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United Parcel Service

Coordinates: 33°56′36.16″N 84°21′34.73″W / 33.9433778°N 84.3596472°W / 33.9433778; -84.3596472
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United Parcel Service, Inc.
Company typePublic (NYSE: UPS)
IndustryAir Courier
FoundedAugust 28, 1907, Seattle, Washington
HeadquartersUnited States Georgia (U.S. state) Sandy Springs, Georgia, USA
Key people
Michael Eskew, Chairman & CEO
ProductsFreight Forwarding Services
Logistics Services
RevenueIncrease$47.547 billion USD (2006)
Increase$6.635 billion USD (2006)
Increase$4.202 billion USD (2006)
Number of employees
483,000 (2007)
SubsidiariesThe UPS Store
UPS Supply Chain Solutions
UPS Capital
UPS Air Cargo
UPS Express Critical
UPS Freight
UPS Logistics
UPS Mail Innovations
UPS Professional Solutions
Websitewww.ups.com

United Parcel Service, Inc. (NYSE: UPS), commonly referred to as UPS, is the world's largest package delivery company, delivering more than 15 million packages[1] a day to 6.1 million customers in over 200 countries and territories around the world. It has recently expanded its operations to include logistics and other transportation-related areas. It is headquartered in Sandy Springs, Georgia, USA.

UPS is well known for its brown trucks, internally known as package cars (hence the company nickname "The Big Brown Machine"). UPS also operates its own airline (IATA: 5X, ICAO: UPS, call sign: UPS ) based in Louisville, Kentucky.

UPS also owns The UPS Store (formerly Mailboxes Etc.), a franchise chain which provides shipping, packaging, and copy services.

History

  • August 28th, 1907: 19-year-old Jim Casey and 18-year-old Claude Ryan founded the American Messenger Company in Seattle, Washington with 100 borrowed dollars. The first main service was the delivery of opium, which was fully legal in the country at that time.
  • 1913: The first delivery car appeared, a Model T Ford, Merged with a competitor, Evert McCabe, and formed Merchants Parcel Delivery. Consolidated delivery was also introduced, combining packages addressed to a certain neighborhood onto one delivery vehicle.
  • 1918: A new member was recruited, Charles W. Soderstrom, who helped manage their ever-growing fleet of delivery vehicles.
  • 1919: Service turned into Oakland, California. The name United Parcel Service was adopted.
  • 1930: A consolidated service began in New York, and soon after began operations in other major cities in the east and midwest. First mechanical system for package sorting. Accountant George D. Smith joined the company. The name United Parcel Service was adopted all over the country. All UPS vehicles were then painted the familiar Pullman brown, chosen because it was considered neat, dignified, and professional.
  • 1940-1959: Services were expanded by acquiring "common carrier" rights to deliver packages between all addresses, any customer, private and commercial.
UPS Boat on Canal Grande, Venice, Italy

UPS has an ongoing history of its employees stealing firearms while in transit to licensed firearm dealers. [2][3] In 1999, in response to these thefts, UPS issued a policy that all handguns must be shipped overnight. "We're trying to protect ourselves from employees stealing," UPS spokesman Bob Godlewski said. [4]

In April 2003, UPS unveiled a new logo, replacing the iconic package and shield originally designed in 1961 by Paul Rand.

UPS entered the heavy freight business with its purchase of Menlo Worldwide Forwarding, a former subsidiary of Menlo Worldwide, and rebranding it as UPS Supply Chain Solutions. The purchase was announced on December 20, 2004; the price was US$150 million and the assumption of US$110 million in long-term debt. Menlo Worldwide was the successor of Emery Worldwide. Emery was grounded on August 13, 2001 after a DC-8-71F crashed in Northern California.

On August 5, 2005 UPS announced that it had completed its acquisition of Overnite Transportation for US$1.25 billion.[5] This was approved by the FTC and Overnite shareholders on August 4, 2005. On April 28, 2006, Overnite officially became UPS Freight.

