Company Profile:: Overview
Company Profile:: Overview
Overview:
United Parcel Service, Inc. (“UPS”) was founded in 1907 as a private messenger and
delivery service in Seattle, Washington. Today, they are the world’s largest package
delivery company, a leader in the U.S. less-than-truckload industry and a premier
provider of global supply chain management solutions. They operate one of the largest
airlines in the world, as well as the world’s largest fleet of alternative-powered vehicles.
They deliver packages each business day for 1.6 million shipping customers to
9.9 million receivers ("consignees") in over 220 countries and territories. In 2019, they
delivered an average of 21.9 million pieces per day, or a total of 5.5 billion packages.
Total revenue in 2019 was $74.094 billion. They serve the global market for logistics
services, which includes transportation, distribution, contract logistics, ground freight,
ocean freight, air freight, customs brokerage, insurance, and financing. They have
three reporting segments: U.S. Domestic Package and International Package, which
together they refer to as their global small package operations, and Supply Chain &
Freight.
UPS Strategy:
Their market strategy is to provide customers with advanced logistics solutions made
possible by a broad portfolio of differentiated services and capabilities expertly
assembled and integrated into their customers’ businesses. This approach, supported
by their efficient and globally balanced multimodal network, enables them to deliver
value to their customers and thereby build lasting partnerships with them. Customers
are able to leverage their broad portfolio of logistics capabilities comprised of: their
balanced global presence in North America, Europe, Middle East, Africa, Asia Pacific
and Latin America; reliability; and industry-leading technologies and solutions expertise
for competitive advantage in markets where they choose to compete. They continue to
invest in the expansion of the UPS business to serve their existing and prospective
customers with a full range of advanced logistics products, services and capabilities
across an ever-increasing geographical and industry footprint. Achieving their objectives
has required new methods and innovative approaches to logistics services, including
the acquisition and creation of platform-based businesses, specialized healthcare
services such as Marken’s clinical trial capabilities, a full range of brokerage and
transportation insurance services, retail offerings such as UPS My Choice and more.
They aim to be a disciplined and focused business that purposefully reinvests capital to
achieve both long-term strategic benefits and favorable returns. In September 2018,
they communicated their commitment to continuous transformation to modernize their
business and operations through state-of-the art technology. They see transformation
as an ongoing commitment to enhance quality and efficiency as they deliver innovative
capabilities and services. Their strategic investments are primarily focused in areas they
believe will drive growth and lasting profit potential:
Their global small package operations provide time-definite delivery services for
express letters, documents, small packages and palletized freight via air and ground
services. They serve more than 220 countries and territories around the world along
with domestic delivery service in more than 50 countries. All their package services are
supported by numerous shipping, visibility, and billing technologies. They handle all
levels of service (air, ground, domestic, international, commercial, and residential)
through one global integrated pickup and delivery network. They combine all packages
within their network, unless dictated by specific service commitments. This enables one
UPS driver to pick up customers’ shipments for any of their services at the same
scheduled time each day. Additionally, their wholly owned and partnered global network
offers roughly 150,000 entry points where customers can tender a package to them at a
location or time convenient to them. This combined network includes UPS drivers who
can accept packages provided to them, UPS drop boxes, UPS Access Point locations,
The UPS Store locations, authorized shipping outlets and commercial counters, alliance
locations and customer centers attached to UPS facilities. Compared to companies with
single service network designs, their integrated network uniquely provides operational
and capital efficiencies while being more environmentally friendly. They operate one of
the largest airlines in the world, with global operations centered at their World port hub
in Louisville, Kentucky. World port sort capacity has expanded over the years due to
volume growth and centralization efforts. Their European air hub is in Cologne,
Germany, and they maintain Asia Pacific air hubs in Shanghai, China, Shenzhen,
China, and Hong Kong. Their regional air hub in Canada is in Hamilton, Ontario and
their regional air hub for Latin America and the Caribbean is in Miami, Florida.
The following business units report in the Supply Chain & Freight segment:
o Forwarding. They are one of the largest U.S. domestic air freight carriers
and among the top international air freight forwarders globally. They offer
a portfolio of guaranteed and non-guaranteed global air freight services.
Additionally, as one of the world’s leading non-vessel operating common
carriers, they provide ocean freight full-container load, less-than-container
load and multimodal transportation services between most major ports
around the world.
o Truckload Brokerage. Coyote Logistics Midco, Inc. (“Coyote”), a U.S.-
based third-party logistics provider, was acquired in August 2015. They
successfully integrated this large-scale truckload brokerage and
transportation management services operation into their Supply Chain &
Freight segment and have seen significant synergies in the areas of
purchased transportation, backhaul utilization, technology systems and
industry best practices. In addition, in 2018, Freightex, a U.K.-based
freight brokerage firm, was acquired and rebranded to Coyote Logistics.
