Correction: We errantly reported a UPS labor strike in Q3 2002 in the original version of this story. Our apologies. The only labor strike the company ever experienced was in August 1997.

No, that's not The Godfather of Soul, James Brown, we're referring to. We're talking about United Parcel Service (NYSE:UPS), which today announced stellar earnings that increased 27% on a year-over-year basis.

Though other segments are getting some headlines this quarter, remember that it is UPS Ground, or the team of guys and gals in the cute shorts and hats, that is Brown's bread-and-butter business, accounting for 49% of revenues for the first nine months. A closely watched industry metric, average daily package volume, has made a dramatic turnaround for Brown Ground, increasing 2% for Q3 following a relatively flat increase for Q2 and preceded by eight dismal quarters reaching back to 2001 (roughly tracking a sluggish economy).

CFO Scott Davis says among the highlights this quarter are "accelerated growth in U.S. package deliveries [and] increasing signs of U.S. economic growth." The news should only get better beginning in Q4. In a move that will strengthen the ground delivery value proposition, the company previously announced it would shave one day off its ground delivery time in 25 of the metropolitan areas it serves -- among them the New York to Los Angeles and Washington, D.C., to Houston routes.

By far the market leader in the ground wars with around 60% market share according to The Wall St. Journal, since 2000 UPS has lost 1.4% while arch-nemesis FedEx (NYSE:FDX) has gained share, partly due to fears of a labor strike -- which was ultimately averted -- at UPS during the third quarter of 2002.

UPS, on the news, closed at $69.18, up a fraction but at a new 52-week high. On a relative valuation basis, however, it's still trading at a discount to FedEx at around 23 times last year's earnings vs. 28 at FedEx.

So, with the ground segment turning around, an increasingly robust economy, and impressive results from the international segment, investors can say, "Ow, I feel good!"

If you want to find out what we've said in recent articles about competitor FedEx, check out FedEx Packs It In and FedEx Delivers . Then head over to the UPS and FedEx discussion boards.

You can reach Chris Cather at .