On October 3, 2005, UPS in the United Kingdom completed the purchase of LYNX Express Ltd, one of the UK's largest independent parcel carriers, for £55.5 million (US$97.1 million) after having received approval for the transaction from the European Commission. The first joint package car centre operation, in Dartford, east London, was opened during mid-2006. Dartford Centre carries the SLIC GB1330.

UPS's Political Action Committee has been the most generous corporate giver to federal candidates for every U.S. election since 1992, donating a total of $14 million through December 31, 2005 according to Federal Election Commission records.

On April 20, 2006, UPS reported earnings per diluted share of $0.89, up 14.1% over the previous year. Results were driven by a 9% increase in global small package volume or 1.24 million packages per day, outpacing worldwide market growth.

On April 16, 2007, the East Central region started The Total Service Plan.

Competitors

Major domestic (United States) competitors include United States Postal Service (USPS), FedEx and DHL. In addition to these domestic carriers, UPS competes with a variety of international operators, including TNT N.V., Deutsche Post, Royal Mail, Japan Post, and many other regional carriers, national postal services and air cargo handlers (see Package delivery and Mail pages).

Historically, the bulk of UPS' competition came from inexpensive ground-based delivery services, such as Parcel Post (USPS). But in 1998 FedEx expanded into the ground parcel delivery market by acquiring RPS (originally Roadway Package System) and rebranding it as FedEx Ground in 2000. In 2003 DHL expanded its US operations by acquiring Airborne Express, significantly increasing its presence in the United States, and adding more competition in the ground delivery market. In response to this, UPS partnered with the US Postal Service to offer UPS Mail Innovations, a program that allows UPS to pick up mail and transfer it to a USPS center, or destination delivery unit (DDU), for final distribution. This process is also known as zone skipping, long used by Parcel Consolidators.

More recently, the continued growth of online shopping, combined with increasing awareness of the role transportation (including package delivery) has on the environment, has contributed to the rise of emerging competition from niche carriers or rebranded incumbents. For instance, the US Postal Service claims "greener delivery" of parcels on the assumption that USPS letter carriers deliver to each US address, six days a week anyway, and therefore offer the industry's lowest fuel consumption per delivery. Other carriers, like ParcelPool.com, which specializes in residential package delivery to APO-FPO addresses, Hawaii, Alaska, Puerto Rico and other US Territories, arose in response to increased demand from catalog retailers and online e-tailers for low-cost residential delivery services closely matching service standards normally associated with more expensive expedited parcel delivery.

Branding

File:Ups-logo.gif
Third UPS logo, designed by Paul Rand

Brand Mark

In April 2003, UPS unveiled a new logo, the fourth the company has used, replacing the iconic package and shield originally designed in 1961 by Paul Rand. The original logo first saw use in 1916 when the company was American Messenger Service. In 1935, the logo was redesigned to reflect the company's new name United Parcel Service. All four designs for the logo shared the shield theme, and UPS employees often refer to the brand mark as "the shield."

Brown

The brown color that UPS uses on its vehicles and uniforms is called UPS Brown, which was chosen because it is the same color that was used on Pullman railroad sleeper cars and was seen as professional and elegant. The brown color hides dirt well and was inconspicuous. This color is often erroneously referred to as Pantone color 0607298, but this is not a valid Pantone number. [6] UPS's department store customers did not want to call attention to the fact that UPS was delivering their furniture, rather than its own delivery people.[clarification needed] The color UPS Brown is trademark, which prevents other delivery companies from using it as part of their brand.

Font

UPS has also designed and trademarked a font UPS Sans for use in marketing and communication material. While similar to other sans-serif fonts in many respects, certain characters (including p, s, and u) have been stylized to match the company branding.

Uniforms

The UPS delivery driver uniform is one of the most recognized symbols of corporate America. It consists of a brown short- or long-sleeve button-up shirt or blouse with a pointed collar, front left pocket, and the company logo above the pocket. The shirt is worn with a pair of brown pants or shorts. When pants are worn, the shirttail is tucked in. All buttons, with the exception of the one on the collar, are fastened. The short-sleeve shirt can be worn with either the shorts or the pants. The long-sleeve shirt is worn exclusively with the pants. Drivers for UPS's SonicAir do not wear any uniforms and deliver in their own clothes.

