Last-minute holiday shopping has taken on new meaning in 2007.

The rapid growth of express-delivery services has been a godsend for procrastinators who now push it to the limit like never before. Combined with the Internet, express delivery provides unparalleled speed.

Consumers appreciate this deadline consciousness, and investors are looking seriously at these stocks.

Express delivery provides the greatest customer satisfaction of any service industry, according to a recent survey by the University of Michigan’s Ross School of Business. It scored an 83, the highest in the service sector.

“The peak shipping week and peak shipping day before Christmas keep getting bigger and bigger as consumers get more and more used to gifts sent last minute through Internet orders,” observed Jon Langenfeld, senior research analyst with Robert W. Baird & Co. in Milwaukee.

Because consumers are reducing the holiday shopping they do in stores as online purchases grow, the supply chain has been altered. A strong US economy, growth in Asia and Europe, and the ability to pass rising costs along to consumers in rate hikes are significant factors.

This benefits express-delivery firms and, potentially, their stock. Los Angeles-based Capital Research and Management Co. recently increased its United Parcel Service Inc. holdings from 5.9 percent to a 10.1 percent stake in the company. Citibank Inc. and UBS AG each purchased a portion of shares in the TNT NV express-delivery firm being sold off by the Dutch government as part of an effort to reduce national debt.

The important caveats are that this growing business must navigate through major trends in economic cycles, competition, fuel costs and labour issues.

Besides individual gifts shipped this holiday season, large retailers and manufacturers are shelling out big bucks for big late-in-the-season air shipments of popular holiday products in short supply at stores.

For example, Best Buy Co. has airlifted PlayStation 3 consoles from Asia to the US to help meet demand, while The Walt Disney Co. has paid extra to air-freight popular Mickey’s Clubhouse play sets from China.

The global express-delivery giants benefiting from the holiday frenzy are:

UPS, the world’s largest package carrier in terms of deliveries; FedEx Corp., the leader in number of air shipments; DHL International Ltd., a unit of former German state-owned mail monopoly Deutsche Post World Net; and TNT NV, a Dutch company that is number two in Europe and often rumoured as a takeover target due to its smaller size. “Peak shipping season started a little later this year because the US economy slowed in the summer months and retailers weren’t very aggressive in ordering for the back-to-school and holiday seasons,” said Helane Becker, transportation analyst with The Benchmark Co. LLC in New York. Now that retailers have discovered consumers are alive, well and demanding key products this holiday season, Becker expects UPS will handle more than 23 million packages and FedEx more than eight million in its peak shipping day on December 21.

“We’re expecting a strong holiday retail environment that will support good, healthy volumes for FedEx and UPS,” predicted Jim Corridore, equity analyst with Standard & Poor’s Corp. in New York. “The drop in oil prices also helps these firms.”

FedEx has gained market share from UPS on the ground and is holding on to it. Since UPS is raising rates more than FedEx, it doesn’t seem to be trying to recapture that market share and is instead seeking improved profit margins, Corridore said. “We’re positive on the stock of FedEx and UPS, but for different reasons,” said Becker. “FedEx is more of a growth company with a bigger Asian platform, especially in China, while we think of UPS as a ground-delivery company.”

UPS, with its growing air freight and international presence, has greater revenue than FedEx. However, FedEx’s continued acquisition of ground-delivery companies is helping it to catch up.

“The message being sent from the companies is that they’re trying to compete on service but aren’t going to compete on price,” said Langenfeld. “UPS is more interested in the full supply chain and logistics, such as warehousing and heavyweight international freight forwarding, while FedEx has basically said it doesn’t want to be in that space.”

FedEx profits rose 40 percent in its recent quarter, while UPS had a nine percent increase. On the labour front, the only major FedEx employee group currently with union representation is its pilots. However, the Teamsters union that already represents UPS drivers has made the organising of FedEx drivers one of its top priorities.

Though DHL is the world’s largest shipper when the US is excluded, it has less than ten percent of the US market and recent results here have disappointed. It is, however, investing significantly in this country. Profits of parent Deutsche Post rose 30 percent in its recent quarter. “DHL is growing off a lower base, but a lot of companies don’t like the idea of having just two big shippers, and we see opportunity for it,” Becker said.

TNT, number four in worldwide express delivery but a European powerhouse operating in 200 countries, received a multiyear contract to provide logistical services and component transportation for 2007 Chrysler Jeeps. Meanwhile, it has unloaded its lacklustre freight-management business.

Andrew Leckey answers questions only through the column. Address inquiries to Andrew Leckey, PO Box 874702, Tempe, Arizona 85287-4702, or by e-mail at andrewinv[AT]aol.com