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United Parcel Service, Inc. (UPS)- Delivery Service -
Category Directory
(404)
828-6000
55
Glenlake Parkway, N.E.
Atlanta, GA 30328
www.ups.com
Sales
$33.5 billion
Business Description
United Parcel Service, more commonly known as UPS, is the world’s largest
package delivery service provider and a leading global provider of
specialized transportation and logistics services. Over the past 97
years, we have expanded from a small regional parcel delivery service into a
global company. We deliver packages each business day for 1.8 million
shipping customers to 6.1 million consignees. In 2003, we delivered an
average of more than 13 million pieces per day worldwide. Total revenue in
2003 was over $33 billion. We focus on the movement of goods, information
and funds, and we seek to synchronize the world of commerce.
Our primary business is the time-definite delivery of packages and documents
throughout the United States and in over 200 other countries and
territories. We have established a global transportation infrastructure and
developed a comprehensive portfolio of guaranteed delivery services, and we
support these services with advanced technology. We provide integrated
supply chain solutions for major companies worldwide. We are the industry
leader in the delivery of goods purchased over the Internet.
Domestic Package Products and Services
For most of our history, we have been engaged primarily in the delivery of
packages traveling by ground transportation. We expanded this service
gradually, and today our standard ground service is available to every
address in the 48 contiguous United States. We handle packages that weigh up
to 150 pounds and are up to 165 inches in combined length and girth.
In addition to our standard ground delivery product, UPS Hundredweight
Service® offers discounted rates to customers sending multiple package
shipments having a combined weight of 200 pounds or more, or air shipments
totaling 100 pounds or more, addressed to one recipient at one address and
shipped on the same day. Customers may realize significant savings on these
shipments compared to less-than-truckload or air freight forwarder published
rates.
We provide domestic air delivery throughout the United States. UPS Next Day
Air® offers guaranteed next business day delivery by 10:30 a.m. to more than
74% of the United States population and delivery by noon to areas covering
an additional 15% of the population. We offer Saturday delivery for UPS Next
Day Air shipments for an additional fee.
We offer additional services, such as Consignee Billing, Quantum View
Manage, Delivery Confirmation and UPS ReturnsSM, to customers that require
customized package distribution solutions.
International Package Products and Services
We deliver international shipments to more than 200 countries and
territories worldwide, and we provide guaranteed overnight delivery to the
world’s major business centers. We offer a complete portfolio of import,
export and domestic services. This portfolio includes guaranteed 8:00 a.m.,
8:30 a.m., 10:30 a.m. and 12:00 p.m. next business day delivery to major
cities around the world, as well as scheduled day-definite air and ground
services. We offer complete customs clearance service for any mode of
transportation, regardless of carrier.
We also have a portfolio of UPS domestic services in 20 major countries
throughout the world, which provide our customers time-definite delivery
options for packages moving between points within those countries.
Europe is our largest region outside the United States. Transborder
services, or the movement of packages within the European Union, are proving
to be the growth engine in this region. To accommodate growth opportunities
across the whole of Europe, we have expanded and further automated our major
air hub in Cologne, Germany.
We continue to invest in infrastructure and technology in Asia. In April
2002, we opened a new intra-Asia hub at Clark Air Force Base in Pampanga,
Philippines to enable future growth in the region. This hub allows us to
compete more effectively in the Asian express market and improve our
Europe/Asia service. We previously acquired landing slots on the new runway
at Tokyo’s Narita Airport, which have resulted in enhanced access and
connections to the intra-Asia hub. We received from the U.S. Department of
Transportation the authority to expand service to and through Hong Kong,
including permanent authority to fly from Hong Kong to other cities,
specifically to our Cologne hub in Europe. This routing was implemented in
October 2003. In addition, Thailand was directly linked to the intra-Asia
network with new flights beginning in October 2003. We continue our
development efforts in the fast-growing China market.
We believe that there is long-term potential for us to expand our service
offerings in Latin America. To this end, we have realigned our delivery
capabilities between key cities in the Mercosur and other trade blocs and
continue to benefit from our Americas International Gateway in Miami,
Florida. This gateway complements our operations in Florida and Latin
America and represents our commitment to the Americas market.
