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UPS Flight Forward Boasts First-Ever Part 135 Standard Certification

ups flight forward

UPS Flight Forward Boasts First-Ever Part 135 Standard Certification

Drones continue to make news headlines with the latest announcement from UPS Flight Forward, Inc. confirming the first-ever government-approved Part 135 Standard certification awarded by the FAA earlier this week. This certification – which is known as the highest level, supports the UPS subsidiary to further opportunities in drone deliveries including operating drones beyond the visual line of sight (BVLOS).

“This is history in the making, and we aren’t done yet,” said David Abney, UPS chief executive officer. “Our technology is opening doors for UPS and solving problems in unique ways for our customers. We will soon announce other steps to build out our infrastructure, expand services for healthcare customers and put drones to new uses in the future.”

UPS Flight Forward deployed the first BVLOS drone delivery to WakeMed’s hospital in Raleigh, North Carolina shortly after receiving the certification. The government-exempted BVLOS flight was carried out by Matternet’s M2 quadcopter. UPS partnered with drone creator Matternet earlier this year to expand supporting healthcare delivery operations specifically for WakeMed’s hospital campus. These operations further reiterate the demand for efficient, speedy deliveries for the medical industry and its patients.

“UPS Flight Forward is benefitting from our knowledge as one of the world’s leading airlines. The Flight Forward organization is building a full-scale drone operation based on the rigorous reliability, safety, and control requirements of the FAA,” Abney said.

The Part 135 Standard certification carries significant advantages with minimal restrictions to UPS, such as no limits on the scale of operations, unlimited numbers of drones and remote operators, cargo weights exceeding 55 pounds, and more. By obtaining this certification, common barriers associated with drone deliveries are eliminated.

“This is a big step forward in safely integrating unmanned aircraft systems into our airspace, expanding access to healthcare in North Carolina and building on the success of the national UAS Integration Pilot Program to maintain American leadership in unmanned aviation,” said U.S. Secretary of Transportation Elaine L. Chao.

seasonal

UPS Beefs Up Seasonal Employees for Holiday Preparations

With the holidays quickly approaching, UPS begins preparations for the inevitable increase in demand by recruiting an estimated 100,000 full and parttime seasonal workers. The positions available include package handlers, drivers and driver-helpers offering competitive incentives to qualified seasonal workers. Among benefits highlighted include the company’s Earn and Learn program which offers students up to $1,300 towards college expenses, healthcare, and retirement benefits.

“We expect another record Peak season this year, with daily package deliveries nearly doubling compared to our average of 20 million per day,” said Jim Barber, chief operating officer.  “In order to make that happen, once again we’re recruiting about 100,000 people for some of the country’s best seasonal jobs.”

UPS reports that about 35 percent of their seasonal packaging handler employees were eventually recognized and named permanent staff members. Other seasonal employees, such as Mercy Alvarado, benefit from the UPS-employee relationship years following the initial hire.

“I started my UPS career as a seasonal driver helper in part because the company’s tuition reimbursement program offered an opportunity to continue my education,” Alvarado said. “Since then I’ve not only completed my associate’s and bachelor’s degrees, I’ve been promoted twice and am now a full-time supervisor. UPS is the place where I plan to retire someday, and I’ll always be thankful for this amazing job and opportunity.”

Other seasonal employees hired by UPS support operations at temporary facilities designated specifically for demanding shipping waves reported during the holidays and other peak seasons.

FedEx

FEDEX, UPS, & AMAZON SCRAMBLING IN THE AIR FOR FAST, FREE SHIPPING

Christmas came in May for Amazon Prime subscribers, who were informed the platform’s tens of millions of items would be available for free same-day delivery and two-day shipping. 

“Prime Free One-Day is possible because we’ve been building our network for over 20 years,” reads a company statement. “This allows Amazon to work smarter based on decades of process improvement and innovation, and to deliver orders faster and more efficiently.” 

Customers reap the benefits as Rakuten Intelligence research shows that over the past two years, the time from purchase to delivery has been slashed from 5.2 days to 4.3 days on average. And yet, Amazon is faster still, at 3.2 days.

Other retailers took the Amazon news like a lump of coal, with Walmart scrambling to unveil free one-day shipping without a membership fee. Target already had such a program for card-carrying loyalty shoppers. FedEx revealed it was parting ways with Amazon for “strategic reasons.”

Meanwhile, industry watchers caution about the hidden baggage that comes with rapidly delivered packages.

Competition is Fierce

Despite the cheery one-day news, Amazon still faces competition from Walmart, which boasts more than 4,700 store locations and an extensive network of warehouses from which it can deliver packages. Another worthy contender is XPO Logistics, which is among the largest third-party logistics providers with 90 facilities across the country. 

