UPS 2010 Annual Report Download - page 14

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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 flows.
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. All packages are commingled throughout their journey through
our network, except when necessary to meet their specific service commitments.
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 heavyweight
packages. Substantially all of our U.S. small package delivery services are guaranteed.
The integrated air and ground pick-up and delivery network on which this business is built 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 2010, UPS completed the second phase of a multi-year expansion of the fully automated Worldport®air
hub in Louisville, KY, our largest air hub. Worldport®sort capacity has been expanded to 416,000 packages per
hour—a 37% increase. This expansion enables more cost-effective package processing and enables the use of
larger, more fuel efficient aircraft.
During the first quarter of 2010, UPS completed a restructuring of its U.S. package operations. With this
new structure, we now have the opportunity to better deliver the value our solutions bring to small and medium-
sized customers.
In 2009, we expanded our early morning delivery service. UPS now delivers earlier to more businesses and
zip codes in the United States, and earlier to more countries from the United States, than our competitors.
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 220 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 model.
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