The Retail Era
The fledgling company soon began to focus on package delivery for retail stores, and in 1913 Jim merged with a competitor, Evert ("Mac") McCabe, to form Merchants Parcel Delivery. By 1918 three of Seattle's largest department stores were regular customers. Also by then, Charles W. ("Charlie") Soderstrom had joined the firm, and he helped manage the company's growing fleet of delivery vehicles. During this period, the company also pioneered the concept of consolidated delivery -- combining packages addressed to a certain neighborhood onto one delivery vehicle. This way, manpower and motorized equipment could be used more efficiently.

Expansion
The decades of the 1920s and 1930s were characterized by growth, ingenuity, and change. The company extended operations to Oakland, California, and later to Los Angeles -- then the fastest growing city in America. In 1929, the company opened United Air Express, offering package delivery via airplane to major West Coast cities, and as far inland as El Paso, Texas. (Due to the 1929 stock market crash and a failing economy, the air service was discontinued after only eight months.) The 1930s brought more growth. By this time, UPS provided delivery services in all major West Coast cities, and a foothold was established on the other end of the country with a consolidated delivery service in the New York City area. Many innovations were adopted, including the first mechanical system for package sorting, and a 180-foot-long conveyor belt installed in Los Angeles. During this time, accountant George D. Smith joined the firm and helped make financial cost control the cornerstone of all planning decisions. The name United Parcel Service was adopted. "United" because shipments were consolidated, and "Service" because, as Charlie Soderstrom observed, "Service is all we have to offer." All UPS vehicles were painted the now-familiar Pullman brown color, selected by Charlie Soderstrom because it was neat, dignified, and professional.

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NATIONWIDE GROWTH

Common Carrier Services
Trends during the 1940s and 1950s prompted UPS to redefine itself. With the fuel and rubber shortages during World War II, retail stores began to encourage customers to carry home their packages, rather than have them delivered. This trend continued after the war as much of the population began migrating into the suburbs, where large new shopping centers with ample parking nearby, made it easy for customers to drive home their own packages. By the early 1950s it was clear that contract service to retail stores was limited, and UPS managers began looking for new opportunities. They decided to expand their services by acquiring "common carrier" rights to deliver packages between all addresses -- for any customer, private or commercial. This decision placed UPS in direct competition with the US Postal Service.

The Golden Link
While broadening its services, UPS was also expanding into new territories. Today, fast, convenient delivery service is available coast-to-coast and around the world. But in the 1950s, UPS was restricted from operating in many parts of the country. So, a package might need to be transferred between several carriers before reaching its final destination. Federal authority was needed for each state border that was crossed, and each state had to grant permission for the movement of packages within its borders. Over the next three decades, UPS systematically fought to obtain authorization in all 48 contiguous states, and in 1975, forged the "Golden Link" that made national parcel delivery service a reality. To maintain its goal of "Best Service and Lowest Rates" in spite of rapid growth, UPS increasingly relied on a long-held formula: an efficiently engineered system operated by quality people. UPS managers and engineers developed methods and technologies to transport packages as quickly, reliably, and efficiently as possible. At the same time, providing service over such a broad area required radical changes in planning and equipment, including a return to delivery by air.

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AIR TRANSPORTATION

Taking Off
In 1953, UPS resumed air service, offering two-day service to major cities on the East and West coasts. Packages flew in the cargo holds of regularly scheduled airlines. Called UPS Blue Label Air, the service grew, until by 1978 the service was available in every state, including Alaska and Hawaii. The demand for air parcel delivery increased in the 1980s, and federal deregulation of the airline industry created new opportunities for UPS. But, deregulation caused change, as established airlines reduced the number of flights or abandoned routes altogether. To ensure dependability, UPS began to assemble its own jet cargo fleet -- the largest in the industry. With growing demand for faster service, UPS entered the overnight air delivery business and by 1985, UPS Next Day Air service was available in all 48 states and Puerto Rico. Alaska and Hawaii were added later. That same year, UPS entered a new era with international air package and document service, linking the US and six European nations.

