United Parcel Service

United Parcel Service
United Parcel Service, Inc.
Type Public company
Traded as NYSEUPS
Industry Courier
Founded Seattle, Washington (1907)
Headquarters Sandy Springs, Georgia (U.S. state)
Key people Scott Davis (Chairman & CEO)
Products Courier express services
Freight forwarding services
Logistics services
Revenue increase US$ 49.545 billion (2010)[1]
Operating income increase US$ 5.874 billion (2010)[1]
Net income increase US$ 3.488 billion (2010)[1]
Total assets increase US$ 33.597 billion (2010)[1]
Total equity increase US$ 8.047 billion (2010)[1]
Employees 400,600 (December 2010)[1]
Subsidiaries The UPS Store
UPS Supply Chain Solutions
UPS Capital
UPS Airlines
UPS Express Critical
UPS Freight
UPS Logistics
UPS Mail Innovations
UPS Professional Solutions
Website UPS.com

United Parcel Service, Inc. (NYSEUPS), typically referred to by the acronym UPS, is a package delivery company. Headquartered in Sandy Springs, Georgia, United States, UPS delivers more than 15 million packages a day to 6.1 million customers in more than 220 countries and territories around the world.[2][3][4]

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.


Company structure

UPS's primary business is the time-definite delivery of packages and documents worldwide. In recent years, UPS has extended their service portfolio to include less than truckload transportation (primarily in the U.S.) and supply chain services. UPS reports their operations in three segments: U.S. Domestic Package operations, International Package operations, and Supply Chain & Freight operations.

U.S. Domestic Package

U.S. Domestic Package operations include the time-definite delivery of letters, documents, and packages throughout the United States.

International Package

International Package operations include delivery to more than 220 countries and territories worldwide,[4] including shipments wholly outside the United States, as well as shipments with either origin or distribution outside the United States.

Supply Chain & Freight

Supply Chain & Freight (UPS-SCS for UPS Supply Chain Solutions) includes UPS's forwarding and contract logistics operations, UPS Freight, and other related business units. UPS's forwarding and logistics business provides services in more than 175 countries and territories worldwide, and includes worldwide supply chain design, execution and management, freight forwarding and distribution, customs brokerage, mail and consulting services. UPS Freight offers a variety of less than truckload (“LTL”) and truckload (“TL”) services to customers in North America.

Other business units within this segment include The UPS Store and UPS Capital.[5]