During his December earnings call, FedEx CEO and founder Fred Smith said his company views Amazon “as a wonderful company and service and they’re a good customer of ours. We don’t see them as a peer competitor at this point in time.” 

Mere months later, FedEx severed ties with Amazon and partnered with Dollar General on package delivery services, with expectations to offer the service in more than 1,500 stores by late in the summer, building to over 8,000 stores by 2020. 

“We believe this move is an attempt to increase delivery density in lower population areas,” states the Morgan Stanley Research on the move. “… The Dollar General partnership follows a series of headlines including FDX’s AMZN customer loss, move to seven-day ground delivery, and incentive compensation modification ahead of their June 25th fourth quarter earnings release.

So much for not seeing Amazon as competition. FedEx’s annual report, which was released on July 16, mentioned Amazon six times and included this context: “We face intense competition.”

“[I]f customers, such as Amazon.com, further develop or expand internal capabilities for the services we provide, it will reduce our revenue and could negatively impact our financial condition and results of operations,” the FedEx report states. “News regarding such developments or expansions could also negatively impact the price of our common stock.”

And how is this for sounding completely opposite to what Smith had said just seven months prior? “[S]ome high volume package shippers, such as Amazon.com, are developing and implementing in-house delivery capabilities and utilizing independent contractors for deliveries, and may be considered competitors.”

Look! Up in the Sky!!

“Amazon.com is investing significant capital to establish a network of hubs, aircraft and vehicles,” the FedEx annual report notes.

That’s striking when you consider the far fewer times FedEx rival UPS is mentioned in the same report. Keep in mind that UPS currently has 564 cargo jets and thousands of facilities and fulfillment centers around the world, while Amazon has one air hub and options on 100 planes—by 2021, according to a June announcement. 

Ditching Amazon as an air customer led to FedEx slashing prices to fill its planes, according to numerous reports.

As the shipping giants fight for the skies, benefits are being reaped on the ground. Hillwood, developer of the 26,000-acre master-planned AllianceTexas development near Fort Worth, announced in June it has acquired control of 600 acres of additional contiguous land. Strategically located between Fort Worth Alliance Airport and the BNSF Railway Alliance Intermodal Facility, the new Alliance Westport property increases Hillwood’s potential for more manufacturing, large-scale logistics facilities and aviation sites adjacent to the airport’s recently expanded runways.

Alliance Westport is already home to more than 8 million square feet of industrial and aviation development, including key logistics facilities for UPS, FedEx and Amazon Air. When combined with BNSF Railway’s intermodal facility volumes, these three hubs will offer Alliance Westport customers unparalleled access to rail, highway and air shipping options, all within a one-mile radius. The railway and roads have direct routes to Mexico and expedited transit times to the West Coast ports of Los Angeles and Long Beach.

“This is one of the most significant land acquisitions in the history of AllianceTexas,” says Tony Creme, senior vice president of Hillwood. “As Alliance Airport and the BNSF Railway Alliance Intermodal Facility continue to expand and strengthen the foundation for AllianceTexas’ commercial growth, this new property in Alliance Westport will serve as a strategic link between these two pieces of critical logistics infrastructure and offer unparalleled connectivity to our customers.”

 But What About the Planet?

As efforts intensify to move products faster, speedy deliveries are taking a toll on the environment, according to Patrick Browne, director of Global Sustainability at UPS

“The time in transit has a direct relationship to the environmental impact,” Browne told CNN Business on July 15. “I don’t think the average consumer understands the environmental impact of having something tomorrow versus two days from now. The more time you give me, the more efficient I can be.”

A van schlepping goods to e-commerce customer doors does remove from the road the vehicles of those who would otherwise be driving to brick and mortar stores, but a 2012 University of Washington story found that advantage is erased if the delivery route begins far away and items are coming immediately, because the ability to lump orders together is diminished. 

Last-mile services such as Amazon Flex and Walmart’s Spark Delivery often deliver only a few items at once in personal vehicles or small vans. A new option called Amazon Day, which offers discounts and rewards to customers who choose “no-rush shipping,” does allow for the consolidation of orders, however.

Amazon’s competition can take solace in the fact that Amazon was already absorbing added costs for fast deliveries before the Prime one-day announcement, which included news of an additional $800 million investment in logistics infrastructure.

UPS & CVS Pharmacy Collaborate for Customer Convenience

CVS customers now have the added convenience of utilizing recently expanded in-store UPS package pick-up and delivery options. UPS confirmed earlier this week that more than 6,000 CVS Pharmacy stores around the country will offer the service which was confirmed to roll out immediately.

“This deal offers additional convenience to consumers in the e-commerce era,” said Kevin Warren, UPS’s chief marketing officer. “Working with CVS Pharmacy demonstrates our commitment to increased customer choice and control with our global UPS My Choice® network.”