Mexico and Canada are also important to our international activity. We
created UPS Trade DirectSM Cross Border service to manage movements to the
U.S. from these countries. This service combines UPS’s small package,
freight and brokerage capabilities to create an integrated, streamlined and
economical door-to-door solution for customers with complex cross-border
distribution needs.
We also have introduced UPS Trade Direct Ocean™, a service that transforms
ocean container movements into pre-labeled small packages or
less-than-truckload shipments. When the goods arrive in the U.S., packages
are deconsolidated and entered into the UPS system, eliminating the
receiving, sorting and handling necessary in distribution centers. This
service significantly cuts the supply chain cycle from point of origin to
consignee. It also provides our customers with faster time to market,
reduced costs, increased visibility and better management of their global
supply chain.
The Trade Direct portfolio of services reflects both our small package and
supply chain solutions capabilities, uniquely combined to provide new value
to our customers.
Non-Package Products and Services
UPS
Supply Chain Services
UPS Supply Chain Solutions™ meets customers’ supply chain needs by selecting
the most appropriate solution from a portfolio of over 60 services.
Among
these are:
• Logistics and Distribution: supply chain management, distribution center
design, planning and management, order fulfillment, inventory management,
receiving and shipping, service parts logistics, reverse logistics and cross
docking.
• International Trade Management: freight forwarding, full-service customs
brokerage and international trade consulting.
• Transportation and Freight: air, ocean, rail and ground freight utilizing
UPS and other carriers, and multimodal transportation network management.
Other supply chain services are available through UPS CapitalSM and UPS
ConsultingSM:
• Financial: asset-based lending, global trade finance and export-import
lending.
• Consulting: strategic supply chain design and re-engineering advice.
Electronic Services
We provide a variety of UPS on-line solutions that support automated
shipping and tracking.
• UPS OnLine® WorldShip® helps shippers streamline their shipping activities
by processing shipments, printing address labels, tracking packages and
providing management reports, all from a desktop computer.
• UPS CampusShip® is a web-based, UPS-hosted distributed shipping solution
that allows employees of companies with multiple facilities and
decentralized workforces to easily process and ship packages with UPS from
their computer desktops. At the same time, the system gives transportation
and mailroom decision-makers centralized control over shipping procedures
and costs.
• UPS Internet Shipping is a quick and convenient way to ship packages using
the web without installing additional software.
• UPS OnLine® Host Access provides electronic connectivity between UPS and
the shipper’s host computer system, linking UPS shipping information
directly to all parts of the customer’s organization.
• UPS Ready® encompasses electronic solutions provided by third-party
vendors that benefit customers who want to automate their shipping and
tracking processes.
Our website strategy is to provide our customers with the convenience of all
the functions that they otherwise would perform over the phone or at one of
our shipping outlets. Package tracking, pick-up requests, rate quotes,
account opening, wireless registration, drop-off locator, transit times and
supply ordering services all are available at the customer’s desktop. The
site also displays full domestic and international service information.
UPS.com® receives more than 115 million hits and processes over 9.1 million
package tracking transactions daily. A growing number of those tracking
requests now come from customers in the 35 countries that have wireless
access to UPS tracking information. Businesses in 46 countries also can
download UPS OnLine Tools™ to their own websites for direct use by their
customers. This allows users to access the information they need without
leaving our customers’ websites.
Sales and Marketing
The UPS worldwide sales organization includes both our traditional U.S.
domestic and international small package delivery business and our Supply
Chain Solutions group. Globally, we have 5,700 direct sales resources.
This field sales organization consists primarily of locally based account
executives assigned to our individual operating units. For our largest
multi-shipping site customers, we manage sales through an organization of
regionally based account managers, reporting directly to our corporate
office.
Our sales force also includes specialized groups that work together with our
general sales organization to support the sale of e-commerce and customer
technology solutions, international package delivery, LTL and freight
transportation, and warehousing and distribution services.
