About UNITED PARCEL SERVICE CO.

United Parcel Service (UPS), with its ubiquitous brown, is the world's largest package delivery company, transporting more than 19 million packages and documents per business day throughout the US and to 220-plus countries. Its delivery operations use a fleet of 114,000 motor vehicles and 655-plus aircraft. In addition to package delivery, the company offers services such as logistics and freight forwarding through UPS Supply Chain Solutions, and less-than-truckload (LTL) and truckload (TL) freight transportation through UPS Ground Freight. The company traces its historical roots back to 1907.

Operations

Domestic package delivery is the company's largest business segment, accounting for about 65% of sales. International package delivery is its second largest segment, representing roughly 20% of UPS' total sales. The company also offers UPS SurePost, an economy residential ground service for customers with non-urgent, lightweight residential shipments. It acts as a contractual residential ground service that partners its UPS Ground network with final delivery often provided by the US Postal Service.

Along with logistics and trucking, the company's supply chain and freight segment, which generates the remainder of sales, includes mail expediting (UPS Expedited Mail Services) and financial services (UPS Capital) businesses, as well as postal and business services store franchiser Mail Boxes Etc., which maintains UPS Store and Mail Boxes Etc. locations in the US and overseas.

Geographic Reach

The company's international scope is immense; it serves customers in more than 220 countries worldwide. However, the US generates roughly 80% of its total revenue, while other countries account for the remainder. It has more than 2,300 operating facilities.

Sales and Marketing

UPS delivers packages each business day for 1.6 million shipping customers to 8.7 million receivers (consignees). It targets industries such as health care, government, retail, automotive, industrial manufacturing, and aerospace.

Financial Performance

UPS has enjoyed six years of steady revenue growth, with revenues peaking at a record-setting $61 billion in 2016. The historic growth for 2016 was fueled by increases from its domestic (4%), international (2%), and supply chain and freight (8%) package segments.

Business-to-consumer shipments grew nearly 9% for 2016, which drove increases in both air and ground shipments. Business-to-business volume, however, remained flat in 2016 due to the company's revenue management initiatives and the overall slowing of the industrial manufacturing sector.

The rise in ground volume in 2016 was driven by growth in residential ground and SurePost volume while business-to-business shipments remained flat. Accelerating growth in e-commerce drove demand for its SurePost service, with volume increasing 19% in 2016. Next Day Air volume spiked by 5% in 2016, due to strong growth in e-commerce. UPS also experienced increased volume for its deferred air services in 2016, particularly for products most aligned with business-to-consumer shipping.

Unlike its revenues, UPS's profits have fluctuated over the years. After climbing sharply in 2015, profits declined 29% to $3.4 billion in 2016 mainly due to an increase in operating expenses, particularly compensation and benefits.

Strategy

UPS's extensive global reach is a selling point for its supply chain management offerings, which are tailored to customers in industries such as consumer goods and retail, health care, and technology. The company is seeing a growing trend in how businesses are outsourcing supply chain management, with businesses viewing it as a strategic advantage to have effective management of their supply chains.

Package delivery revenue is increasing overseas, where UPS continues to expand through infrastructure investments and selected acquisitions. The company has completed a $200 million, 70% expansion of its European air hub in Cologne, Germany.

UPS is also experimenting with the newest innovative form of transportation: drones. With about 66,000 delivery drivers on the road each day, UPS is looking for ways to bolster efficiency in its network while also reducing carbon emissions. Throughout 2017 and beyond, it is experimenting with methods of using a drone as a supplement to its drivers, docking on a vehicle and delivering packages at the discretion of the driver.

Mergers and Acquisitions

Over the years, UPS has enhanced its operations through the use of acquisitions. In early 2017, it obtained UK-based Freightex, an asset-light provider of truckload, less-than-truckload, specialized and refrigerated over-the-road services. The acquisition established UPS' presence in the growing UK and European third-party logistics 3PL over-the-road brokerage transportation market

In 2016 the company previously enhanced its UK healthcare logistics services portfolio through the purchase of London-based Marken, a global provider of supply chain services to the life sciences industry and expert in clinical trials material storage and distribution.

The company in mid-2015 made the $1.8 billion purchase of Coyote Logistics, a Chicago-based third party logistics (3PL) company that offers truckload, less-than-truckload (LTL), and intermodal air, land, and ocean transportation services in North America and Europe. Through the deal, UPS expects to benefit from synergies in purchased transportation, backhaul utilization, and cross-selling to customers, in addition to technology systems and industry best practices.

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UNITED PARCEL SERVICE CO.

55 Glenlake Pkwy
Atlanta, GA 30328-3498
Phone: 1 (404) 828-6000
Fax: 1 (404) 828-8088

Stats

  • Employer Type: Public
  • Vice President Global Solutions and Implementations: Jan Macaulay
  • Senior Vp: Joseph R Moderow
  • Vice President and Corporate Controller: Joe Wilkins
  • Employees: 871

Major Office Locations

  • Atlanta, GA

Other Locations

  • Louisville, KY