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United Parcel Service
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United Parcel Service, Inc. , commonly referred to as UPS, is the world's largest package delivery company. UPS delivers more than 15 million packages a day to 6.1 million customers in more than 200 countries and territories around the world. Since 2005, its operations include logistics and other transportation-related areas. It has been headquartered in Sandy Springs, Georgia, USA since 1991; headquarters had previously been located in New York City from 1930 until 1975 when it moved to Greenwich, Connecticut.
UPS is well known for its brown trucks, internally known as package cars (hence the company nickname "The Big Brown Machine").
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Encyclopedia
United Parcel Service, Inc. , commonly referred to as UPS, is the world's largest package delivery company. UPS delivers more than 15 million packages a day to 6.1 million customers in more than 200 countries and territories around the world. Since 2005, its operations include logistics and other transportation-related areas. It has been headquartered in Sandy Springs, Georgia, USA since 1991; headquarters had previously been located in New York City from 1930 until 1975 when it moved to Greenwich, Connecticut.
UPS is well known for its brown trucks, internally known as package cars (hence the company nickname "The Big Brown Machine"). UPS also operates its own airline based in Louisville, Kentucky where its Worldport air hub also resides.
Company Structure
UPS' primary business is the time-definite delivery of packages and documents worldwide. In recent years, UPS has extended their service portfolio to include less than truckload transportation (primarily in the U.S.) and supply chain services.
UPS reports their operations in three segments: U.S. Domestic Package operations, International Package operations, and Supply Chain & Freight operations.
U.S. Domestic Package
U.S. Domestic Package operations include the time-definite delivery of letters, documents, and packages throughout the United States.
International Package
International Package operations include delivery to more than 200 countries and territories worldwide, including shipments wholly outside the United States, as well as shipments with either origin or distribution outside the United States.
Supply Chain & Freight
Supply Chain & Freight includes UPS' forwarding and contract logistics operations,
UPS Freight, and other related business units. UPS' forwarding and logistics business provides services in more than 175 countries and territories worldwide, and includes worldwide supply chain design, execution and management, freight forwarding and distribution, customs brokerage, mail and consulting services. UPS Freight offers a variety of less than truckload (“LTL”) and truckload (“TL”) services to customers in North America.
Other business units within this segment include Mail Boxes, Etc. (the franchisor of Mail Boxes, Etc. and The UPS Store) and UPS Capital.
History
- August 281907: 19-year-old Jim Casey and 18-year-old Claude Ryan founded the American Messenger Company in Seattle, Washington, capitalized with $100 in debt.
- 1913: The first delivery car appeared, a Model T Ford. They merged with a competitor, Evert McCabe, and formed Merchants Parcel Delivery. Consolidated delivery was also introduced, combining packages addressed to a certain neighborhood onto one delivery vehicle.
- 1918: A new member was recruited, Charles W. Soderstrom, who helped manage their ever-growing fleet of delivery vehicles.
- 1919: Service began in Oakland, California. The name United Parcel Service was adopted.
- 1930: A consolidated service began in New York, and soon after began operations in other major cities in the east and midwest. First mechanical system for package sorting. Accountant George D. Smith joined the company. The name United Parcel Service was adopted all over the country. All UPS vehicles were then painted the familiar Pullman brown, chosen because it was considered neat, dignified, and professional. Headquarters moved to New York City.
- 1940–1959: Services were expanded by acquiring "common carrier" rights to deliver packages between all addresses, any customer, private and commercial.
 - 1975: UPS began servicing all of the 48 contiguous states of the USA. UPS also established Canadian operations in 1975. On Feb. 28, UPS Ltd. (later changed to UPS Canada Ltd.) began operations in Toronto, Ontario with a single delivery vehicle. UPS Canada's head office is located in Mississauga, Ontario.
- 1976: UPS established itself in Europe with a domestic operation in West Germany. Blue Label Air.
- 1982: UPS Next-Day Air Service is offered in the US and Blue Label Air becomes UPS 2nd Day Air Service.
- 1988: UPS Airlines is launched.
