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Business and Revenue Model of Courier Service Provider Like FedEx or Delhivery

written by Admin | Aug 10, 2021
Business and Revenue model of Courier Service provider like FedEx or Delhivery 

FedEx and Delhivery are two well-celebrated courier delivery services providers in the world. These companies work with a promise to deliver your parcel from one place to another in a single piece. Now in the internet world, the international courier delivery market has experienced growth at light speed, and the growth seems to continue in the next few years.

According to the research of the Market Watch website, the global courier service market size is expected to reach USD 433480 million by the year 2025, from USD 333900 million. 

Furthermore, the increased inclination towards online shopping through various portals such as Amazon is also boosting the market growth of courier services. 

Due to the ongoing Covid-19 outbreak, many countries are shutting down international and national trade. Therefore, the growth of courier service companies is significantly lower depending on the current measures of the country. But still, the market is promising and helping the people associate with it to make revenue. 

This article will help you understand the business and revenue model of the courier service provider like FedEx and Delhivery alongside what the future holds for the courier service providing business. 

So, with no further ado, let’s scroll down to get your hands on the following information. 

Know Courier Service Providers- FedEx & Delhivery

Here, we have given a brief introduction to FedEx and Delhivery. 

FedEx

FedEx is one of the leading multinational courier service providers. FedEx, or earlier known as Federal Express was laid in the year 1961. The company provides courier services to industries, including transportation, eCommerce, and several others. FedEx gained popularity by providing high-value services across more than 220+ countries. 

>>>Also Read: How to Make a Courier App for Courier Delivery & Tracking Services <<<

FedEx employees with a team of more than 600k employees and deliver more than 15 million shipments daily. 

Delhivery

Delhivery is a company founded in 2011 in India. The company is well known for its eCommerce ventures. It is equipped with the latest infrastructure and resources to manage all the needs of its consumers. Delhivery was started with a team of 150 employees, now it has grown to more than 40000+ employees. 

Delhivery provides several courier services such as same-day delivery, next-day delivery, and so on. The company processes more than 1.5 million shipments daily.

Understand the Business Model of Courier Service Providers

There are ample business models available to benefit the courier service providers in the market. With time, different business models also evolve to add value to the courier service provider apps. 

Both FedEx and Delhivery are courier service provider companies that work with a single aim to assist their customers with all their logistics needs. However, their way of fulling customer’s needs is way distinct. That’s why we have concluded their business model separately below.

Business Model of FedEx

FedEx, or earlier known as Federal Express was laid in the year 1961. The company provides courier services to industries, including transportation, eCommerce, and several others. FedEx gained popularity by providing high-value services across more than 220+ countries. 

FedEx managed to dominate the courier delivery market by sticking to its promise of speedy delivery with 99% reliability. To stay with this promise, FedEx depends upon its highly effective operating model formed on aircraft. 

FedEx works on the hub-spot model, in which an aircraft passes through the hubs placed between the origin and destination of the aircraft. Consequently, the packages picked or dropped on these hub spots, thus overall operational cost reduction and delivery time reduced to some extent. 

Business model of FedEx consists of four key operating segments, as mentioned below. 

  • FedEx Express: This business model is aimed to provide highly time-efficient delivery services with the help of air-ground express services. 
  • FedEx Ground: This business model is particularly designed to serve the North American people. This aim is to fulfill the needs of global customers with geographical barriers. 
  • FedEx Freight: This works on the less-than-truckload approach to address the needs of customers. 
  • FedEx Services: This comes into action to address the need for big businesses such as eCommerce industries. 

Business Model of Delhivery

Delhivery was laid by a team of professionals named Mohit Tondon, Suraj Saharan, Kapil Bharti, Sahil Barua, and Kapil Bharti. 

In general, Delhivery banks upon the Business to Business (B2B), in which businesses provide facilities catering to the businesses. Under this model, charges are levied on the business rather than on the customers. 