Other codes

Personnel structure

Larger UPS package vehicles custom made by Grumman Olson
Smaller UPS package vehicles on a Dodge Sprinter chassis

UPS employs approximately 407,200 staff, with 348,400 in the U.S. and 58,800 internationally. In the United States, UPS requires drug testing for full time driver positions who are looking to drive feeders or any other driving position that requires a commercial driver's license, but not for drivers of vehicles not requiring a commercial driver's license. Approximately 215,000 UPS employees are represented by the International Brotherhood of Teamsters. The company had only one nationwide strike in its history, which occurred in 1997, lasting 16 days. [7]

Chief executives

System design

UPS's Parcel Network is based on a hub and spoke model. UPS operates centers which feed parcels to hubs where parcels are sorted and forwarded to their destinations. Centers typically are the point of entry for parcels and send the parcels to one or more hubs. A hub is a location where many centers send packages to be sorted and sent back out to other centers or hubs. For example, a parcel being shipped from Wilmington, North Carolina to San Francisco, California is picked up by a driver and taken to the 23rd street center in Wilmington, where it is loaded on a trailer and driven to Raleigh, North Carolina. At Raleigh, the package would join packages from all over North Carolina and be forwarded to the Chicago Area Consolidated Hub in Hodgkins, Illinois. After arriving there, it would be loaded onto a trailer and sent by rail (trailer on flat car in most cases) to the North Bay, California hub in Richmond, California where it would then be forwarded to the delivery center, loaded onto the delivery vehicle, and transported to its final destination.

UPS's air network runs similarly to the ground network through a hub-and-spoke system, though air hubs are typically located at airports so packages and planes can quickly be unloaded, sorted, and loaded again. Centers feed packages to facilities at airports (called gateways), which in turn send them to an air hub to be sorted and put on another plane to a final destination gateway, and then from there to a center. For instance, a package traveling from Seattle, WA to Atlanta, GA, would be loaded onto an air container at Boeing Field International and flown to the UPS Worldport in Louisville, KY. From there it would be sorted to a container heading to Atlanta to Hartsfield-Jackson International Airport, and taken by truck from the airport to the delivery center.

Fees for Canadians

The normal procedure for residential customers in Canada to import goods from the U.S. by mail is relatively simple; they are required to pay 6% GST on the item, plus a $5 or $8 CAN handling fee collected by the Canada Border Services Agency (CBSA) on behalf of Canada Post. This applies for mailed items greater than $20 CAN and gifts greater than $60 CAN in value[8]. However, this does not apply to items shipped by couriers such as UPS.

When delivering packages in Canada, UPS brokers or clears the item through the CBSA and transfers a cost to the buyer. [9] These fees are not disclosed at the time of purchase by the seller as many sellers from the U.S. are themselves unaware of this. [10][11][12][13][14][15][16]

As a result , there have been two class-action lawsuits filed against UPS by Canadians. The first one filed in October, 2006 by Robert Macfarlane, a resident of British Columbia [17] alleges that the UPS brokerage is "so harsh and adverse as to constitute an unconscionable practice." [18]

The second filed by Ryan Wright and Julia Zislin in Ontario claims "that UPS failed to obtain consumers’ consent to act as a customs broker; to disclose the existence and/or amount of the brokerage fee; and to provide consumers with the opportunity or disclose to them how to arrange for customs clearance by themselves." [19]

It is possible for the recipient to avoid these brokerage fees if the parcel is being shipped by a UPS "express" service [9], that is, another service than UPS Standard (Ground).

