UPS 2008 Annual Report Download - page 12

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PART I
Item 1. Business
Overview
United Parcel Service, Inc. (“UPS”) is the world’s largest package delivery company, a leader in the U.S.
less-than-truckload industry, and a global leader in supply chain management. We were founded in 1907 as a
private messenger and delivery service in Seattle, Washington. Today, we deliver packages each business day for
1.8 million shipping customers to 6.1 million consignees in over 200 countries and territories. In 2008, we
delivered an average of 15.5 million pieces per day worldwide, or a total of 3.92 billion packages. Total revenue
in 2008 was $51.5 billion.
Our primary business is the time-definite delivery of packages and documents worldwide. In recent years,
we have extended our service portfolio to include global supply chain services and less-than-truckload
transportation, primarily in the U.S. We report our 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
from or to the United States with another country as the destination or origin point.
•Supply Chain & Freight. Supply Chain & Freight includes our forwarding and logistics operations,
UPS Freight, and other related business units. Our forwarding and logistics business provides services
in more than 175 countries and territories worldwide, and includes supply chain design and
management, freight 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.
Transportation and Infrastructure. We operate a ground fleet of approximately 107,000 vehicles, which
reaches all business and residential zip codes in the contiguous U.S. We also operate an air fleet of about 570
aircraft, the ninth largest airline in the world. Our primary air hub is in Louisville, KY. Regional air hubs are
located in Columbia, SC; Dallas, TX; Hartford, CT; Ontario, CA; Philadelphia, PA; and Rockford, IL. Our
largest international air hub is in Cologne, Germany, with other regional international hubs in Miami, FL;
Canada; Hong Kong; Singapore; Taiwan; China; and the Philippines.
We have established a global transportation infrastructure and a comprehensive portfolio of services. We
support these services with advanced operational and customer-facing technology. Our supply chain solutions
enable customers’ inventory to move more effectively. As a consequence, they can concentrate on their own core
competencies.
Outlook. We believe that the following trends will allow us to continue to grow our business over the long
term:
• Globalization of trade is a worldwide economic reality, which will continue to expand as trade barriers
are eliminated and large consumer markets, in particular China, India and Europe, experience
economic growth.
• To be effective, just-in-time inventory management, increased use of the Internet for ordering goods,
and direct-to-consumer business models require transportation services.
• Outsourcing supply chain management is becoming more prevalent, as customers increasingly view
effective management of their supply chains as a strategic advantage rather than a cost center.
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