- November 10, 1999: UPS became a public company
- In March 2003, UPS unveiled a new logo, replacing the iconic package and shield originally designed in 1961 by Paul Rand.
- In 2004, UPS entered the heavy freight business with the December 20 announcement of the purchase of Menlo Worldwide Forwarding, a former subsidiary of Menlo Worldwide. UPS rebranded it as UPS Supply Chain Solutions. The purchase price was US$150 million and the assumption of US$110 million in long-term debt.
- On August 5, 2005 UPS announced that it had completed its acquisition of less-than-truckload (LTL) trucking company Overnite Transportation for US$1.25 billion. This was approved by the FTC and Overnite shareholders on August 4, 2005. On April 28, 2006, Overnite officially became UPS Freight.
- On October 3, 2005, UPS completed the purchase of LYNX Express Ltd, one of the largest independent parcel carriers in the United Kingdom, for £55.5 million (US$97.1 million) after receiving approval for the transaction from the European Commission. The first joint package car centre operation, in Dartford, Kent, was opened during mid-2006..
- August 282007: United Parcel Service celebrated its 100th anniversary.
Competitors
Major domestic (United States) competitors include United States Postal Service (USPS), and FedEx. In addition to these domestic carriers, UPS competes with a variety of international operators, including Canada Post, TNT N.V., Deutsche Post (owner of DHL), Royal Mail, Japan Post, India Post and many other regional carriers, national postal services and air cargo handlers (see Package delivery and Mail pages).
Historically, the bulk of UPS' competition came from inexpensive ground-based delivery services, such as Parcel Post (USPS). But in 1998 FedEx expanded into the ground parcel delivery market by acquiring RPS (originally Roadway Package System) and rebranding it as FedEx Ground in 2000. In 2003 DHL expanded its US operations by acquiring Airborne Express, significantly increasing its presence in the United States, and adding more competition in the ground delivery market. In response to this, UPS partnered with the US Postal Service to offer , a program that allows UPS to pick up mail and transfer it to a USPS center, or , for final distribution. This process is also known as , long used by .
More recently, the continued growth of online shopping, combined with increasing awareness of the role transportation (including package delivery) has on the environment, has contributed to the rise of emerging competition from niche carriers or rebranded incumbents. For instance, the US Postal Service claims "greener delivery" of parcels on the assumption that USPS letter carriers deliver to each US address, six days a week anyway, and therefore offer the industry's lowest fuel consumption per delivery. Other carriers, like , which specializes in residential package delivery to APO-FPO addresses, Hawaii, Alaska, Puerto Rico and other US Territories, arose in response to increased demand from catalog retailers and online e-tailers for low-cost residential delivery services closely matching service standards normally associated with more expensive expedited parcel delivery.
Characteristic features
Brand mark
In April 2003, UPS unveiled a new logo, the fourth the company has used, replacing the iconic package and shield originally designed in 1961 by Paul Rand. The original logo first saw use in 1916 when the company was American Messenger Company. In 1935, the logo was redesigned to reflect the company's new name United Parcel Service. All four designs for the logo shared the shield theme, and UPS employees often refer to the brand mark as "the shield."
Brown
The brown color that UPS uses on its vehicles and uniforms is called Pullman Brown. The color is also mentioned in their advertising slogan: "What can Brown do for you?"
Font
UPS commissioned brand consultancy FutureBrand to develop their own font, UPS Sans, for use in marketing and communication material. UPS Sans was created by slightly altering certain parts of FontShop's font FF Dax without permission. This has resulted in an agreement between FontShop and FutureBrand to avoid litigation.
Uniforms
The UPS delivery driver uniform consists of a brown short-sleeve or long-sleeve button-up shirt or blouse with a pointed collar, front left pocket, and the company logo above the pocket. The shirt is worn with a pair of brown pants or shorts. When pants are worn, the shirttail is tucked in. All buttons, with the exception of the one on the collar, are fastened. Both shirts can be worn with either the shorts or the pants. Drivers for UPS Express Critical are not required to wear any uniforms and can deliver in their own clothes.