The Coyote Logistics European division complements UPS’s North
American truckload brokerage business, as many international shippers
know and trust the Coyote truckload product.
o Distribution. They provide value-added fulfillment and transportation
management services to customers through their global network of
company-owned and leased distribution centers and field stocking
locations. They leverage a global network of more than 900 facilities in
more than 100 countries around the globe to ensure products and parts
are in the right place, at the right time.
o UPS Mail Innovations. Offers an efficient, cost-effective method for
sending lightweight parcels and flat mail to global addresses from the U.S.
They pick up customers’ domestic and international mail, and then sort,
post, manifest and expedite the secured mail containers to the destination
postal service for last-mile delivery.
o UPS Freight. Offers regional, inter-regional and long-haul less-than-
truckload (“LTL”) services, as well as full truckload services, in all 50
states, Canada, Puerto Rico, Guam, the U.S. Virgin Islands and Mexico.
o UPS Capital. Offers a range of services, including export and import
financing to help improve cash flow, risk mitigation offerings to protect
goods, as well as payment solutions that help speed the conversion cycle
of payments.
o Customs Brokerage. UPS is among the world’s largest customs brokers
by both the number of shipments processed annually and by the number
of dedicated brokerage employees worldwide. They provide their
customers with customs clearance, trade management and international
trade consulting services.
Competition:
UPS is a global leader in logistics. They offer a broad array of services in the package
and freight delivery industry and compete with many different local, regional, national
and international logistics providers. Their competitors include worldwide postal
services, various motor carriers, express companies, freight forwarders, air couriers and
others, including startups that combine technology with crowdsourcing to focus on local
market needs. Through their supply chain service offerings, they compete with several
providers in the supply chain, financial services and information technology industries.
Competitive Strengths:
Global Network. They believe that their integrated global ground and air network
is the most extensive in the industry. They provide all types of package services
(air, ground, domestic, international, commercial and residential) through a single
pickup and delivery service network. They also have extensive air freight, ocean
freight, ground freight and logistics networks that provide additional capabilities in
the global transportation and logistics market. Their sophisticated engineering
systems allow them to optimize their network efficiency and asset utilization on a
daily basis.
Global Presence. They serve more than 220 countries and territories around the
world. They have a significant presence in all of the world’s major economies.
Cutting-Edge Technology. They are a global leader in developing technology that
helps their customers enhance their shipping and logistics business processes to
lower costs, improve service and increase efficiency. Technology powers virtually
every service they offer and every operation they perform. Customer need drives
their technology offerings. They offer a variety of online service options that
enable their customers to integrate UPS functionality into their own businesses
not only to send, manage and track their shipments conveniently, but also to
provide their customers with better information services. They provide the
infrastructure for an internet presence that extends to tens of thousands of
customers who have integrated UPS tools directly into their own websites.
Broad Portfolio of Services. Their portfolio of services helps customers choose
the delivery option that is most appropriate for their requirements. Increasingly,
their customers benefit from business solutions that integrate many UPS services
beyond package delivery. For example, their supply chain services – such as
freight forwarding, truckload brokerage, customs brokerage, order fulfillment and
returns management – help improve the efficiency of the supply chain
management process.
Customer Relationships. They focus on building and maintaining long-term
customer relationships. They serve 1.6 million shipping customers and more than
9.9 million delivery customers daily. Cross selling small package, supply chain
and freight services across their customer base is an important growth
mechanism for UPS.
Brand Equity. They have built a leading and trusted brand that stands for quality
service, reliability and service innovation. The distinctive appearance of their
vehicles and the professional courtesy of their drivers are major contributors to
their brand equity.
Distinctive Culture. They believe that the dedication of their employees comes in
large part from their distinctive “employee-owner” concept. Their employee stock
ownership tradition dates back to 1927, when their founders, who believed that
employee stock ownership was a vital foundation for successful business, first
offered stock to employees. To encourage employee stock ownership, they
maintain several stock-based compensation programs.
Financial Strength. Their financial strength gives them the resources to achieve
global scale; to invest in employee development, technology, transportation
equipment and facilities; to pursue strategic opportunities that facilitate their
growth; to service their obligations and to return value to their shareowners in the
form of dividends, share repurchases and steady share growth.
Name Designation
Carol B. Tomé Chief Executive Officer
Norman M. Brothers, Jr Chief Legal and Compliance Officer
Nando Cesarone President, U.S. Operations
Philippe Gilbert President, Supply Chain Solutions
Kate Gutmann Chief Sales and Solutions Officer, Senior
Vice President, UPS Healthcare and Life
Sciences Unit
Laura Lane Chief Corporate Affairs, Communications
and Sustainability Officer
Brian Newman Chief Financial Officer
Juan Perez Chief Information and Engineering Office
Scott Price President, UPS International
Charlene Thomas Chief Human Resources Officer
Carol B. Tomé UPS Chief Executive Officer
Kevin Warren Chief Marketing Officer
Board of Directors:
Name Designation
Rodney C. Adkins Former Senior Vice-President, IBM
Eva Boratto Executive Vice President and Chief
Financial Officer, CVS Health
Michael J. Burns Former Chairman, Chief Executive Officer
& President, Dana Corporation
Wayne Hewett Senior Advisor to Permira, and Chairman
of DiversiTech Corporation and Cambrex
Corporation
Angela Hwang Group President, Pfizer
Biopharmaceuticals Group
William R. Johnson UPS Chairman and Former Chairman,
President & Chief Executive Officer, H.J.
