UPS invests $30M in IT to speed package delivery

The automated system will plan loading of trucks and driver routes

LOUISVILLE, KY. -- United Parcel Service Inc. this week said it's starting to roll out a $30 million package-flow system designed to let the company more efficiently plan deliveries made by its 70,000 drivers in the U.S.

Cathy Callagee, the package carrier's vice president of information services, said at the UPS Technology Summit here that the package-flow project is aimed at speeding up deliveries and enabling drivers to make more stops on their routes. Callagee declined to comment about the return on investment that's expected from the software.

But UPS CIO Ken Lacy said the more efficient routing made possible by the system should reduce the mileage of the company's delivery fleet by more than 100 million miles per year, saving about 14 million gallons of fuel. UPS has piloted the software at its Roswell, Ga., delivery center and plans to deploy it at all U.S. hubs by 2005, Lacy said.

UPS is basing the package-flow system on so-called smart labels that contain bar-coded delivery information and are already used by more than 90% of its customers, Callagee said. Customers upload the information used to create the labels to a secure page on UPS's Web site before drivers pick up packages, and the data is then transmitted to the company's delivery centers. When the system is operational, the data will be used by UPS to produce a dispatch plan for each delivery route.

Callagee added that the system will also generate preloading labels for packages to aid in the loading of delivery vans. The system also will include built-in geographic information system software to help planners map out routes. The software is being written in a combination of C and C++ and will run on UPS's existing back-end systems, with end users accessing it via PCs.

Electronic advantage

Although UPS currently uses bar code scanners to help sort packages in its hubs, planning deliveries is a manual process that relies on complicated paper charts hung above the sorting stations at the company's delivery hubs. Jack Levis, director of industrial engineering at UPS, said the new system will eliminate "a knowledge barrier" by storing routing data electronically and providing workers with automated loading instructions.

UPS's package-flow system will replace some manual processes.
UPS's package-flow system will replace some manual processes.
Callagee said that by capturing information on inbound shipments ahead of time, delivery planners could adjust the loads and routes of drivers to optimize deliveries. For example, if one driver has an extra-large shipment to handle, some of the work on his route could be diverted to another driver.

Jackie Wood, a UPS systems engineer, said the software will also provide drivers with a delivery manifest -- something they have never had before. Until now, drivers determined their daily routes by checking the way packages were loaded in the delivery van, a process that required them to "touch the cardboard," Wood said.

With the new system, route information will be electronically transmitted to the handheld devices used by drivers via Wi-Fi wireless LAN networks installed at UPS's delivery centers, she noted.

Lacy claimed that the technology will provide UPS with "a distinct competitive advantage." But Traci Barnett, a spokeswoman for Memphis-based FedEx Corp., said the UPS rival already uses similar systems to capture and transmit customer delivery information to its hubs. FedEx also has route planning and mapping software in place, although it doesn't load delivery manifests on its driver terminals, she said.

Copyright © 2003 IDG Communications, Inc.

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