It has long been assumed that the fortunes of the economy and the express package-delivery business move together in lock step. In fact, Federal Reserve economists call United Parcel Service for information about its shipments as they prepare the staff economic forecast presented at each Fed policymaking session.

Analysts say that, in a macro sense, there's still a close relationship between the economy and package delivery by UPS, FedEx and smaller carriers. But in recent years, there have been small departures from the established pattern. The gross domestic product doesn't exactly track package volume anymore, although growth has been sluggish in both. In fact, after years of growing faster than the economy, the package-delivery companies have found themselves trailing the economy slightly in the past couple of years.

U.S. domestic daily package volume for FedEx was down just under 1 percent in the quarter ended Feb. 28, the company reported, from an average of 2.85 million to 2.83 million. UPS's most recent report, for the quarter ended Dec. 31, 2002, showed average daily U.S. package volume down 1.3 percent, to 13.2 million.

On one level the shifting relationship reflects the unusual nature of the latest recession and recovery, in which consumer spending has held up while businesses have retrenched. Kurt Kuehn, a UPS vice president, said that one reason for the phenomenon is that the high-technology industry, once a major revenue source for the express package-delivery business, is not doing as well as consumer goods. Also, he noted that 80 percent of package-delivery business involves shipments from business to business rather than directly to the consumer. While the consumer is somewhat upbeat, business-to-business traffic is sluggish.

"This has been a strange slowdown," Kuehn said. "Clearly the slowdown in technology has taken the bloom off the rose."

But the shifts may also reflect the changing nature of the competition between UPS and FedEx. For many years, UPS was considered the staid ground-delivery carrier with a military mentality. FedEx was the flashy "air force" of overnight package delivery.

Today, UPS has an air arm to rival FedEx's and has earned rights to compete head-to-head in the lucrative and growing Asian market. FedEx bought a nonunion trucking company and is taking on the UPS core ground business. UPS is still the big boy of ground delivery, with about 13 million packages delivered a day, while FedEx Ground is delivering about 1.7 million a day. Both companies have other subsidiaries, including logistics arms.

In an effort to strengthen the UPS brand, the company's Mail Boxes Etc. unit is renaming its outlets "the UPS Store." Many companies are switching business from the more expensive air overnight service to either ground delivery or -- as is increasingly the case with overnight letter service -- to the Internet. In relation to other package business, the overnight letter is less important to all carriers.

"Adobe Acrobat is the single most negative driver of the last 20 years for the overnight letter business," said James J. Valentine, an analyst for Morgan Stanley.

Jess Bunn, a spokesman for FedEx, said the erosion of overnight document service "has gone on for years, since the coming of the fax machine," although that service remains a major revenue source for FedEx. Overnight document service now accounts for 10.5 percent of the revenue of FedEx Express, the corporation's largest arm.

Ground transportation has become far more reliable in the past few years. After years of severe service problems following mergers in the 1990s, freight railroads are running faster and more reliably than ever.

Part of that rail improvement is due to the iron-fisted demands of UPS. While UPS is known for its brown trucks, most long-distance UPS trucks travel in fast rail intermodal trains, making UPS the single largest customer of U.S. railroads.

Even personal computers and other telecommunications equipment, high-value freight that once moved exclusively by air, is beginning to take the truck and the train. A Citigroup analyst said part of the reason for that trend is that PCs have come down so much in price over the years that they're not considered high-value freight.

Whatever is happening to the package-delivery business, people are betting on it to be profitable. In fact, DHL Worldwide Express Inc., owned by the German conglomerate Deutsche Post AG, has bought the ground business of Airborne Express for $1.05 billion in a bid to turn the "big two" of package express into "the big three."

Airborne Chairman Carl D. Donaway, who is to become chief executive of the expanded DHL operation, said the new company will continue to focus on DHL's current bread-and-butter, large corporate customers, but will now also focus on small business and individual package delivery.

"More competition is good," Donaway said, noting that even in the middle of a business slowdown, all the big package-delivery businesses are profitable.

As Fed economists prepare their staff economic forecasts, they call UPS for information on shipments.