  • August 28, 1907: founded the American Messenger Company in Seattle, Washington, capitalized with $100 in debt.
  • 1913: The first delivery car appears, a Model T Ford. Casey and Ryan merge with a competitor, Evert McCabe, and form Merchants Parcel Delivery. Consolidated delivery is also introduced, combining packages addressed to a certain neighborhood onto one delivery vehicle.
  • 1918: Charles W. Soderstrom, is recruited and helps manage the company's ever-growing fleet of delivery vehicles.
  • 1919: Service begins in Oakland, California. The name United Parcel Service is adopted. The first official logo is released.
  • 1930: A consolidated service begins in New York City, and began operations soon after in other major cities in the East and the Midwest. First mechanical system for package sorting. Accountant George D. Smith joins the company. The name United Parcel Service is adopted all over the country. All UPS vehicles are then painted the familiar Pullman brown, chosen because it was considered neat, dignified, and professional. Headquarters move to New York City.
  • 1937: The UPS logo is revised for the first time; it now includes the tagline "The Delivery System for Stores of Quality".
  • 1940–1959: Services are expanded by acquiring "common carrier" rights to deliver packages between all addresses, any customer, private and commercial.
UPS Boat on Canal Grande, Venice, Italy
  • 1952: Blue Label Air established.
  • 1961: Renowned graphic designer Paul Rand creates the iconic third logo for UPS. The shield represents stability and integrity, and the bow on the box represents the package service.
  • 1975: UPS moves its headquarters to Greenwich, Connecticut. UPS begins servicing all of the 48 contiguous states of the USA. UPS also establishes Canadian operations in 1975. On Feb. 28, UPS Ltd. (later changed to UPS Canada Ltd.) begins operations in Toronto, Ontario with a single delivery vehicle. UPS Canada's head office is located in Mississauga, Ontario.
  • 1976: UPS establishes itself in Europe with a domestic operation in West Germany. Blue Label Air.
  • 1982: UPS Next-Day Air Service is offered in the US and Blue Label Air becomes UPS 2nd Day Air Service.
  • 1988: UPS Airlines is launched.
  • 1991: UPS moves its headquarters again – to suburban Atlanta, Georgia.
  • 1992: UPS acquires both Haulfast and Carryfast and rebrands to UPS Supply Chain Solutions. Haulfast provides the pallet haulage and trunking network for the CarryFast group of companies.
  • 1995: UPS acquires SonicAir to offer service parts logistics and compete with Choice Logistics.
  • 1997: Teamsters strike shuts down UPS.
  • 1998: UPS Capital is established.
  • 1999: UPS acquires Challenge Air.
  • November 10, 1999: UPS becomes a public company.
  • 2001: UPS acquires Mail Boxes Etc. and re-brands to 'The UPS Store'.
  • In March 2003, UPS unveils a new logo, replacing the iconic package and shield originally designed in 1961 by Paul Rand.
  • 2004: UPS enters the heavy freight business with the December 20 announcement of the purchase of Menlo Worldwide Forwarding, a former subsidiary of Menlo Worldwide. UPS rebrands it as 'UPS Supply Chain Solutions'. The purchase price is US$150 million and the assumption of US$110 million in long-term debt.
  • August 5, 2005: UPS announces that it has completed its acquisition of less-than-truckload (LTL) trucking company Overnite Transportation for US$1.25 billion.[6] This was approved by the FTC and Overnite shareholders on August 4, 2005. On April 28, 2006, Overnite officially becomes UPS Freight.
  • October 3, 2005: UPS completes the purchase of LYNX Express Ltd, one of the largest independent parcel carriers in the United Kingdom, for £55.5 million (US$97.1 million) after receiving approval for the transaction from the European Commission. The first joint package car center operation, in Dartford, Kent, is opened in 2006.
  • August 28, 2007: United Parcel Service celebrates its 100th anniversary.
  • June 2009: United Parcel Service lobbies to have language added to the FAA Reauthorization Act. FedEx runs a negative ad campaign called Brown Bailout.


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

Historically, the bulk of UPS's competition came from inexpensive ground-based delivery services, such as Parcel Post (USPS) or Choice Logistics. 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,[7] a program that allows UPS to pick up mail and transfer it to a USPS center, or destination delivery unit (DDU),[8] for final distribution. This process is also known as zone skipping,[9] long used by Parcel Consolidators.[10]

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,[11] 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.

Characteristic features

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 1919 when the company was American Messenger Company. In 1937, the logo was redesigned to reflect the company's new name United Parcel Service.[12] All four designs for the logo shared the shield theme, and UPS employees often refer to the brand mark as "the shield."


The brown color that UPS uses on its vehicles and uniforms is called Pullman Brown. The color is also mentioned in their former advertising slogan: "What can Brown do for you?"[13] Originally founder James E. Casey wanted the trucks to be yellow, but one of his partners, Charlie Soderstrom stated they would be impossible to keep clean, and that Pullman railroad cars were brown for just that reason.[14]


UPS commissioned brand consultancy FutureBrand to develop their own font, UPS Sans, for use in marketing and communication material. UPS Sans was created by slightly altering certain parts of FSI FontShop International’s font FF Dax without permission. This has resulted in an agreement between FSI FontShop International and FutureBrand to avoid litigation.[15]


Package cars

UPS package car from rear quarter. US variant, Corpus Christi, Texas
Mercedes Sprinter-based package car in London. The van carries the logo of the London 2012 Olympics, to show that UPS is a sponsor of the games
A UPS trailer parked in Durham, North Carolina

The UPS package car (or van) is a major symbol of the U.S. business world, with its iconic status referenced in an early-2000s ad campaign following UPS' sponsorship of Dale Jarrett in the NASCAR Sprint Cup Series: the ads were about how the company would prefer to race the truck over a stock car despite the futility of doing so, as "people love the truck".

The classic UPS package car is built on a General Motors or Ford chassis, has a manual transmission, manual steering, and no radio or air conditioning. The older ones are easily recognizable due to their round headlights and turn signals set onto a sculpted fiberglass hood. These are either Grumman Olson or Union City Body P-500, P-600, or P-800 step vans (a recent redesign changed the look, replacing the round turn signals with ovoid LED ones). The cars lack manufacturer's name or badges.