UPS Airline
In 1988 UPS received authorization from the FAA (Federal Aviation Administration) to operate its own aircraft, thus officially becoming an airline. Recruiting the best people available, UPS merged a number of cultures and procedures into a seamless operation called UPS Airline. UPS Airline was the fastest-growing airline in FAA history, formed in little more than one year with all the necessary technology and support systems. Today, UPS Airline is among the ten largest airlines in the US. UPS Airline features some of the most advanced information systems in the world, like the COMPASS (Computerized Operations Monitoring, Planning and Scheduling System) which provides information for flight planning, scheduling, and load handling. The system, which can be used to plan optimum flight schedules up to six years in advance, is unique in the industry.

International Growth
In the 1980s UPS entered the international shipping market in earnest, establishing a presence in an increasing number of countries and territories in the Americas, Eastern and Western Europe, the Middle East, Africa, and the Pacific Rim. Today, UPS operates an international small package and document network in more than 185 countries and territories, spanning both the Atlantic and Pacific oceans. With its international service, UPS can reach over four billion people, double the number of people who can be reached by any telephone network.

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TODAY & TOMORROW

Embracing Technology
By 1993, UPS was delivering 11.5 million packages and documents a day for more than one million regular customers. With such a huge volume, UPS relies on technology to maintain efficiency, to keep prices competitive, and to provide new customer services. Technology at UPS spans an incredible range, from specially designed package delivery vehicles, to global computer and communications systems. For example, UPSnet is a global electronic data communications network that provides an information processing pipeline for international package processing and delivery. UPSnet, which has more than 500,000 miles of communications lines, including a UPS satellite, links more than 1,300 UPS distribution sites in 46 countries. The system tracks 821,000 packages daily. Between 1986 and 1991, UPS spent US$1.5 billion on technology improvements, planning an additional US$3.2 billion to be spent over the next five years. These improvements are aimed at both efficiency and expanded customer service.

Expanded Services
In the mid-1980s, UPS shifted its emphasis from operations efficiency and reliability to a customer orientation, focusing primarily on customer needs. Today, UPS provides many customer information services, such as TotalTrack and MaxiShip. TotalTrack, based on a nationwide cellular mobile data system, can instantly provide customers with tracking information for all bar-coded air and ground packages. MaxiShip is a computer-based system that lets customers manage the entire distribution process, from the rating and zoning of packages, to preparation of user-defined management reports. Meanwhile, UPS has continued to expand its basic services, from pricing and service options, to whole new categories of business. For example, Inventory Express is a contract logistics management service in which UPS stores the customer's merchandise, then ships it as needed ... "just in time." Even more far-reaching is UPS Worldwide Logistics, a comprehensive consulting service in which UPS assembles services based on the customer's individual needs, which might include freight payment, customs clearance, warehousing, carrier selection, rate negotiation, tracking, information systems, Electronic Data Interchange, fleet management, order processing, and inventory control.

The Future
UPS is not just in the delivery business, but in the customer satisfaction business, and customer needs will continue to be the company's driving force. The highest priorities for UPS over the next five years will be to deploy technology that will allow UPS to continue introducing new services, to provide customers with comprehensive information about their shipments, and to provide training so all employees will clearly understand UPS services, the technologies that make them possible, and be able to communicate that information to the customer.

UPS People
UPS believes that its most valuable asset is loyal and capable people. The dedication of UPS people is achieved through two long-standing company policies: employee ownership and training. UPS stock is primarily owned by the managers and employees of UPS. This promotes excellent service because every manager and employee stockholder is working for his or her own business. Since the beginning, UPS has been committed to training. Training activities started by the founders continue, including the James E. Casey Scholarship program, the UPS Foundation, and the UPS Urban Internship program through which forty UPS managers and supervisors are sent each year on month-long community internships.

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HOW UPS WORKS

Pickup
Every day, customers around the world rely on UPS to ship 11.5 million packages and documents. Whether it's bound for the other side of town, or the other side of the globe, each package passes through the UPS network, which has been carefully engineered to provide speed, reliability, and efficiency. The first step in the process is pickup. UPS delivery drivers are assigned a specific route, making regularly scheduled stops along the route. Typically, the driver delivers packages in the morning, and picks up packages in the afternoon. Large-volume customers, who might ship thousands of packages a day, may have a UPS tractor trailer stationed on site. Lower-volume customers, who might ship as few as 2-5 packages a week, are served by the familiar UPS package car. Customers with urgent shipments of Next Day Air letters or packages can call UPS for On-Call Air Pick Up. Using state-of-the-art communications technology, On-Call Air dispatchers locate the nearest package car and electronically dispatch it to the customer location for "just in time" pickup. Occasional customers can drop off their packages at conveniently located UPS letter centers and service counters.