Winter attire consists of a heavy brown jacket with the UPS logo on the left breast, the trademark brown pants, and either a UPS baseball cap or a simple brown stocking cap. UPS drivers must have a tucked-in brown or white undershirt underneath the jacket.
A UPS driver must be clean-shaven and can only have a neatly trimmed mustache. Sideburns may extend past the ear. Hair may not extend below the top of the collar for males.
During the initial expansion into what was then West Germany the Brown UPS Uniform was replaced with a Green Uniform due to sensitivity over the "Brown Shirts" worn by the Nazi SA during Hitler's rise to power.
Vehicles
Package cars
The UPS package car (or van) is also a major symbol of the U.S. business world.
The classic UPS package car is built on a General Motors or Ford chassis, has a manual transmission, manual steering, and no radio or air conditioning. The older ones are easily recognizable due to their round headlights and turn signals set onto a sculpted fiberglass hood. These are either Grumman Olson P-600 or P-800 step vans (a recent redesign changed the look, replacing the round turn signals with ovoid LED ones).
Newer package cars in North America have either a Freightliner Trucks or Navistar International chassis; automatic transmissions and power steering are slowly appearing in package cars. UPS also operates Dodge Sprinter box vans in rural areas as well as Dodge Grand Caravan minivans.
UPS has ordered Modec electric vans for its UK and German fleets. Energy costs play a huge part in the potential profitability of package delivery companies like UPS, DHL and FedEx .
When package cars reach the end of their useful service life (typically 20–25 years or more), they are almost always dismantled for spare parts; the only exception being when they are repainted white for internal use.
Other trucks
UPS commonly refers to its tractor-trailers as "feeders". The tractors are painted the same shade of brown as the package cars, while the company-owned trailers are painted gray. Most tractors usually tow two trailers in tandem, or a single trailer. They have three different types of feeders — Flatbed, Drop Frame and Trailer On Flat Car (TOFC). The latter are put onto railroad cars. Tractors are usually made by International or Mack, but a few Ford, Sterling, and Freightliner tractors are in the fleet. Past makes in the fleet include Chevrolet, GMC, and Diamond REO.
UPS Airlines
From the launch of UPS Airlines in 1988 to today, UPS has had two color schemes for its aircraft fleet.
The first was introduced in 1988 and is still seen on some of their aircraft today as the new design is phased in. It consisted of a mostly white fuselage. A brown stripe was located on the window line (or where it would have been on its Boeing 757 and 767 freighters). The words United Parcel Service were located above the stripe on the front half of the fuselage. On the 747 aircraft, the United Parcel Service letters were much larger and were located further back. A brown vertical stabilizer featured the then-current UPS shield.
Today's color scheme was introduced alongside the new brandmark design in 2003. The brown stripe was phased out to be replaced by an arching design over the wing coming to a point on the top of the fuselage. This brown segment was trimmed by a gold outline; this is the same color gold as on the new shield. Replacing the company name on the fuselage is, in black: "Worldwide Services", with the words "synchronizing the world of commerce" underneath. The redesigned logo is featured on a brown vertical stabilizer.
Bicycles
UPS uses bicycle messengers with cargo trailers in the cities of Seattle and Grant in Washington State. In 2008, it started hiring in Vancouver, Washington; Portland; Salem; Corvallis; Eugene; and Medford, Oregon.
Other codes
- Railroad reporting marks: UPOZ, UPST, UPSZ, UPWZ, UPSU, FSTU, UPSC
- NMFTA SCAC Code: UPSS, UPSN, UPSC
Operating subsidiaries and alliances
ANA/UPS - All Nippon/United Parcel Deal
All Nippon Airways, a Star Alliance member, and UPS have formed a cargo alliance and code-share to transport member cargo, similarly to an airline alliance.
Personnel structure
UPS employs approximately 425,300 staff, with 358,400 in the U.S. and 67,300 internationally. Approximately 240,000 UPS drivers, package handlers and clerks are represented by the International Brotherhood of Teamsters. The company has had only one nationwide strike in its history, which occurred in 1997, lasting 16 days.
