UPS 2011 Annual Report Download - page 15

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Increasing need for vertical expertise in the integrated carrier space
We provide repeatable, scalable sector solutions for our customers. We invest in global capabilities and
create value propositions for certain industries where there is a fit between our customers’ needs and our
offerings. Segments where we bring unique value propositions include health care, high-tech, automotive &
industrial manufacturing, retail, government and professional services.
The health care industry faces complex challenges, including the continuing expiration of drug patents and
the shifting landscape of regulatory requirements and drug pricing controls that differ by country. To counter
these threats, many pharmaceutical companies have embarked on global expansion strategies that require
infrastructure. UPS has aligned our resources to serve these needs through a well-developed supply chain
management capability that is designed to satisfy regulatory and compliance requirements. We have built 33
dedicated health care facilities with over 5 million square feet of distribution space. These facilities allow us to
provide reliable, secure, cost-effective warehousing and distribution for pharmaceutical firms’ supply chains,
which, in turn, allow them to easily navigate across and within borders.
We will continue to expand our vertical offerings, growing not only our physical and market footprint, but
also our expertise and technology to support industry specific needs. Our growth strategy is to increase the
number of customers benefitting from these vertical solutions and gain their associated small package and freight
transportation.
Outsourcing
Outsourcing supply chain management is becoming more prevalent, as customers increasingly view
professional management and operation of their supply chains as a strategic advantage. This trend enables
companies to focus on what they do best. We can meet our customers’ needs for outsourced logistics with our
global capabilities in customized forwarding, warehousing, distribution, delivery and post-sales services. As we
move deeper into customers’ supply chains, we do so with a shared vision on how to best serve those who rely on
our customers. We integrate our technology for efficiencies, visibility and control to ensure that we execute as
promised.
Retail e-Commerce Growth
Throughout much of the world, e-commerce growth continues to outpace traditional lines of business. We
continue to create new services, supported by UPS technology, that complement the traditional UPS premium
home delivery service to address the needs of e-commerce shippers and receivers (“consignees”). Our offerings
span a broad spectrum from cost-sensitive solutions such as SurePost, for shipments where economy takes
precedence over speed, up to feature-rich solutions, including our new UPS My Choice service that provides
consignees with revolutionary visibility and control of their inbound shipments.
With UPS My Choice, consignees direct the timing and location of their deliveries before a delivery attempt
is made. Premium features include online delivery planners, detailed driver instructions, alternate delivery
locations and a two-hour delivery window. Delivery alerts come via the channel chosen by the consignee—email,
SMS text, etc. We strive to give our customers that ship using UPS My Choice the best delivery experience in the
industry—delivery on the first attempt, where and when their customers want it.
Technology
Technology powers logistics. We bring industry leading UPS technology to our customers who, in turn,
realize increased productivity, greater control of their supply chains and improved customer experience when
they integrate with our technology. Customers benefit through offerings such as:
• UPS Quantum View which can speed up the revenue cycle (i.e. faster transit times, coupled with
confirmation of delivery, allow shippers to collect accounts receivable more quickly), allow for
inbound volume planning, manage third party shipping costs, automatically notify customers of
incoming shipments, and of course, track shipments and let the customer react if a specific shipment
status changes.
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