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About United Parcel Service Co.

UPS is the world's largest package deliverer, transporting nearly 21 million packages and documents per business day (more than 5 billion a year) throughout the US and in over 220 countries and territories. It deploys a fleet of approximately 123,000 cars, vans, tractors, and motorcycles, and roughly 600 aircraft for pickups and deliveries. In addition to package delivery, the company offers logistics and freight forwarding through UPS Supply Chain Solutions, and less-than-truckload (LTL) and truckload (TL) freight transportation through UPS Freight. Nearly 80% of its revenue comes from the US.

Operations

UPS has three business segments: US Domestic Package, International Package, and Supply Chain & Freight.

US Domestic Package is the company's largest business segment accounting for more than 60% of sales. This division includes 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.

International Package delivers more than 20% of UPS' sales. It offers guaranteed time-definite express options through its Express Plus, Express, and Express Saver services. The company's Supply Chain & Freight segment, which generates close to 20% of sales, includes forwarding, logistics, truckload brokerage, UPS Freight, and financial services through UPS Capital.

Geographic Reach

UPS is headquartered in Atlanta, GA (Its UPS Supply Chain Solutions group is based in Alpharetta.) and has about 2,500 operating facilities. Its US transportation hub, called Worldport, is in Louisville, KY. It also has US regional air hubs located in Texas, California, Philadelphia, Pennsylvania, and Illinois. Its European air hub is in Cologne, Germany, and it maintains Asia-Pacific air hubs in Shanghai and Shenzhen, China and in Hong Kong. A facility in Ontario is the regional air hub in Canada and UPS' Miami, FL hub covers Latin America and the Caribbean.

Almost 80% of the company's revenue is generated in the US. 

Sales and Marketing

In addition to package delivery to consumers, UPS targets B2B customers for its logistics services in industries such as health care, life sciences, government, retail, automotive, industrial manufacturing, and aerospace.

Financial Performance

UPS has enjoyed several years of steady revenue growth and solid profits. Its sales have increased 23% since 2014.

Revenue in 2018 reached a record $71.9 billion, an 8% increase compared with $66.6 billion in 2017. The year's growth was fueled by increased volume in all segments and increased sales, particularly in the retail, healthcare, and manufacturing industries. E-commerce sales continue to generate a larger percentage of the company's total growth. 

Profit was $4.9 billion in 2018, down 2% from the previous year as a result of higher operating expenses including higher pension expenses and the cost of transformation initiatives in the US (new facility and technology projects).

Cash at the end of fiscal 2018 was $4.4 billion, an increase of $598 million from the prior year. Cash from operations contributed $12.7 billion to the coffers, while investing activities used $6.3 billion, mainly for capital expenditures related to facility automation and capacity expansion projects and information technology. Financing activities used another $5.7 billion for loan payments, dividends to stockholders, and the company's stock repurchase program.

Strategy

UPS is in the midst of a transformation initiative aimed at generating higher-quality revenue and lowering operating costs through 2022. The company is expanding its logistics services business, investing in technology to improve efficiency, and expanding geographically.

UPS' extensive global reach is a selling point for its logistics offerings. The company sees a growing trend in businesses outsourcing supply chain management, viewing it as a strategic advantage. The company is focusing on expanding its logistics services and solutions targeting small- and medium-sized businesses, specifically in the healthcare and life sciences markets.

To increase its Global Business to Consumer (B2C) and Business to Business (B2B) e-commerce businesses, it expanded its network by adding more than 1.6 million square feet of distribution capacity and nearly 400,000 pieces per hour of automated sort capacity globally.

Investments in technology for improved operational efficiency include a new cloud-based transportation and warehouse management software platform resulting in better visibility and faster onboarding of customers. Investments in high-growth international markets include acquiring full ownership of its express services unit in India, creating new opportunities in this region.

For now business is booming and so is competition. UPS faces carriers such as Fedex and XPO Logistics, which also are investing to expand and improve their operations. Amazon.com is leading retailers in exploring how to handle delivery on their own. What's more, smaller companies are popping up to make final-mile deliveries.

Company Background

Seattle teens Jim Casey and Claude Ryan started American Messenger Company, a delivery and errand service, in 1907. They were soon making small-parcel deliveries for local department stores, and in 1913 changed the company's name to Merchants Parcel Delivery. Casey, who led the company for 50 years, established a policy of manager ownership, best service, and lowest rates. In 1916 new employee Charlie Soderstrom chose the brown paint still used on the company's vehicles. Service expanded outside Seattle in 1919 when Merchants Parcel bought Oakland, California-based Motor Parcel Delivery, later changing its name to United Parcel Service (UPS).

In 1930, the year after the stock market crash, UPS moved its corporate headquarters to New York City where it remained for 45 years until a move to Greenwich, Connecticut in 1975. By the 1990s, the high-cost Connecticut housing market was making it difficult for the company to attract and retain employees, so in 1991, it moved again to Atlanta to leverage its large airport and available labor market.

United Parcel Service Co.

55 GLENLAKE PKWY
Atlanta, GA 30328-3498
Phone: 1 (404) 828-6000

Stats

Employer Type: Privately Owned
Manager Information Techonology: Jeff Hanson
Tax Technology Manager: Chun Li
Business Continuity Planning Manager: Duncan Maclean
Employees (This Location): 262
Employees (All Locations): 1,096

Major Office Locations

Atlanta, GA

Other Locations

Louisville, KY