UPS 2009 Annual Report Download - page 13

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 2009, we
delivered an average of 15.1 million pieces per day worldwide, or a total of 3.8 billion packages. Total revenue in
2009 was $45.3 billion.
Our primary business is the time-definite delivery of packages and documents worldwide. The UPS service
portfolio also includes 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 operations include the time-definite delivery of letters, documents, and
packages throughout the United States.
• International Package operations encompass delivery of letters, documents, and packages 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 is comprised of our forwarding and logistics operations, UPS Freight, and
other related businesses. 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 101,900 vehicles, which
reaches all business and residential zip codes in the contiguous U.S. We also operate an air fleet of 510 aircraft,
and we are one of the largest airlines in the world. Our primary air hub is in Louisville, KY. Regional air hubs are
located in 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 operate a global transportation infrastructure and offer 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. Notwithstanding the global recessionary conditions that prevailed throughout most of 2009, we
believe that the following trends will allow us to continue to grow our business over the long term:
• As countries around the world recover from the recession that characterized most of 2009, global trade
should resume, albeit slowly.
• Just-in-time inventory management, increased use of the Internet for ordering goods, and
direct-to-consumer business models require transportation services to be effective.
• 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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