Heinz Company
Ann M. Livermore Former Executive Vice President,
Hewlett-Packard Company
Rudy H.P. Markham Former Financial Director, Unilever PLC
Franck Moison Former Vice Chairman, Colgate-
Palmolive Company
Clark T. Randt, Jr. (Sandy) Former U.S. Ambassador to the People's
Republic of China, President of Randt &
Co. LLC
Christiana Smith Shi Former President of Direct-to-Consumer,
Nike, Inc.
John T. Stankey Chief Executive Officer, AT&T Inc.
Carol B. Tomé UPS Chief Executive Officer
Kevin M. Warsh Former Member of the Federal Reserve
Board of Governors, Fellow, Hoover
Institution, Stanford
History Timeline:
In 1907, two teenage entrepreneurs created what would become the world's largest
package delivery service. Starting in a Seattle basement with a $100 loan, Claude Ryan
and Jim Casey opened the American Messenger Company. With telephones and
automobiles scarce, the company fulfilled a range of tasks, from running errands and
carrying notes on foot or on bicycle, to making home deliveries for drugstore customers.
Their fledgling business entered a competitive marketplace, facing numerous firms that
also specialized in message and parcel delivery.
The young company's visionary leaders saw a new opportunity to promote their
business, and ultimately persuaded retailers to outsource delivery services to their
company. The executives had to create an element of trust and credibility for the retail
stores to agree, and those businesses had to overcome faith in their own systems in
order to cede to a third party. In 1918, three of Seattle's leading department stores
became customers, abandoning their own internal delivery efforts, and turning over
business to Merchants Parcel Delivery.
Geographic expansion emerged as a bold new opportunity for the company. Through
the end of the 1920's, UPS expanded its retail delivery service to encompass all major
cities along the coastline of the Pacific U.S., including San Francisco, San Diego and
Portland, Oregon. In spite of the economic conditions after the U.S. stock market crash
of 1929, UPS expanded eastward the following year, opening operations and moving its
headquarters to New York City.
The expansion effort was fraught with challenges. Strict state and federal regulations
limited access and entry to major markets. In some instances, shippers were required to
transfer a package between several carriers before it reached its final destination. UPS
faced unprecedented legal battles to obtain the proper certification to operate over
areas wide enough to satisfy growing public demand for its unique services. Over the
course of 30 years, UPS pursued more than 100 applications for additional operating
authority. By winning these challenges, UPS effectively laid the groundwork for other
delivery companies to compete in the marketplace. In 1975, UPS became the first
package delivery company to serve every address in the 48 continental United States.
This momentous convergence of service areas became known within UPS as the
"Golden Link".
With increasing public demand for quicker service, UPS entered the overnight air
delivery business. By 1985, UPS Next Day Air service was available in all 50 states and
Puerto Rico. That same year, UPS introduced international air package and document
service between the U.S. and six European nations. In 1988, UPS won approval from
the Federal Aviation Administration (FAA) to operate its own aircraft, thus launching
UPS Airlines. Organized in slightly more than one year with all the needed technology
and support systems, UPS Airlines was the fastest airline start-up in FAA history.
Today, it is one of the world's largest airlines.Currently, UPS runs an international
package and document network in more than 220 countries and territories. With its
worldwide services, UPS moves over 15 million packages through its network each
business day.
While embracing new technological and strategic business developments, UPS also
took a bold financial step for an established company. On November 10, 1999, UPS
offered 10 percent of its stock to the public for the first time. This initial public offering
gave UPS the ability to use a publicly traded security to make strategic acquisitions.
Prior to this, UPS had been owned primarily by management employees, a practice
established by Jim Casey in the 1920s when he gave staff the opportunity to purchase
company shares.
Over the past 100 years, UPS has become an expert in transformation, growing from a
small messenger company to a leading provider of air, ocean, ground, and electronic
services. The most recent public change came in 2003, when the company introduced a
new brand mark, representing a new, evolved UPS, and showing the world that its
capabilities extend beyond small package delivery. The company went another step
further, adopting the acronym UPS as its formal name, another indicator of its broad
expanse of services. Ever true to its humble origins, the company maintains its
reputation for integrity, reliability, employee ownership, and customer service. For UPS,
the future promises even more accomplishments as the next chapter in the company's
history is written.
2015: UPS ranked in top 10 in six categories in Logistics Management’s 32nd Annual
Quest for Quality Awards.
2016: UPS is ranked No.1 in Transport Topics’ annual issue of Top 50 Logistics
Companies in North America.
2017: UPS Again Chosen One of the “World’s Most Admired” Companies.
2020: UPS was named to OMNIKAL's Omni50 Award, which is the top 50 THEM
corporations who are awarding the most business to entrepreneurs from the growing
culturally diverse marketplace.