This distinction is not limited to Canada, or to UPS. As a rule, "mail" import procedures in all countries apply only to items imported by mail, i.e., originated by the exporter's local postal authority (for Canadians, commonly USPS) for delivery by the importer's local postal authority (Canada Post); they do not apply to shipments made by courier services such as UPS, FedEx, or DHL. For example, this distinction is specifically noted by U.S. Customs and Border Protection (CBP) in its website's page on Internet purchases imported into the United States; it also warns that imports by courier may come with "higher than...expected" brokerage fees that "sometimes exceed the cost of (the) purchase", and that prepaid shipping charges on imports by courier normally do not include duties or brokerage fees.[20] (The distinction may be sharper in the U.S. because CBP normally waives duties on mail imports of up to US$200 per day, but not on courier imports of any amount. Use tax, the U.S. equivalent of GST, is collected only by the states, not by CBP or shippers.) What makes this case unique is that UPS charges a substantial brokerage fee on ground shipments to Canada, when other Canadian small-package services apparently charge nothing (UPS "express" services) or a minimal fee (Canada Post).

Fuel economy

UPS Package Car.

In 2004 UPS announced that they would save fuel by making as many right hand turns as possible. Because drivers idle at intersections while waiting to make left hand turns, UPS developed software that finds the route to deliver the day's packages with the most right hand turns possible. Another advantage of making right hand turns is at stop signs because they spend less time waiting to cross several lanes of traffic when making a left. Since UPS operates a fleet of over 88,000 ground vehicles, the fuel savings are considerable. In 2005 UPS eliminated 464,000 miles from its routes and saved 51,000 gallons of fuel.[21]

UPS is also utilizing hybrid electric vehicles (HEV). As of May 22, 2007, the company has 50 deployed in Atlanta, Dallas, Houston, and Phoenix. The 50 HEVs are expected to cut fuel consumption by 44,000 gallons and 454 metric tons of CO2 emissions.[22]

Aircraft

UPS Airbus A300F4-622R

The United Parcel Service fleet consists of the following aircraft as of December 2006:

UPS Fleet
Aircraft Total Notes
Airbus A300-600R 53
Boeing 727-100C 5
Boeing 727-100F 28
Boeing 747-100F 7
Boeing 747-200F 4
Boeing 747-400F 1
(7 orders)
Boeing 757-200PF 75
Boeing 767-300ERF 32
(27 orders)
Douglas DC-8-71CF 9
Douglas DC-8-71F 11
Douglas DC-8-73CF 18
Douglas DC-8-73F 8
McDonnell Douglas MD-11 9
McDonnell Douglas MD-11F 22

United Parcel Service had ordered ten Airbus A380 freighters and had options on ten more. However, this order was canceled on March 2, 2007, one day after Airbus announced that it would halt development and production of the A380 freighter to prioritize the production of the A380 passenger version. To replace those orders, UPS may order Boeing 777 and 747-800 freighters instead.[23] UPS has also ordered eight Boeing 747-400 freighters to increase capacity on its major "trunk" routes to Europe, Asia, and North America. The first was delivered on July 19, 2007 and the latter deliveries go on through 2008.[24] Furthermore, UPS Airlines placed a firm order for 27 additional Boeing 767-300 Freighters in February 2007 to be delivered 2009 to 2012.[25]

Most UPS Airlines flights go through the UPS Worldport at Louisville International Airport, but also use hubs at Chicago/Rockford International Airport, Dallas/Fort Worth International Airport, Philadelphia International Airport, Ontario International Airport, Miami International Airport, Columbia Metropolitan Airport, and Bradley International Airport in Hartford (CT). A new UPS hub is set to be opened at Shanghai Pudong International Airport in 2008. It will link for all of China to Shanghai.[26]

