UPS 2008 Annual Report Download - page 21

FAA regulations mandate an aircraft corrosion control program, along with aircraft inspection and repair at
periodic intervals specified by approved programs and procedures, for all aircraft. Our total expenditures under
these programs for 2008 were $12 million. The future cost of repairs pursuant to these programs may fluctuate
according to aircraft condition, age and the enactment of additional FAA regulatory requirements.
The TSA regulates various security aspects of air cargo transportation in a manner consistent with the TSA
mission statement to “protect the Nation’s transportation systems to ensure freedom of movement for people and
commerce.” UPS Airlines, and specified airport and off airport locations, are regulated under TSA regulations
applicable to the transportation of cargo in an air network. In addition, personnel, facilities and procedures
involved in air cargo transportation must comply with TSA regulations.
UPS Airlines, along with a number of other domestic airlines, participates in the Civil Reserve Air Fleet
(“CRAF”) program. Our participation in the CRAF program allows the U.S. Department of Defense (“DOD”) to
requisition specified UPS Airlines wide-body aircraft for military use during a national defense emergency. The
DOD compensates us for the use of aircraft under the CRAF program. In addition, participation in CRAF entitles
UPS Airlines to bid for military cargo charter operations.
Ground Operations
Our ground transportation of packages in the U.S. is subject to the DOT’s jurisdiction with respect to the
regulation of routes and to both the DOT’s and the states’ jurisdiction with respect to the regulation of safety,
insurance and hazardous materials.
We are subject to similar regulation in many non-U.S. jurisdictions. In addition, we are subject to non-U.S.
government regulation of aviation rights involving non-U.S. jurisdictions, and non-U.S. customs regulation.
The Postal Reorganization Act of 1970 created the U.S. Postal Service as an independent establishment of
the executive branch of the federal government, and vested the power to recommend domestic postal rates in a
regulatory body, the Postal Rate Commission. We participate in the proceedings before the Postal Rate
Commission in an attempt to secure fair postal rates for competitive services.
We are subject to numerous other laws and regulations in connection with our non-package businesses,
including customs regulations, Food and Drug Administration regulation of our transportation of
pharmaceuticals, and state and federal lending regulations.
Customs
We are subject to U.S. customs laws and related DOT regulations regarding the import and export of
shipments to and from the U.S. In addition, our customs brokerage entities are subject to those same laws and
regulations as they relate to the filing of documents on behalf of client importers and exporters.
Environmental
We are subject to federal, state, and local environmental laws and regulations across all of our business
units. These laws and regulations cover a variety of processes, including, but not limited to: proper storage,
handling, and disposal of hazardous and other waste; managing wastewater and storm water; monitoring and
maintaining the integrity of underground storage tanks; complying with laws regarding clean air, including those
governing emissions; protecting against and appropriately responding to spills and releases; and communicating
the presence of reportable quantities of hazardous materials to local responders. UPS has established site- and
activity-specific environmental compliance and pollution prevention programs to address our environmental
responsibilities and remain compliant. In addition, UPS has created numerous programs which seek to minimize
waste and prevent pollution within our operations.
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