UPS 2014 Annual Report Download - page 19

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As U.S. online sales are estimated to nearly double by 2020, UPS invested over $1 billion in facility expansions and
equipment modernization to better manage volume growth throughout the year, and to ensure a successful peak season in 2014
and beyond. Other significant improvements to effectively manage seasonal volume fluctuations included:
• Enhancing Cyber Week operations in the U.S., including full ground and air pickup and delivery operations on Black
Friday.
• Using additional aircraft and regional air hubs to add significant capacity to UPS’s air network during critical periods.
• Automating facilities to expand our existing capabilities through enhanced technology.
• Adding new delivery vehicles and trailers, and increasing staffing to improve efficiency in all areas.
• Updating www.ups.com and expanding UPS communications to enhance the timeliness and relevance of alerts when
service disruptions occur.
Our significant investments in network capacity improvements and enhanced shipment visibility demonstrate our
readiness to provide exceptional service and peace of mind to our customers.
International Package Reporting Segment
Our International Package reporting segment includes the small package operations in Europe, Asia, Canada and Latin
America, the Indian sub-continent, the Middle East and Africa. UPS offers a wide selection of guaranteed day and time-definite
international shipping services.
• We offer three guaranteed time-definite express options (Express Plus, Express and Express Saver) to more locations
than any other carrier.
• In 2013, we introduced UPS Worldwide Express Freight for palletized shipments over 150 pounds. In early 2015, this
service was enhanced to include 50 origins and 51 destinations, helping UPS customers to expand the footprint of their
palletized shipments to major markets throughout the world. UPS Worldwide Express Freight leverages our unique
combination of package and freight networks to provide industry leading transit times with a money-back guarantee.
• For international shipments that do not require express services, UPS Worldwide Expedited offers a reliable, deferred,
guaranteed day-definite service option. In 2013, we tripled the coverage area for UPS Worldwide Expedited,
providing delivery in two-to-five business days to more than 220 countries and territories. We continue to expand our
origin footprint for this service moving to over 80 origins in 2015. This expansion will help UPS customers magnify
their global reach and balance delivery speed with cost, no matter where they ship.
• For cross-border ground package delivery, we offer UPS Transborder Standard delivery services within Europe,
between the U.S. and Canada and between the U.S. and Mexico.
Europe, our largest region outside of the U.S., accounts for roughly half of international revenue and is one of the
primary drivers of our growth. Several factors provide significant opportunities, including the highly fragmented nature of the
market and the fact that exports make up a significant part of Europe’s GDP. We believe there is a continued strong potential
for growth in small package exports in Germany, the U.K., France, Italy, Spain and the Netherlands. To accommodate this
growth, we expanded our main European air hub in Cologne, Germany in the first quarter of 2014; increasing capacity to
process 190,000 packages per hour.
Asia remains attractive due to growth rates in intra-Asia trade and the expanding Chinese economy. We are bringing
faster time-in-transit to customers focused on intra-Asia trade, and reducing transit days from Asia to Europe. Through added
flight frequencies, we provide our customers the ability to ship next day to more places in Europe, guaranteed, than any other
express carrier. We are continuing to build our presence in China through the expansion of our service capabilities, investing in
our transportation network and strengthening brand awareness. During 2014 we opened a new Trans Pacific Air Hub at Taiwan
Taoyuan International Airport, marking a 40% increase in size from the previous hub and increasing connectivity from Taiwan
to key markets in the U.S. and Europe. Additionally, we serve more than 40 Asia-Pacific countries and territories through more
than two dozen alliances with local delivery companies that supplement company-owned operations.
Additional international highlights include the following:
• In South and Central America, we benefit from a strong regional economy. Our offerings include express package
delivery in major cities as well as distribution and forwarding services. We continue to expand our network in Brazil,
with plans to open nine new operating facilities strategically located in the state of Sao Paolo, set to be completed in
May 2015. This enhancement will increase territorial coverage by 78% and improve time in transit throughout this key
market.