The Hub
To transport packages most efficiently, UPS has developed an elaborate network of "hubs" or central sorting facilities located throughout the world. Each hub is "fed" by a number of local operating centers, which serve as home base for UPS pickup and delivery vehicles. Each afternoon, packages from the local operating centers make their way to the hub, usually by tractor trailer. At the hub, packages are carefully unloaded, thousands of packages at a time from numerous trailers. In one huge but fast-paced operation, the packages are sorted by ZIP code and consolidated on conveyor belts. Packages bound for a specific geographical region are all consolidated on the same conveyor belt. At the other end of the hub, packages undergo a finer sort and are routed to either an out-bound trailer, or for a local delivery, to a package car serving the immediate area. Before being loaded, each package is checked one last time, just to make sure it has been sorted correctly.

Feeder Network
To transport packages between hubs, UPS uses the ground feeder network. Every day, feeders, or tractor trailers, transport thousands of packages from the hub where the package originated, to the hub nearest the package's destination. Several types of trailers are used, depending on typical load. They range in size from 24 to 45 feet in length, and carry as many as 1,800 packages. Trailers are specially designed for maximum package security and easy loading/unloading. Their unique features include "roll backs" (rollers that allow packages to be moved more easily from front to back) and "drop frames" (which allow smaller packages to be securely stored at the bottom of the trailer). With innovations such as these, a skilled UPS loader, working alone, can completely pack a 24-foot trailer in just one hour!

Delivery
Each UPS driver delivers up to five hundred packages a day, including express packages which must be delivered by 10:30 a.m. To consistently handle such a large volume, the process requires careful planning and teamwork. At the hub, when packages are loaded onto package cars for local delivery, they are loaded in the same order in which they will be delivered. This process is called the "preload." By delivering packages in sequence, from one address to the next closest address, drivers complete their routes as quickly and productively as possible. Each driver is assigned a specific route, or "loop." To optimize the driver's effectiveness, UPS industrial engineers continually research and analyze delivery trends and traffic patterns for each route. When the package is delivered, technology helps ensure that the package has arrived at the correct address, and provides customers with useful information. Using a hand-held computer device called a DIAD (Delivery Information Acquisition Device), the driver electronically captures information about each package, including the time of delivery, and even the signature of the person receiving the package. This information is transmitted via cellular telephone directly from the package car to UPS computers, where it is available for customers to trace their packages or to verify proof of delivery.

UPS Air
Along with shipments moved by ground, UPS handles an average 1.3 million air packages each day, including Next Day and 2nd Day Air packages and documents. To accommodate this volume, UPS uses a system of "air hubs" located around the world. At the main UPS air hub in Louisville, Kentucky, over 60 airplanes land and take off each night. Between 10 p.m. and 2:20 a.m., hundreds of thousands of packages must be unloaded from the aircraft, sorted, then routed to the appropriate ground or air feeder. By midnight, the process is well under way, and UPS aircraft begin taking off at the brisk rate of one every two minutes. The UPS fleet consists of Boeing 727, 747, 757, 767, and DC-8 aircraft which fly packages daily to over 390 domestic airports and more than 219 international airports. The 757/767 Package Freighters, customized according to UPS specifications, are among the most technologically sophisticated and quietest commercial aircraft ever built. And, with highly efficient engines installed on other UPS aircraft, the UPS fleet is one of the most efficient in the sky.

International Delivery
As businesses increasingly compete in the global marketplace, UPS is there to help, providing delivery and information services to expedite international shipments and to simplify the process of conducting business overseas. For example, with the UPS global information network, and the UPS Prealert system, customs officials in the US and many other countries can be informed about an incoming shipment while it is still en route. And, in most cases, customs clearance is granted by the time the package arrives. Another UPS service, Consolidated Clearance, lets international shipments be combined and cleared by customs in batch, then delivered to individual consignees. UPS customers can choose from a variety of international services, including Two Day International Express, Three-to-Five Day Expedited service, and Overnight Courier service. And, UPS international customer service representatives are available 24 hours a day to help track shipments and confirm deliveries around the world.

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