Trivia

  • UPS delivered two Beluga whales from Mexico City to the Georgia Aquarium.[27]
  • UPS's total United Way of America contribution of more than $57.3 million set a new national record.[28]
  • UPS inspired the off-Broadway musical Romance on Wheels during World War II.[citation needed]
  • The body design of the "package cars" is unique to UPS, and the cars are only operated by them. Retired cars either become crew vans for use at air hubs, or are destroyed. The manufacturer's name, Grumman-Olson, is not displayed on the outside of the car. [citation needed]
  • A business biography about UPS and its founder Jim Casey: BIG BROWN: The Untold Story of UPS was published in February 2007.
  • UPS's "Whiteboard" ad campaign, which launched 6 January, 2007, features the song "Such Great Heights" by The Postal Service.[29]
  • The tops of many of UPS trucks are not painted brown but are in fact a white and translucent skylight; this allows operators to take advantage of natural light in daytime to see the vehicle's inventory.
  • UPS was one of the two main delivery services to transfer Harry Potter and the Deathly Hallows, which they delivered not only to bookstores before the book was officially released but also on July 21, 2007 to customers who had ordered their books online, the other one being the United States Postal Service who received the books directly from UPS for final delivery.

See also

References

  1. ^ "UPS Fact Sheet". Retrieved 2007-08-19.
  2. ^ "Teen gets jail term for gun theft from UPS". The Milwaukee Journal Sentinel. Retrieved 2007-08-19.
  3. ^ "UPS "Gun Thief"". New York Post. Retrieved 2007-08-19.
  4. ^ "UPS to stop handgun deliveries by ground". CNN. Retrieved 2007-08-19.
  5. ^ "UPS Completes Acquisition of Overnite". UPS Press Release. Retrieved 2007-08-17.
  6. ^ "Pantone Color Finder". Retrieved 2007-08-19.
  7. ^ "It's official: Teamsters end UPS strike". CNN. Retrieved 2007-08-19.
  8. ^ "Importing Non-Commercial Goods by Mail". CBSA. Retrieved 2007-08-19.
  9. ^ a b "UPS Rates for Customs Clearance into Canada". UPS. Retrieved 2007-08-19.
  10. ^ UPS “Brokerage fee” class-action
  11. ^ UPS Brokerage Fee
  12. ^ Canadian Customs: What's The Deal.
  13. ^ A Shipment to My Daughter
  14. ^ Why we hate UPS
  15. ^ UPS brokerage fees shock horror!
  16. ^ UPS Problems -- WARNING
  17. ^ "UPS British Columbia Class Action Lawsuit". Retrieved 2007-08-19.
  18. ^ "Statement of Claim" (PDF). p. 5. Retrieved 2007-08-19.
  19. ^ "Ontario Class-action Lawsuit". Retrieved 2007-08-19.
  20. ^ "Internet Purchases". CBP. Retrieved 2007-08-19.
  21. ^ "UPS says turning right saves time, money". Deseret News. Retrieved 2007-08-19.
  22. ^ "UPS "Green Fleet" Expands with 50 Hybrid Electric Vehicles". UPS Press Release. Retrieved 2007-08-19.
  23. ^ "UPS to Cancel Order for 10 Airbus A380 Freighters". Bloomberg. Retrieved 2007-08-19.
  24. ^ "UPS Takes Delivery of First 747-400". UPS Press Release. Retrieved 2007-08-19.
  25. ^ "UPS Places Order for 27 Boeing Freighters". UPS Press Release. Retrieved 2007-08-19.
  26. ^ "Construction Starts on UPS Air Hub in Shanghai". UPS Press Release. Retrieved 2007-08-17.
  27. ^ "How do Whales Fly?". Retrieved 2007-08-19.
  28. ^ "United Way". UPS Press Release. Retrieved 2007-08-19.
  29. ^ "Whiteboard Advertising Campaign". UPS Press Release. Retrieved 2007-08-19.

Further reading

  • "Insourcing," Thomas L. Friedman, The World Is Flat: A Brief History of the Twenty-first Century, New York: Farrar, Straus and Giroux, updated and expanded, 2006, pp. 167-176.
  • "Big Brown: The Untold Story of UPS" Niemann, Greg. John Wiley & Sons, 2007.

33°56′36.16″N 84°21′34.73″W / 33.9433778°N 84.3596472°W / 33.9433778; -84.3596472

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