Newer package cars in North America have either a Freightliner Trucks or Navistar International chassis; automatic transmissions and power steering are slowly appearing in package cars. UPS also operates Mercedes-Benz Sprinter box vans (occasionally with Dodge badges) as well as Dodge Grand Caravan minivans.

UPS has ordered Modec electric vans for its UK and German fleets. Energy costs play a huge part in the potential profitability of package delivery companies like UPS, DHL and FedEx.[16]

When UPS ground vehicles reach the end of their useful service life and are no longer roadworthy (typically 20–25 years or more, but generally when the body's structural integrity is compromised), they are almost always stripped of reusable parts, repainted in household paint to cover up the trademark, and then sent to the scrapyard to be crushed and broken up. The only exception to this policy is when a package car is repainted white for internal use, usually at a large hub. Prior to scrapping, UPS trucks and trailers are assigned an ADA (Automotive Destruction Authorization) number and must be crushed under supervision of UPS Automotive personnel, which records the vehicle's destruction, as UPS does not re-sell any of its ground vehicles.

When using non-proprietary vehicles such as Ford E-Series vans, Dodge Caravans, or Mercedes-Benz Sprinters, UPS will often remove the vehicle badging as to not provide free advertising to the manufacturer.

Other trucks

UPS commonly refers to its tractor-trailers as "feeders". The tractors are painted the same Pullman brown as the package cars, while all company-owned trailers are painted gray. UPS trailers come in a variety of lengths. The shortest trailers (also known as "pups") are 28 feet (8.5 m) long; longer trailers come in lengths of 45, 48 or 53 feet (16 m). Towing two of the short trailers in tandem are referred to as "double pups." There are three different types of feeders — Flatbed, Drop Frame, and Trailer-on-flatcar (TOFC); the latter are put onto railroad cars.

Tractors are usually made by International or Mack, but a few Ford, Sterling, and Freightliner tractors are in the fleet. Past makes in the fleet include Chevrolet, GMC, and Diamond REO. In keeping with "no free advertising", the same is done with the "feeder" trucks as with the package cars; all make and model badges are removed from the vehicle. At one time, UPS used electric-powered trucks, made by White Motors, for deliveries in Manhattan, NYC. There were only a few hundred of them, but they were notable for their "spooky silence" when running.


In 2008, UPS started hiring bike delivery people in Vancouver, Washington; Portland, Salem, Corvallis, Antelope, Eugene, and Medford, Oregon.[17]


UPS contracts with several railroad companies in the United States to provide intermodal transport for their cargo.

Other codes

  • Trailer /Railroad reporting marks: UPGX, UPGZ, UPOZ, UPSZ, UPWZ, UPSC[18]

Operating subsidiaries and alliances

ANA/UPS – All Nippon/United Parcel Deal

All Nippon Airways, a Star Alliance member, and UPS have formed a cargo alliance and code-share to transport member cargo, similarly to an airline alliance.[19][20]

Personnel structure

Larger UPS package vehicles custom made by Grumman Olson
Smaller UPS package vehicles on a Mercedes-Benz Sprinter chassis
A Boeing 747 in the original UPS Airlines colour scheme in 1998
A UPS Airlines McDonnell Douglas MD-11F aircraft just after takeoff in 2007

UPS employs approximately 425,300 staff, with 358,400 in the U.S. and 67,300 internationally. Approximately 240,000 UPS drivers, package handlers and clerks are represented by the International Brotherhood of Teamsters. The company has had only one nationwide strike in its history, which occurred in 1997, lasting 16 days.[21]

Chief executives

  • 1907–1962 James E. "Jim" Casey
  • 1962–1972 George D. Smith
  • 1972–1973 Paul Oberkotter
  • 1973–1980 Harold Oberkotter
  • 1980–1984 George Lamb
  • 1984–1990 John W. Rogers
  • 1990–1997 Kent C. "Oz" Nelson
  • 1997–2001 James P. Kelly
  • 2002–2007 Michael L. "Mike" Eskew
  • 2008 – present Scott Davis[22]

System design

The UPS Parcel Network is based on a hub and spoke model. UPS operates centers that 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 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-flatcar in most cases) to the North Bay, California hub in San Pablo, California, where it would then be forwarded to the delivery center, loaded onto the delivery vehicle, and transported to its final destination.

The UPS 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, Washington to Atlanta, Georgia, would be loaded onto an air container at Boeing Field just south of Seattle and flown to the UPS Air Hub at Chicago Rockford International Airport in Rockford, Illinois. 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.