Chief executives
- 1907–1962 James E. "Jim" Casey
- 1962–1972 George D. Smith
- 1972–1973 Paul Oberkotter
- 1973–1980 Harold Oberkotter
- 1980–1984 George Lamb
- 1984–1990 John W. Rogers
- 1990–1997 Kent C. "Oz" Nelson
- 1997–2001 James P. Kelly
- 2002–2007 Michael L. "Mike" Eskew
- 2008–Present Scott Davis
System design
UPS' Parcel Network is based on a hub and spoke model. UPS operates centers that feed parcels to hubs where parcels are sorted and forwarded to their destinations. Centers typically are the point of entry for parcels and send the parcels to one or more hubs. A hub is a location where many centers send packages to be sorted and sent back out to other centers or hubs. For example, a parcel being shipped from Wilmington, North Carolina to San Francisco, California is picked up by a driver and taken to the 23rd Street center in Wilmington, where it is loaded on a trailer and driven to Raleigh, North Carolina. At Raleigh, the package would join packages from all over North Carolina and be forwarded to the Chicago Area Consolidated Hub in Hodgkins, Illinois. After arriving there, it would be loaded onto a trailer and sent by rail (trailer on flat car in most cases) to the North Bay, California hub in San Pablo, California, where it would then be forwarded to the delivery center, loaded onto the delivery vehicle, and transported to its final destination.
UPS' air network runs similarly to the ground network through a hub-and-spoke system, though air hubs are typically located at airports so packages and planes can quickly be unloaded, sorted, and loaded again. Centers feed packages to facilities at airports (called gateways), which in turn send them to an air hub to be sorted and put on another plane to a final destination gateway, and then from there to a center. For instance, a package traveling from Seattle, Washington to Atlanta, Georgia, would be loaded onto an air container at Boeing Field just south of Seattle and flown to the UPS Air Hub at Chicago Rockford International Airport in Rockford, Illinois. From there it would be sorted to a container heading to Atlanta to Hartsfield-Jackson International Airport, and taken by truck from the airport to the delivery center.
Fees for Canadians
The normal procedure for residential customers in Canada to import goods from the U.S. by mail is relatively simple; they are required to pay 5% GST on the item, plus a $5 CAN handling fee collected by the Canada Border Services Agency (CBSA) on behalf of Canada Post. This applies for mailed items greater than $20 CAN and gifts less than $60 CAN in value. However, this does not apply to items shipped by couriers such as UPS.
When delivering packages in Canada, UPS brokers or clears the item through the CBSA and transfers a cost to the buyer. These fees are not disclosed at the time of purchase by the seller as many sellers from the U.S. are themselves unaware of this.
As a result, there have been two class-action lawsuits filed against UPS by Canadians. The first one filed in October, 2006 by Robert Macfarlane, a resident of British Columbia alleges that the UPS brokerage is "so harsh and adverse as to constitute an unconscionable practice."
The second filed by Ryan Wright and Julia Zislin in Ontario claims "that UPS failed to obtain consumers’ consent to act as a customs broker; to disclose the existence and/or amount of the brokerage fee; and to provide consumers with the opportunity or disclose to them how to arrange for customs clearance by themselves."
It is possible for the recipient to avoid these brokerage fees if the parcel is being shipped by a UPS "express" (premium) service, that is, another service other than UPS Standard (Ground).
This distinction is not limited to Canada, or to UPS. As a rule, "mail" import procedures in all countries apply only to items imported by mail, i.e., originated by the exporter's local postal authority (for Canadians, commonly USPS) for delivery by the importer's local postal authority (Canada Post); they do not apply to shipments made by courier services such as UPS, FedEx, or DHL. For example, this distinction is specifically noted by U.S. Customs and Border Protection (CBP) in its website's page on Internet purchases imported into the United States; it also warns that imports by courier may come with "higher than...expected" brokerage fees that "sometimes exceed the cost of (the) purchase", and that prepaid shipping charges on imports by courier normally do not include duties or brokerage fees. (The distinction may be sharper in the U.S. because CBP normally waives duties on mail imports of up to US$200 per day, but not on courier imports of any amount. Use tax, the U.S. equivalent of GST, is collected only by the states, not by CBP or shippers.) What makes this case unique is that UPS charges a substantial brokerage fee on ground shipments to Canada, when other Canadian small-package services apparently charge nothing (UPS "express" services) or a minimal fee (Canada Post).