Our worldwide marketing organization also supports both our traditional U.S.
domestic and international small package delivery business and our Supply
Chain Solutions group. Our corporate marketing function is engaged in market
and customer research, brand management, rate-making and revenue management
policy, new product development, product portfolio management, marketing
alliances and e-commerce, including the non-technical aspects of our web
presence. Advertising, public relations, and most formal marketing
communications are centrally developed and controlled.
In addition to our corporate marketing group, field-based marketing
personnel are assigned to our individual operating units, and are primarily
engaged in business planning, bid preparation and revenue management
activities. These local marketing teams support the execution corporate
initiatives while also managing limited promotional and public relations
activities pertinent to their local markets.
Employees
As of December 31, 2003, we had approximately 355,000 employees.
We have received numerous awards and wide recognition as an
employer-of-choice, including the following:
• In 2003, we were named one of FORTUNE magazine’s “Diversity Elite — 50
Best Companies for Minorities” for the fifth consecutive year.
• We were named the NAACP Corporate Citizen of the Year for 2002.
• We received the National Urban League’s Corporate Leadership Award in 2003
for our longstanding support of the National Urban League.
• We received the Ron Brown Award for Corporate Leadership in 2001.
• Hispanic Magazine recognized us in 2003 as a leader in its annual
“Corporate 100,” a list of companies providing the most opportunities for
Hispanics.
• In 2003, Div2000.com ranked UPS 13th in its annual “America’s Top
Organizations for Multicultural Business Opportunities.”
• In 2002, for the third consecutive year, we were named a top corporation
for women’s business enterprises by the Women’s Business Enterprise National
Council (WBENC).
Competition
We are the largest package delivery company in the world, in terms of both
revenue and volume. We offer a broad array of services in the package
delivery industry and, therefore, compete with many different companies and
services on a local, regional, national and international basis. Our
competitors include the postal services of the United States and other
nations, various motor carriers, express companies, freight forwarders, air
couriers and others. Our major competitors include the United States Postal
Service, FedEx, DHL Worldwide Express, Deutsche Post and TNT Post Group.
We believe competition increasingly is based on a carrier’s ability to
integrate its distribution and information systems with its customers’
systems to provide unique transportation solutions at competitive prices. We
rely on our vast infrastructure and service portfolio to attract and
maintain customers.
As we
expand our supply chain and other non-package businesses, we compete with a
number of participants in the supply chain, financial services and
information technology industries.
Competitive Strengths
Our competitive strengths include:
Global Reach and Scale. We believe that our integrated global ground and air
network is the most extensive in the industry. We operate a ground fleet of
more than 88,000 vehicles, ranging from custom-built delivery vehicles to
large tractors and trailers, and almost 600 airplanes. In the U.S., we
estimate that our integrated door-to-door delivery system carries goods
having a value in excess of 6% of the U.S. gross domestic product, or 2% of
the world’s GDP, and we reach all U.S. businesses and residential addresses.
We are the ninth largest airline in North America and eleventh largest in
the world. Our primary air hub is located in Louisville, Kentucky.
We established our first European operation in Germany in 1975 and expanded
it as the single market created by the European Union drove the need for
pan-European delivery services. We believe we have the most comprehensive
integrated delivery and information services portfolio of any carrier in
Europe.
Through more than two dozen alliances with Asian delivery companies that
supplement company-owned operations, we currently serve more than 40 Asia
Pacific countries and territories. With among the fastest growing economies
in the world, China and India represent two of our most promising
opportunities.
We also are the largest air cargo carrier and a leading logistics provider
in Latin America and the Caribbean. We have formed alliances with a number
of service providers in countries throughout that region.
Our Canadian operations include both intra-Canada and import/export
capabilities, effectively linking two of the world’s most significant
trading partners — U.S. and Canada. We offer delivery to all addresses
throughout Canada, and we are the only carrier to offer guaranteed 8:00 a.m.
delivery next day to all major Canadian cities.
Technology Systems. We continue to be a global leader in merging technology
with business processes to improve operations and provide new or enhanced
services to customers worldwide. We have developed a strong global
capability as a mover of electronic information. We daily transmit
approximately 3 million packets of tracking data via wireless networks, and
we currently collect electronic data on 93% of the packages that move
through our U.S. system each day — more than any of our competitors.
