A comparison study of customer satisfaction between the UPS and FedEx. An empirical study among university customers
| Date | 01 February 2006 |
| Pages | 182-199 |
| Published date | 01 February 2006 |
| DOI | https://doi.org/10.1108/02635570610649844 |
| Author | Bingguang Li,Michael W. Riley,Binshan Lin,Ershi Qi |
| Subject Matter | Economics,Information & knowledge management,Management science & operations |
A comparison study of customer
satisfaction between the UPS
and FedEx
An empirical study among university
customers
Bingguang Li
Department of Business Administration, Albany State University, Albany,
Georgia, USA
Michael W. Riley
Department of Industrial and Management Systems Engineering, University of
Nebraska-Lincoln, Lincoln, Nebraska, USA
Binshan Lin
Department of Management and Marketing, Louisiana State University in
Shreveport, Shreveport, Louisiana, USA, and
Ershi Qi
School of Management, Tinajin University, Tianjin, People’s Republic of China
Abstract
Purpose – The purpose of this research is to provide a comparison of customer satisfaction of two
largest US parcel delivery companies, the UPS and FedEx.
Design/methodology/approach – The paper is contrast the overall customer satisfaction and five
critical factors (availability, responsiveness, reliability, completeness, and professionalism of service)
that directly affect customer satisfaction for these two parcel delivery companies. Written
questionnaire responses from university departments/units in the USA were collected and used for the
comparison analysis. An independent samples t-test was used to compare the ratings of customer
satisfaction of these two parcel companies.
Findings – The paper find’s no significant differences in the ratings of service quality of that these
two parcel delivery companies provide with respect to both incoming and outgoing mail. The results of
this research suggest that the similarity in ratings of service quality of these two companies explain
their equally dominant positions in the parcel service industry.
Research limitations/implications – The survey subjects only include units/departments within
universities, with most of the participants located in Nebraska. By expanding the total number of
surveys to include more industries and locations, this research could provide additional insight into
the parcel service industry and customer satisfaction. Additionally, price of parcel delivery service was
not included as a factor impacting customer satisfaction. Price of service may play an important role in
customers’ selection of parcel carrier.
Originality/value – Findings of this research provide customers insights into the service quality of
parcel delivery companies in order for them to make a choice of which carriers to use.
Keywords Parcel deliveryservices, Customer satisfaction, Customerservices quality,
United States of America
Paper type Research paper
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0263-5577.htm
IMDS
106,2
182
Industrial Management & Data
Systems
Vol. 106 No. 2, 2006
pp. 182-199
qEmerald Group Publishing Limited
0263-5577
DOI 10.1108/02635570610649844
1. Introduction
Over the last decade, organizations of all types and sizes have increasingly realized the
importance of customer satisfaction. Customer satisfaction can lead to customer
loyalty, customer retention and business profits. It is widely understood that keeping
existing customers is far less costly than winning new ones. Consequently, customer
satisfaction has become one of the key operational goals of many organizations. Such
organizations have invested heavily in improving performance in customer
satisfaction (Bose, 2002; Cao et al., 2005; Xu et al., 2002).
In the information era, parcel delivery companies such as the United Parcel Service
(UPS), FedEx, United States Postal Service (USPS), and DHL, are the major carrier s for
the e-businesses. Customer satisfaction is the key factor for these carriers to compete
for customers. Also, from the perspective of customers, service quality is critical factor
to make the choice for their parcel carrier. The parcel service sector is a significant
component of the transportation industry. Yet, very little is known about the parcel
service industry (Morlok et al., 2000). This industry has increasingly gained attention
during the electronic-business era (Chien et al., 2002; Cho and Park, 2001; Ngudup et al.,
2005; Kodama, 2005). Electronic commerce has revolutionized not only the way goods
are sold, but also how these goods are delivered. Clients want customized products
delivered at a high speed with complete order flexibility and convenience. Gone are the
days when a merchant could simply state “allow six to eight weeks for delivery.”
Today’s online customers require instant order tracking from the moment they click
the “buy” button until the moment the package arrives on their doorstep. These
customers want to be able to reroute packages, determine delivery costs and
time-in-transit, and break up their orders to multiple shipping addresses. The shift of
power from the seller to consumer has created a new era of expectations. Consumers do
not tolerate experiences such as partial shipment of goods on an “installment” basis,
long shipping time, poor product return policies, or surprise back orders (Bayles, 2001;
Hsieh and Lin, 2004; Huang and Lin, 2005; King, 1998; Li et al., 2004). Consequently,
how to keep customer satisfied becomes a very important issue for parcel delivery
service.
According to their annual revenues, the UPS and FedEx are the two largest parcel
delivery companies in the USA. At the same time, these two companies are also major
rivals to each other. When customers make decisions of selecting the carrier to ship
their packages, some may choose the UPS, while others may choose the FedEx. Are
there any significant differences in the service quality between the UPS and FedEx?
This research provides a comparison of each critical factor that affects custome r
satisfaction and the overall customer satisfaction between the UPS and FedEx with
respect to both outgoing and incoming parcel delivery services.
2. Research design
Researchers suggest that there are ten dimensions of service quality (Parasuraman
et al., 1985). These dimensions are tangibles, reliability (REL), responsiveness (RES),
competence, courtesy, credibility, security, access, communication, and understanding
the customer. Attempts to measure these ten dimensions, however, reveal that
customers can only distinguish between five dimensions (Parasuraman et al., 1988).
This result suggests that the original ten dimensions overlap each other considerably.
The five dimensions of service quality that customers can recognize are tangibles,
Customer
satisfaction:
UPS vs FedEx
183
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