UPS Store pricing for non-UPS products

Although The UPS Stores provide UPS shipping at regular UPS rates, The UPS Stores have been sometimes criticized for providing United States Postal Service (USPS) services at prices higher than consumers would have paid for the same services directly from the postal service. The UPS Store allows individuals to ship via USPS at varying rates that are not the retail rates the post office charges; this is viewed as more of a convenience fee (akin to paying a slightly higher price for groceries at a convenience store). USPS rules allow third party stores to charge extra costs that they deem necessary. Instead of waiting on longer lines in the post office, customers are able to ship a package via USPS service in a UPS Store.“I think there’s a natural assumption on the part of the consumer that if you’re sending something through the U.S. Postal Service, even when it’s from another store, you’re not paying more, and if you are paying more, it’s just a pittance,” said Tod Marks, a senior editor at Consumer Reports.[23][24]

Over the years, the UPS Stores’ own corporate press releases and website have not indicated that stores charge extra costs for services above the normal rates charged by the USPS.[25][26][27] Cash register receipts that include postal product include wording that a surcharge may have been applied.

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 5% GST on the item in Alberta, Saskatchewan, Manitoba, and Quebec and higher rates of HST (Harmonized Sales Tax) in eastern Canada, Ontario (13% HST), and British Columbia, plus a C$5 handling fee collected by the Canada Border Services Agency (CBSA) on behalf of Canada Post. This applies for mailed items greater than C$20 and gifts less than C$60 in value;[28] 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.[29] 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.[30][31][32][33][34][35][36]

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[37] alleges that the UPS brokerage is "so harsh and adverse as to constitute an unconscionable practice."[38]

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."[39]

It is possible for the recipient to avoid these brokerage fees if the parcel is being shipped by a UPS "express" (premium) service,[29] that is, another service other than UPS Standard (Ground). Fees may also be avoided if the recipient clears the parcel themselves at a CBSA office.[40]

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.[41] (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 minimizing left turns. Because drivers are idle at intersections while waiting to make left turns, UPS developed software that routes the day's packages with preference to right turns. Since UPS operates a fleet of over 100,000 ground vehicles,[42] the fuel savings are considerable. In 2005, UPS eliminated 464,000 miles (747,000 km) from its travel and saved 51,000 US gallons (190,000 l) of fuel.[43]

UPS is also utilizing hybrid electric vehicles (HEV) for local deliveries only. 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 US gallons (170,000 l) per year.[44]

Environmental record

UPS has 94,600 vehicles in operation.[45] In May 2008 UPS placed an order for 200 hybrid electric vehicles (adding to the 50 it has currently) and 300 compressed natural gas (which are 20% more fuel efficient, and add to the 800 it already has) vehicles with from Daimler Trucks North America.[46][47][48]

UPS received a "striding" rating of 76 points out of 100 totals on the environmental scorecard by the Climate Counts Group for their efforts to lessen the company's impact on the environment.[49] UPS has also been awarded the Clean Air Excellence Award by the United States Environmental Protection Agency because of the alternative fuel program they have developed.[50]

In October, 2009, UPS became the first small package carrier to offer customers the chance to buy carbon offsets to neutralize the greenhouse gas emissions generated by the transport of their packages. Although initially only available on ups.com and to high-volume shippers, they are now widely available through UPS shipping systems and UPS Ready third party shipping systems.[51][52]

Employee theft

UPS has an ongoing history of its employees stealing firearms while in transit to licensed firearm dealers.[53] 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 and criminals stealing." UPS spokesman Bob Godlewski said.[54]

See also

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  53. ^ Hamilton, Brad (2007/04/29). "U.P.S. 'GUN THIEF' DRIVER 'TOOK PARCELS'". New York Post. http://www.nypost.com/p/news/regional/item_804L9z4jQIVd4CfLjSbLqJ;jsessionid=5A2C986654859289E69094056453BC82. Retrieved 2011/05/18. 
  54. ^ "United Parcel Service to stop ground service delivery of handgun". The Oklahoma City Journal Record. 1999/10/8. http://findarticles.com/p/articles/mi_qn4182/is_19991008/ai_n10133216/. Retrieved 2011/05/18. 

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.
  • "Driving Change: The UPS Approach to Business" Brewster, Mike and Frederick Dalzell. New York: Hyperion, 2007.

External links

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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