS at 31 percent and FedEx at 25 percent, according to BloggingStocks.com. The postal service is upping its game by offering lower rates for large- and medium-volume shippers as well as providing parcel return services to companies who wish to offer prepaid return shipping to customers.

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