The collaboration directly impacts both companies, as it not only brings added traffic to nationwide CVS Pharmacy locations, but also provide the added option of trip consolidation for UPS customers seeking an all-in-one shopping experience.

“We will continue to bring our customers new omni channel services and experiences that redefine convenience and make it easier to meet the demands of their increasingly busy lives,” said Kevin Hourican, Executive Vice President, CVS Health and President, CVS Pharmacy. “Adding UPS Access Point locations at CVS Pharmacy locations offers added convenience in local communities throughout the country for shipping and safely receiving packages.”

By adding more locations for customers seeking convenient shipping options, UPS also adds to the UPS Access Point locations, which currently boasts more than 40,000 and 38,000 drop-boxes globally. Additionally, the collaboration impacts over 60 million UPS My Choice Program members currently customizing shipping needs. These members have direct access to the extended UPS network to for estimated arrival and progress alerts, sign for a package in advance, set vacation holds, and more.

“Until now, the UPS Access Point locations have largely been local businesses and The UPS Store® locations. With this announcement, UPS broadens our services to offer an enviable network of secure choices to busy shoppers,” Warren said. “Consumers now have access to a vast and robust suite of options that include the CVS locations, neighborhood businesses, lockers and The UPS Store centers.”

UPS Technology to save $75 million per year in 2020

As part of UPS’s On-Road Integrated Optimization and Navigation (ORION), delivery drivers will now have increased navigation visibility through the newly implemented UPSNav. This tool not only assists drivers with turn-by-turn directions, but also reduces fuel consumption, miles driven, and carbon emissions. Customers will inevitably benefit as the technology provides a streamlined approach and reduction in wasted resources.

“UPSNav is not a conventional navigation platform like those that guide most drivers in their personal vehicles from the front door of Address A to the front door Address B,” said Juan Perez, UPS Chief Information and Engineering Officer. “UPS drivers make an average of 125 stops each day. They often drive to obscure customer locations that aren’t visible from the main road. UPSNav was built for a heavy and complex UPS workload.”

The decision to implement followed a successful pilot of the tool which is estimated to save UPS up to $75 million a year. The full deployment is currently anticipated for 2020.

“I recently traveled to North Carolina to assist with package deliveries after Hurricane Florence and was assigned to a route I’d never driven before,” said Dylan Addis, a UPS delivery supervisor based near Atlanta. “But UPSNav showed me the way for every stop, and I was able to make deliveries almost as easily as I do back home.”

“This is a major advancement for UPS routing and navigation technology. It’s been very impactful,” said Jack Levis, senior program director at UPS. “The route efficiencies are undeniable, and we’re saving training costs, too. Our drivers will have the best suite of route optimization and navigation technologies in the industry.”

Source: MSL Group

AMAZON AIR ENCROACHING ON UPS & FDX AIR SPACE

“We think the market is missing the risk Amazon Air poses to UPS/FDX growth,” say researchers at Morgan Stanley. “Our work with AlphaWise shapes our analysis of AMZN Air’s impact to date and plots a potential expansion course. Lowering PTs for UPS and FDX and quantifying AMZN savings.”

Morgan Stanley notes that, for now, investors are focusing on Amazon’s last-mile efforts, but the Manhattan-based multinational bank and financial services concern believes the Amazon Air challenge is just as relevant.

“We’ve written extensively on Amazon’s build-out of its internal logistics network, but given Amazon’s plans to take delivery of 40 planes and build an air hub that could potentially handle 100 planes, we’ve taken a closer look at the impact of Amazon Air (its in-house Express Air network) on UPS/FedEx Air volumes,” state the researchers, who point to their own interactive online map.

Learn more at morganstanley.com.

UPS: Industry Leader for Third Year in a Row

Industry issues such as leadership, ethics, worker well-being, job creation, local community support, customer treatment and environmental impact are some examples of what “JUST 100” annual list identifies for companies that make the cut. For the third year in a row, UPS has made the list and was recognized as a leader within the transportation industry.

“We are humbled to be named one of America’s most JUST companies for the third year in a row,” said Tamara Barker, UPS’s chief sustainability officer and vice president of environmental affairs. “UPS and its team remain devoted to our sustainability and charitable goals that help us serve our communities and work toward a greater good.”

The results come from a comprehensive survey conducted on the country’s top 1,000 publicly-traded and the public attitudes sparked from corporate patterns.

Among the three consecutive recognitions from Forbes, UPS received four additional company acknowledgements from the Dow Jones Sustainability World Index, CR Magazine, Civic 50 list, and Barron’s inaugural list for the 100 Most Sustainable Companies, all in the same year.

UPS is projecting the successful completion of 20 million volunteer hours by 2020, as originally planned. Additionally, the company is an active participant in reducing GHG emissions as they strive towards a 12 percent decrease by 2025 for global ground operations.

