UPS 2008 Annual Report Download - page 13

Our vision for the future is to synchronize the world of commerce, addressing the complexities of our
customers’ supply chain needs. Our goal is to develop business solutions that create value and competitive
advantages for our customers, enabling them to achieve supply chain efficiencies, better customer service for
their customers and improved cash flow.
Operations
We believe that our integrated global network is the most extensive in the industry. It is the only network
that handles all levels of service (air, ground, domestic, international, commercial, residential) through one
integrated pickup and delivery service system.
U.S. Domestic Package
The U.S. business consists of air and ground delivery of small packages—up to 150 pounds in weight—and
letters to and from all 50 states. It also provides guaranteed, time-definite delivery of certain heavy-weight
packages. Substantially all of our U.S. small package delivery services are guaranteed.
This business is built on an integrated air and ground pick-up and delivery network. We believe that this
model improves productivity and asset utilization, and provides the flexibility to transport packages using the
most reliable and cost-effective transportation mode or combination of modes.
In 2006, we made the most significant upgrade ever to our U.S. ground package delivery network,
accelerating the transit times for more than a half-million packages nationwide by one day or more. Additional
lane enhancements were introduced in February 2008.
We believe that our broad product portfolio, reliable package delivery service, experienced and dedicated
employees and unmatched, integrated air and ground network provide us with the advantages of reputation,
service quality and economies of scale that differentiate us from our competitors. Our strategy is to increase
domestic revenue through cross-selling services to our large and diverse customer base, to control costs through
effective network modification and limited expense growth, and to employ technology-driven efficiencies to
increase operating profit.
International Package
The International Package segment provides air and ground delivery of small packages and letters to more
than 200 countries and territories around the world. Export services cross country boundaries; domestic services
move shipments within a country’s borders. UPS’s global presence grew out of its highly refined U.S. domestic
business.
• Europe is our largest region outside the United States—accounting for approximately half of our
international revenue. In Europe we provide both express and domestic service, much like the service
portfolio we offer in the U.S., and based on the same integrated network.
• Through more than two dozen alliances with Asian delivery companies that supplement company-
owned operations, we serve more than 40 Asia Pacific countries and territories. Two of the fastest
growing economies in the world, China and India, are among our most promising opportunities.
• Our Canadian operations include both domestic and import/export capabilities. We deliver to all
addresses throughout Canada.
• We are also the largest air cargo carrier in Latin America and the Caribbean.
We have built a strong international presence through significant investments over several decades. Some of
our recent acquisitions and investments include the following:
• In 2006, to capitalize on growth opportunities across the whole of Europe, we completed the expansion
of our automated package sorting hub at the Cologne/Bonn airport in Germany. The expansion doubled
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