In 2003 we announced plans for significant improvements to our package
sorting and delivery systems. We expect to invest $600 million over the next
several years to simplify and optimize our package sorting and delivery
systems, which we believe will result in significant gains in efficiency,
reliability and flexibility. Once the systems are fully deployed in over
1,000 of our package sorting facilities, which we estimate to be completed
in 2007, we anticipate achieving reductions in operating costs of
approximately $600 million annually. These savings will be realized through
productivity improvements, as well as in savings resulting from driving an
estimated 100 million fewer miles each year.
Technology powers virtually every service we offer and every operation we
perform. Our technology initiatives continue to be driven by the needs of
customers. We provide the infrastructure for an Internet presence that
extends to more than 60,000 customer web sites that integrate UPS® tools. We
offer a variety of on-line service options that enable our customers to
integrate UPS functionality into their own businesses not only to
conveniently send, manage and track their shipments, but to provide their
own customers with better information services.
E-Commerce Capabilities. We are a leading participant in and facilitator of
global e-commerce, which we define as the use of networked computer
technology to facilitate the three flows of commerce: funds, goods and
information. According to Forrester Research, by 2008, online retail sales
should reach $230 billion. Forrester Research also reports that online
retail sales will grow to $123 billion in 2004. We enable our customers
around the world to thrive in this environment by providing a portfolio of
technology solutions that streamline their shipment processing and integrate
critical transportation information into their business processes.
Broad, Flexible Range of Distribution Services. Our portfolio of services
enables customers to choose the delivery option that is most appropriate for
their requirements. All of our delivery service offerings are guaranteed.
Our express air services are integrated with our vast ground delivery
system. This integrated air and ground network enhances efficiency, improves
productivity and provides us with the flexibility to transport packages
using the most reliable and cost-effective transportation mode or
combination of modes. Our sophisticated engineering systems allow us to
optimize our network efficiency and asset utilization on a daily basis.
Customer Relationships. We focus on building and maintaining long-term
customer relationships. We deliver an average of more than 13 million
packages each business day for 1.8 million shipping customers to 6.1 million
consignees. In addition to daily pick-up, thousands of customers access us
daily through UPS On-Call PickupSM for air delivery services, about 45,000
drop-boxes, over 8,000 independently owned authorized shipping outlets, and
more than 3,000 independently owned and operated The UPS StoreTM locations
We place significant value on the quality of our customer relationships, and
we conduct comprehensive research to monitor customer perceptions. Since
1993, we have conducted telephone interviews with shipping decision-makers
virtually every business day to determine their satisfaction with small
package carriers and perception of performance on 17 key categories of
service factors. Results from this survey for the second half of 2003 were
the highest we have ever achieved.
Brand Equity. We have built the leading and most trusted brand in our
industry. Our reputation for quality service, reliability and product
innovation is unmatched. The distinctive appearance of our vehicles and the
friendliness and helpfulness of our drivers are major contributors to our
brand equity.
In 2003 we introduced our first new logo in 42 years. The change was more
than cosmetic; it signals our commitment to provide more comprehensive
solutions to meet our customers’ needs and to be the leader of the broader
business arena of synchronized commerce.
Distinctive People and Culture. We believe that the dedication of our
employees results in large part from our distinctive “employee-owner”
concept. Our employee stock ownership tradition dates from 1927, when our
founders, who believed that employee stock ownership was a vital foundation
for successful business, first offered stock to employees. To facilitate
employee stock ownership, we maintain several stock-based compensation
programs.
Our long-standing policy of “promotion from within” complements our
tradition of employee ownership, and this policy makes it generally
unnecessary for us to hire managers and executive officers from outside UPS.
The vast majority of our management team began their careers as full-time or
part-time hourly UPS employees, and have since spent their entire careers
with us. Our chief executive officer and many of our executive officers have
more than 30 years of service with us and have accumulated a meaningful
ownership stake in our company. Therefore, our executive officers have a
strong incentive to effectively manage UPS, which benefits all of our
shareowners.
Financial Strength. Our balance sheet reflects financial strength that few
companies can match. As of December 31, 2003, we had a balance of cash, cash
equivalents, marketable securities and short-term investments of
approximately $4.0 billion and shareowners’ equity of $14.9 billion.
