ATLANTA, Georgia — FedEx Corp.’s ground package and less-than-truckload services made strides in 2003, gaining market share in two of the key segments of U.S. surface transport, The Colography Group, Inc., concludes in its full-year and fourth-quarter 2003 traffic and yield analysis of the U.S. trucking market.

According to The Colography Group data, “FedEx Ground,” FedEx’s ground package unit, captured 14.8% of the $22.4 billion parcel market in 2003, up from 14% in 2002. FedEx Ground held 15.5% of ground package revenue and 17.8% of tonnage, up from 14.7% and 16.6%, respectively, in 2002.

FedEx Ground’s gains came largely at the expense of UPS. UPS’ share of shipments, tonnage and revenue declined on a year-over-year basis, with its share of U.S. domestic ground parcel shipments falling below 70% to 69.3%. Despite the share decline, UPS remains the dominant provider in the U.S. domestic ground parcel market.

Market share held by the U.S. Post Office and the category labeled “all others” remained virtually flat year over year. USPS, Airborne (now integrated with DHL) and the “all others” category accounted for about 16% of all shipments and 11% of all tonnage and revenue in 2003.

FedEx Freight, the company’s LTL unit, captured 11.4% of all LTL shipments in 2003, up from 11% in 2002. Its share of LTL tonnage rose to 12.1% from 11.7%, and its share of revenue increased to 12% from 11%. Despite the market share gains, FedEx Freight’s shipments and tonnage were down year-over-year.

“Clearly, FedEx’s shift in emphasis from air to surface services is paying off with market share gains across all parts of the ground parcel and LTL segments, its two key segments,” said Ted Scherck, President, The Colography Group. “FedEx has embraced the secular migration by U.S. business to surface transport, and its strategy and execution is gaining traction.”

Scherck also attributed FedEx’s buoyancy to the impact of the U.S. economic recovery that took hold in the late spring of 2003 and gathered steam as the year progressed.

Looking ahead, perhaps the most interesting trend will be the growing battle between UPS and FedEx for ground parcel share,” said Scherck. “UPS remains the 800-pound gorilla, and it must be noted that FedEx’s share gains in 2003 were driven off a much smaller base. And in the first quarter of 2004, UPS shipment count is up 6.9% compared to FedEx’s 5.8% increase. However, as our data indicates, FedEx Ground has emerged as a powerful player, and one UPS will always have to reckon with.”

“Among the findings in the fourth quarter/annual 2003 edition of the U.S. Domestic Surface Traffic And Yield Analysis By Competitor and Market Segment:

– The top seven LTL carriers in 2003 controlled 64.4% of the shipments, 63.5% of the tonnage and 71.3% of the revenue. However, no single carrier controlled more than 14.5% share in any of the three categories.

– Of the seven carriers profiled, USFreightways held the largest share in shipments and tonnage, while Yellow Corp. had the largest share of 2003 revenue. The year-over-year comparisons included results for the first nine months of 2002 from Consolidated Freightways Inc., which ceased operations in September 2002.

– More than 3.7 billion ground parcel shipments moved in U.S. commerce in 2003, up from 3.6 billion shipments in 2002. Revenue of $22.4 billion in 2003 rose from $21.03 billion in 2002.

– Despite declining shipment share, UPS’ 2003 ground parcel shipments-as well as revenue and tonnage-exceeded comparable 2002 figures.

In its 16th year of publication, the Colography report provides quarterly and annual estimates of the results for the leading U.S. ground parcel and LTL competitors. The report is used to study competitive trends, analyze changes in the mix of business, measure share and growth by market segment and/or level of service, and identify competitor strengths and weaknesses.