Where Global Logistics Brands Stand
UPS remains the world’s most valuable logistics brand at US$22 billion, while TNT Express’s brand value dropped 42 percent, making it the fastest-falling brand in 2017. That’s according to valuation and strategy consultancy Brand Finance, which values the brands of thousands of the world’s biggest companies.
The company first evaluates brands to determine their power/strength (based on factors such as marketing investment, familiarity, loyalty, staff satisfaction, and corporate reputation) and assigns a corresponding letter grade up to AAA+. The consultancy uses brand strength to determine what proportion of a business’s revenue the brand contributes, then projects that into perpetuity to determine the brand’s value.
Not only is UPS the most valuable logistics brand, it is also the most powerful. The company recently invested in 14 Boeing 747s, in addition to smaller aircraft, as it joins Amazon in the race toward drone deliveries. UPS rolled out its “What’s Your Story?” campaign in March 2016 to further develop its relationship with small business customers. This forms part of its broader “United Problem Solvers” strategy intended to position UPS as not only a delivery service, but also a go-to service to help companies achieve business goals or overcome hurdles.
FedEx also recently handed its UEFA Europa League sponsorship assets to the UEFA Foundation and the Street League children’s charity to give more than 100 children the chance to walk out with Liverpool Football Club’s players. Though there is a risk that this move will reduce FedEx’s awareness scores, the goodwill gesture may improve recommendation and scores for governance and CSR measures.
FedEx and UPS have been embroiled in disputes over their controversial takeover bid of Holland’s TNT Express. In 2013, EU anti-trust authorities blocked UPS from acquiring the business for US$5 billion over concerns about market dominance in Europe.
Eyebrows were raised, however, when FedEx was subsequently allowed to acquire the business. In a significant decision, the EU’s general court ruled that UPS’s rights of defense had been infringed, opening the door for UPS to sue for damages.
UPS, though understandably frustrated, may have dodged a bullet. FedEx acquired TNT Express for US$1 billion less than the previous agreed price, and over the course of 2016 the brand’s value plunged. Brand value is down to US$810 million, making TNT Express the fastest-falling brand this year. Profitability has been weak for years, but brand value remained high on optimism that the picture would change. Time and optimism have now run out for TNT Express, and even FedEx may find maximizing value a challenge.
Royal Mail is another poor performer, down 21 percent year on year. Royal Mail’s troubles go beyond the Brexit referendum. Its share price has dropped consistently from September 2016 and now stand at a near all-time low.