Long-term debt was $3.1 billion. We carry long-term debt ratings of AAA/Aaa
from Standard and Poor’s and Moody’s, respectively. Our financial strength
gives us the resources to achieve global scale and to make investments in
technology, transportation equipment and buildings in our existing
businesses as well as to pursue strategic opportunities which will
facilitate our growth.
Growth Strategy
Our growth strategy takes advantage of our competitive strengths while
maintaining our focus on meeting or exceeding our customers’ requirements.
The principal components of our growth strategy are:
Build on Our Leadership Position in Our U.S. Business. Our U.S. package
operation is the foundation of our business. We believe that our tradition
of reliable package delivery service, our experienced and dedicated
employees and our 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 core
domestic revenues through cross-selling our existing and new services to our
large and diverse customer base, to limit the rate of expense growth and to
employ technology-driven efficiencies to increase operating profit.
Our vision is to continue growing UPS’s package business by leading the
transformation of supply chain management into the broader business arena of
synchronized commerce, where the flow of goods, information and funds are
seamlessly connected to help our customers grow their businesses.
Continue International Expansion. We have built a strong international
presence through significant investments over a number of decades. The
international package delivery market has grown, and continues to grow, at a
faster rate than the U.S. market. We plan to utilize our worldwide
infrastructure and broad product portfolio to continue to grow high-margin
premium services and to implement cost, process and technology improvements
in our international operations.
Europe is our largest region outside the United States, followed by Asia.
Both of these regions offer significant opportunities for growth. The
expansion of the European Union to include several Eastern European and
Baltic countries will create even greater economic cohesion. Growth in Asia
will be driven by improving demographic and economic trends throughout the
region, with specific emphasis on China and India.
Provide Comprehensive Supply Chain Solutions. Many businesses outsource the
management of all or part of their supply chains to streamline and gain
efficiencies, to strengthen their balance sheets, to support new business
models and to improve service. Companies’ global supply chains are growing
increasingly complicated. They are vulnerable to significant disruptions and
increased regulations. This is creating further demand for a global service
offering that incorporates transportation, distribution and international
trade services with financial and information services. We believe that we
are well positioned to capitalize on this growth for the following reasons:
• We manage supply chains for major companies in 120 countries, with about
25 million square feet of distribution space and over 750 facilities
worldwide.
• We focus on technology, supply chain redesign, and management-based
solutions for our customers rather than solely on more traditional
asset-based logistics such as warehouses and vehicle fleets. We have built
valuable intellectual capital in specific high growth industries such as
healthcare and high-tech.
• We provide a broad range of transportation solutions to customers
worldwide, including air, ocean and ground freight, as well as customs
brokerage and trade and materials management. We provide standardized
service and specialized distribution facilities and services adapted to the
unique supply chains of specific industries such as healthcare, high-tech,
consumer retail and automotive.
• We offer a portfolio of financial services that provide customers with
short- and long-term financing, secured lending, working capital, government
guaranteed lending, lines of credit, global trade financing, credit cards
and equipment leasing.
Leverage Our Leading-Edge Technology and E-Commerce Advantage. We believe
that e-commerce will drive smaller and more frequent shipments and provide a
strong complement to our core delivery service offerings.
Our goals are to provide our customers with easy-to-use, flexible technology
offerings that streamline their shipment processing and integrate critical
transportation information into their business processes, helping them
create supply chain efficiencies, improve their cash flows and serve their
customers. Our leading-edge technology has enabled our e-commerce partners
to integrate our shipping functionality and information solutions into their
e-commerce product suites. Our partners’ products are being installed
throughout the Internet, and we expect these integrated systems to provide
us with a competitive advantage as they allow our customers to provide
better decision-making information and improve customer service.
Pursue Strategic Acquisitions and Global Alliances. Strategic acquisitions
and global alliances play a significant role in spurring growth. We look for
opportunities that:
• complement our domestic package business;
• build our global brand;
• enhance our technological capabilities or service offerings;
• lower our costs; or
• expand our geographic presence and managerial expertise.
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UPS
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