Fuel economy
In 2004 UPS announced that they would save fuel by minimizing left turns. Because drivers are idle at intersections while waiting to make left turns, UPS developed software that routes the day's packages with preference to right turns. Another advantage of right turns is at stop signs because they spend less time waiting to cross several lanes of traffic when making a left. Now many fire fighting units and EMT services use this system as well. Since UPS operates a fleet of over 88,000 ground vehicles, the fuel savings are considerable. In 2005, UPS eliminated from its travel and saved 51,000 gallons of fuel within Washington D.C. alone.
UPS is also utilizing hybrid electric vehicles (HEV) for local deliveries only. As of May 22, 2007 the company has 50 deployed in Atlanta, Dallas, Houston, and Phoenix. The 50 HEVs are expected to cut fuel consumption by 44,000 gallons.
Environmental Record
UPS has 94,500 vehicles in operation. In May 2008 UPS placed an order for 200 hybrid electric vehicles (adding to the 50 it has currently) and 300 compressed natural gas (which are 20% more fuel efficient, and add to the 800 it already has) vehicles with from Daimler Trucks North America.
UPS received a "starting" rating of 39 points out of 100 totals on the environmental scorecard by the Climate Counts Group for their efforts to lessen the company's impact on the environment. UPS has also been awarded the Clean Air Excellence Award by the United States Environmental Protection Agency because of the alternative fuel program they have developed.
UPS Facts & Statistics
- Founded: August 28, 1907, in Seattle, Wash., USA
- Employees: 425,300 Worldwide (358,000 U.S.; 67,300 International)
- Package Operations 2007 Revenue: $41.3 billion
- 2007 Delivery Volume: 4.0 billion packages and documents
- Daily Delivery Volume: 15.8 million packages and documents
- Daily U.S. Air Volume: 2.3 million packages and documents
- Daily International Volume: 1.9 million packages and documents
- Customers: 7.9 million daily (1.8 million pick-ups, 6.1 million delivery)
- UPS.com: Average 18.5 million daily on-line tracking requests
- Retail Access: The UPS Store, 4,647; Mail Boxes Etc., 1,306; UPS Customer Centers, 1,000; Authorized outlets, 17,000; UPS Drop Boxes, 40,000
- Operating Facilities: 1,801
- Delivery Fleet: 93,637 package cars, vans, tractors, motorcycles
- UPS Jet Aircraft Fleet: 268; 9th largest airline in the world
- Daily Flight Segments: Domestic - 1,130; International - 796
- Airports Served: Domestic - 424; International - 389
- Air Hubs: United States: Louisville, Ky. (Main US Air Hub); Philadelphia, Pa.; Dallas, Texas; Ontario, Calif.; Rockford, Ill.; Columbia, S.C.; Hartford, Conn. In Europe: Cologne/Bonn, Germany. In Asia Pacific: Taipei, Taiwan; Pampanga, Philippines; Hong Kong; Singapore. In Latin America and Caribbean: Miami, Fla., USA. In Canada: Hamilton, Ontario.
- Supply Chain and Freight 2007 Revenue: $8.4 billion
- Facilities: 1,033 facilities in more than 120 countries; .
- UPS Freight Key services: Leading provider of less-than-truckload services coast-to-coast.
- Delivery fleet: 6,353 tractors; 21,818 trailers
- Facilities: 215+ service centers
See also
Further reading
- "Insourcing," Thomas L. Friedman, The World Is Flat: A Brief History of the Twenty-first Century, New York: Farrar, Straus and Giroux, updated and expanded, 2006, pp. 167–176.
- "Big Brown: The Untold Story of UPS" . John Wiley & Sons, 2007.
External links
- Canadian Business Journal - (November 2008) UPS Profile
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- SmartMoney Magazine (Nov 11, 2003), . Retrieved May 24, 2006.
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