UPS, FEDEX SPEED INTO EARLIER SERVICE

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Fast. Faster. Fastest.

That tagline for the newest United Parcel Service ad campaign from Ammirati & Puris/Lintas, New York, touts the company's Early A.M. service. But it might also be the battle cry for others in that niche of the air express business, including Federal Express Corp.

Early morning delivery, a small market which means 8 a.m. or 8:30 a.m. delivery at a premium price, just received another player with the announcement of FedEx First Overnight.

FedEx joins competitor UPS and dozens of other smaller couriers, freight forwarders and those who sell a 9 a.m. service into a market industry experts say is small but profitable. Currently, UPS Early A.M. goes to 13 cities by 8 a.m. and to 4,100 by 8:30 a.m. FedEx First is beginning in 90 cities by 8 a.m.

TimeXpress Air Services, Columbus, Ohio, which has 24-hour businesses such as medical centers and banks moving canceled checks as its primary customers, says it can make a delivery before daybreak, if that's when you want to be in the office.

Industry sources say a UPS marketing and awareness survey showed customers thought first of FedEx when they had to express a package.

UPS, believing it was just as good even though public perception was in favor of FedEx, wanted to introduce a service that was faster and better than the standard 10:30 a.m. or even the 9 a.m. hold-for-pickup that FedEx has had for years.

"It turned out our customers who are trying to cut down on inventory and reduce distribution wanted this service," said Joe Pyne, VP-U.S. marketing manager for UPS. "They are the ones who will drive this business."

After UPS came out with Early A.M. in January, FedEx, which had studied this for years but always deemed it too small, began to look at the service more seriously. The Memphis, Tenn.-based company saw a profit window for a premium service that it could tack money onto immediately.

"Our customers wanted early delivery times," said Mike Glenn, VP-marketing and customer service for FedEx. "We listened to them."

FedEx also is running an ad campaign for FedEx First from BBDO Worldwide, New York.

And Guy King, VP-corporate development for TimeXpress, encourages FedEx and UPS to advertise their new services heavily.

"I can't afford to advertise on TV at all. They can educate the American businessman and create a market awareness for this service to a level I can't. That will only help my business. Sure, go ahead. Advertise," Mr. King said.

To some, UPS and FedEx are only perplexing consumers with Early A.M.

"The public is being confused because of the large menu you can buy and the wide variety of times available," said Bruce Tonn, director, cargo marketing for Delta Air Lines.

Mr. Tonn's express product, Delta Dash, offers a flight-specific service. And, while Delta can deliver a package at 8 a.m., it is more of a same day service.

Mr. King sees other troubles.

"They have labor issues and have built a giant mechanism to do one thing well," he said. "Now they are trying to mix in other work and that is a great way to mess it up."

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