The Freight Wars

The shipping giants are at it again. Within weeks of each other, they've announced new e-commerce fulfillment strategies, and they're both called eLogistics. The competing companies have a long history of piggybacking each other's announcements--sometimes within a matter of hours--with similar sounding news.

Last week Federal Express fdx (nyse: fdx - news - people), which has $17.8 billion in sales, announced that it will roll its pre-existing logistics division into a new eLogistics subsidiary. A month ago, when United Parcel Service ups (nyse: ups - news - people) announced its e-Ventures incubation arm, the $28 billion company revealed that its first project will be a company called eLogistics. The new UPS eLogistics unit, like the FedEx project, will provide both physical and technical fulfillment services. There was an earlier and now defunct UPS project called eLogistics.net, which aimed to be an application service provider for supply-chain management software.

"All this does is commodify the eLogistics name so it won't relate to either brand," says John Fontanella, an analyst at AMR Research. "This makes both projects sound more like marketing ploys than tangible services."

Behind the marketing spin, there are substantial corporate efforts to rework the companies' images from shipping specialists to e-commerce supply-chain experts.

"We're going to see lots more announcements coming out, trying to change people's perceptions," says Fontanella. FedEx and UPS see tremendous opportunity in the challenges between the time an order is placed and when it lands on either a consumer's doorstep or a company's shipping dock.

While a new supply-chain operation creates a new revenue stream in of itself, it's also an effective way to lock in more of the corporate-shipping market that both are vying for.

Companies