UPS 2013 Annual Report Download - page 17

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Technology forms the foundation of our reliability and allows us to enhance the customer experience. Technology
delivers value to our customers and returns to our shareholders. Recent developments that improve our operational efficiency,
flexibility, reliability and customer experience include:
• Continuing to rollout telematics to our delivery (domestic and international), freight forwarding and tractor-trailer
fleet. Telematics helps UPS determine a truck’s performance and condition by capturing data on more than 200
elements, including speed, RPM, oil pressure, seat belt use, number of times the vehicle is placed in reverse and idling
time. Together, improved data and driver coaching help reduce fuel consumption, emissions and maintenance costs,
while improving driver safety. Additionally, customers experience more consistent pickup times and more reliable
deliveries, thereby enhancing their profitability and competitiveness. By the end of 2013, telematics had been
installed in over 80,000 vehicles.
• Implementing our On Road Integrated Optimization and Navigation system (“ORION”), which employs advanced
algorithms to determine the optimal route for each delivery while meeting service commitments.
• Converting to keyless entry, which enables drivers to remotely turn the engine off with a button that will unlock the
bulkhead door at the same time. In 2013, keyless entry had been installed on all package cars.
• Ramping up installations of our Next Generation Small Sort (“NGSS”) technology, which reduces the amount of
memorization required to sort a package, thereby improving productivity and quality. Employees sort packages to bins
tagged with flashing lights, rather than memorizing addresses, allowing us to dramatically reduce training time.
Reporting Segments and Products & Services
As a global leader in logistics, UPS offers a broad range of domestic and export delivery services; the facilitation of
international trade; and the deployment of advanced technology to more efficiently manage the world of business. We seek to
streamline our customers’ shipment processing and integrate critical transportation information into their own business
processes, helping them to create supply chain efficiencies, better serve their customers and improve their cash flows.
Global Small Package
UPS’s global small package operations provide time-definite delivery services for express letters, documents, small
packages and palletized freight via air and ground services. We provide domestic delivery services within 54 countries and
export services to more than 220 countries and territories around the world. We handle packages that weigh up to 150 pounds
and are up to 165 inches in combined length and girth as well as palletized shipments weighing greater than 150 pounds. All of
our package services are supported by numerous shipping, visibility and billing technologies.
UPS handles all levels of service (air, ground, domestic, international, commercial, residential) through one global
integrated pickup and delivery network. All packages are commingled within our network, except when necessary to meet their
specific service commitments. This enables one UPS driver to pick up our customers’ shipments, for any of our services, at the
same scheduled time each day. Compared to companies with single service network designs, our integrated network uniquely
provides operational and capital efficiencies while being more environmentally-friendly.
We offer same-day pickup of air and ground packages upon request. Customers can schedule pickups for one to five
days a week, based on their specific needs. Additionally, we provide our customers with easy access to UPS, with over
157,000 domestic and international entry points including: 39,000 drop boxes; 1,500 customer centers; 4,800 independently
owned and operated locations of The UPS Store worldwide; 11,300 Kiala and UPS Access Point locations; 11,400 authorized
shipping outlets and commercial counters; 5,500 alliance locations; and 83,900 UPS drivers who can accept packages provided
to them.
The growth of online shopping has increased our customers’ needs for efficient and reliable returns, resulting in our
development of a robust selection of returns services that are available in 150 countries. Options vary based on customer needs
and country, and range from cost-effective solutions such as UPS Returns, to more-specialized services such as UPS Returns
Exchange. UPS Returns enables shippers to provide their customers with a return shipping label, while UPS Returns Exchange
simplifies product exchanges by delivering a replacement item and picking up a return item in the same stop, and assisting with
the re-packaging process.
We operate one of the largest airlines in the world, with global operations centered at our Worldport hub in Louisville,
Kentucky. Worldport sort capacity, currently at 416,000 packages per hour, has expanded over the years due to volume growth
and a centralization effort. Our European air hub is located in Cologne, Germany, and we maintain Asia-Pacific air hubs in
Shanghai, China; Shenzhen, China; and Hong Kong. Our regional air hub in Canada is located in Hamilton, Ontario, and our
regional air hub for Latin America and the Caribbean is in Miami, Florida.