The services provided by Delhivery can be primarily divided into three categories named warehousing, transportation, and eCommerce. The focus of Delhivery is on transportation. The company follows the “plug and play” business model. This business model aimed to serve those consumers who wish to deliver their products to their respective consumers.

>>> Also Read : How To Scale Up Online Courier Delivery System With On-Demand Courier Delivery App <<<

The distribution model of Delhivery is well-efficient to assure the delivery of the products without facing any encounters. Each branch acts as a hub and the parcel goes through these hubs before reaching the final destination. 

Revenue Model of FedEx and Delhivery

Revenue Model of FedEx and Delhivery

At the end of the day, the ultimate goal behind the establishment of any business is to make a profit. The same goes for the courier business as well. Hence, knowing about the revenue model of the leading courier service provider like FedEx and Delhivery will enhance your chances of making money. 

There are several models FedEx and Delhivery follow to make revenue. Below we have outlined a few of the highly beneficial ones. 

Peer-to-Peer

Under this revenue model, your business makes revenue by selling access to a technology platform that connects two people i.e. buyers and sellers together. Once the buyers and sellers are connected, they will discuss further and your job will be to deliver the product from the seller’s location to the buyer’s location.

>>>Read More: Complete Guide To Develop An On-Demand Courier Delivery App <<<

For your services, either you can receive a fixed percentage on the value of the product or charge a fixed fee. 

Business-to-Consumer

Under this revenue model, FedEx and Delhivery make a profit by delivering the products directly from the business to consumers. With so many people favoring online shopping, Courier service providers like FedEx and Delhivery are focusing on finding effective ways to deliver the products from business to consumer. 

This revenue model provides better opportunities for revenue in comparison to peer-to-peer business models. 

Subscription Based

FedEx and Delhivery both adopted the subscription-based revenue model to boost their revenue. Under this revenue model, the courier company charges a fixed monthly amount depending upon the average number of deliveries that it needs to make. This model is considered to be highly efficient for the long-term period. 

Business-to-Business

Under this revenue model, courier companies cater to businesses rather than consumers. By talking about FedEx and Delhivery, they follow this model to deliver products from one business to another business in bulk. 

What Future Holds For Courier Service Providers?

As the world is moving towards digital transformation at a quick pace, courier services are benefiting from these changes to improve their services. 

In the following paragraph, we will take a look at what the future holds for courier service providers. 

Drone Delivery

Drone delivery will be the new normal we are going to encounter in the forthcoming days. Amazon and Google are already benefiting from this technology. The main reason behind the adaptation of drone delivery is reducing the fuel cost and improving delivery time.  

>>> Also Read : Courier And Local Delivery Services Market 2020: Potential Growth, Challenges <<<

However, there are some issues with the drone delivery such as the drone’s limited battery life, drone price, and risk of theft or wrong delivery of items. Organizations are working towards solving these challenges. 

Delivery Robots

In the next few years, we are going to witness robots roaming around us and performing multiple tasks including courier delivery. FedEx is also giving thought to the use of delivery robots to deliver its products. 

Driverless Deliveries

These days we hear a lot of news murmuring around the concept of driverless cars. Driverless vehicles are going to transform the world of courier delivery services. The driverless car will help the courier business to save the expenses they need to spend on the hiring of drivers, still, they might need someone to load and unload the packages.

Intelligent Route Planning

Route planning has always been an important part of courier delivery services. This is a time-consuming and really challenging task. 

Today, technology moves to a scale where courier delivery apps or software have capabilities to intelligently plan the route with no need for human interruption. This ability will allow the courier delivery company to deliver the parcel in less time with lower fuel consumption, thus the companies can expect a great level of profit. 

Conclusion: How to Start a Courier Business?

When you think about starting a courier business, the first two things you need to know are the business and revenue model. Now, as you have gained knowledge about the business and revenue model, starting an online courier business might seem an easy task to you. However, besides these two, there are a lot of things that you need to consider starting a courier business. 

Hence, to help you establish your courier business in India, we have written a post serving the topic How to Start a Courier Business in India”. Go through the informative blog post to launch your courier business. 

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