UPS Invests $30M in IT to Speed Package Delivery

Automated system will plan loading of trucks, driver routes


United Parcel Service Inc. last week said it's starting to roll out a $30 million package-flow system that was designed to help 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.

Smart Technology

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. In addition, it will also 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.

Although UPS currently uses bar code scanners to help sort packages in its delivery hubs, planning routes is a manual process that relies on complicated paper charts. Jack Levis, director of industrial engineering at UPS, said the new system will store routing data electronically and provide workers with automated truck-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 shipment information ahead of time, delivery planners could adjust the loads and routes of drivers to optimize delivery efficiency. For example, if a driver has to make an extra-large delivery, some of the work on his route could be diverted to others.

'Touchless' System

Jackie Wood, a UPS systems engineer, said the software will also provide drivers with a delivery manifest for the first time. 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 LANs 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, Barnett said.

Copyright © 2003 IDG Communications, Inc.

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