Source: EIN Presswire 

 

UPS Offers Strategy Initiatives for Success

Global shipping company UPS offers three strategic tips to remember when re-evaluating changes and improvements needed for warehouse and distribution efforts. The first is to “Break the Inertia” through an open-minded look into the current state of operations. Just because operations are running up to par does not mean there isn’t room for improvement and efficiencies. Again, they warn to proceed with caution. It’s a fine balance between evaluating what’s not working and applying a new strategy and not going idle.

“Very often we see companies overhaul their operations in response to some kind of catalyst,” said Nancy Pagely, UPS development director. “But making changes without a clear strategy increases the chances of taking a costly wrong turn.”

The second strategy offered focuses on the importance of the customer and providing a sense of “ease, convenience and flexibility.”

Bhadra states that, “It’s really critical that operators set aside the knowledge they’ve amassed on customers in order to get a fresh look at what’s going on out there. It takes unconventional thinking and a broader set of collaborators to make smart changes.”

The final piece of advice is taking an honest assessment of your company and don’t let the fear of failure determine your company’s next steps.

“Understanding where you want to be can reduce the number of doors to look behind before making decisions and investments,” explains UPS Customer Solutions consultant Mark Modesti. “As long as you plant a flag and build a dynamic roadmap that lets you adapt as needed, you’ll be ahead of the game.”

 

Source: UPS

UPS Supply Chain rescues a UPS still struggling with costs

Supply Chain and Freight came to the rescue for UPS in the third quarter, with a strong performance in road freight and forwarding counter-balancing profitability problems elsewhere.

For the whole company consolidated revenue increased by 7.9% year-on-year, whilst stripping-out currency fluctuations, it was up 8.4% at $17.444bn. Net Income was up 19.8% at $1.508bn, a number slightly flattered by lower income tax costs. Operating profit was only 0.7% higher.

The core US Domestic Package revenue was good at $10.437bn, an 8.1% rise. Here the underlying picture was of strong demand from internet retailing in particular enabling a better pricing environment. However operating profit fell in the third quarter possibly influenced by higher transport subcontractor costs, which for the whole group climbed by 13.6% compared to the same period last year.

International Express was not quite as strong in revenue terms, up 3% at $3.47bn. Volumes fell slightly over the quarter by 0.2% but this was balanced by higher average revenue per package. However, fuel costs and currency effects conspired to drive down operating profits by 11% to $536m.

A much better performance was recorded by the Supply Chain and Freight business. It saw profits sharply higher at $242m, a 24.1% increase on revenue up 12%. In UPS Forwarding and UPS Freight a virtuous circle of higher volumes and better utilization improved margins as did better quality products. Presumably this must have been in the face of higher underlying transport costs.

This quarter’s numbers were roughly aligned with the trends seen through the rest of the year, that of good revenue growth but difficulties with the cost base. This is especially the case in the Domestic Express segment, for the first nine months revenue is up 7.2% but operating profit is down 17.8%.

The pre-Christmas period will be key to UPS in terms of whether it can match capacity to demand in both in terms of volume and cost effectiveness. UPS needs get on top of the problem of a cost base that is increasing faster than the market. A company with the resources of UPS ought to be able to achieve this.

Source:  ti-insight.com

UPS to Invest $2B in Europe, Asia and the Americas

Atlanta, GA – UPS has committed to investing $2 billion over the next five years in an expansion to its global infrastructure in Europe, Asia and the Americas.

The global package delivery giant announced its new investment strategy at a recent investors’ meeting where it disclosed intentions to inject 4.5 to 5 percent of its annual revenue from 2015 to 2019 in building its network in the named regions in a major effort to “improve the profitability of its e-commerce deliveries.”

According to a statement released by the company, UPS intends to grow total revenue by 5-7 percent per year, and operating profit by 8-11 percent per year. It wants to increase its US domestic revenue by 5-6 percent every year through 2019, and operating profit by 8-10 percent annually.

“UPS is a strong company that has proven its ability to adapt,” said UPS CEO David Abney.

Customer needs, he said, “continue to change, and we’re changing with them by offering new and innovative solutions.”

The delivery firm expects online shopping to account for 51 percent of its U.S. domestic volume by 2019, up from 46 percent this year.

UPS says its On-Road Integrated Optimization and Navigation (ORION) system should reduce an average of seven to eight miles traveled from daily driver routes.

The company is attempting to make lightweight e-commerce packages more lucrative, boosting delivery density by using the new ORION route software and by pricing items by dimension as well as weight.

Technology-optimizing routes and improved planning would translate into lower costs per package, UPS said, adding that ORION is already in use by 22,000 UPS drivers and its full deployment should be complete by 2016.