UPS highlights various drivers for strong holiday season delivery performance efforts

Atlanta-based transportation and logistics bellwether UPS said this week that its on-time delivery performance for this year’s holiday season is seeing very strong results, due, in large part to what it called an unprecedented capacity expansion, as well as various new technology upgrades.

These things, as well as greater customer collaboration, improved network resource utilization, new automated capacity, and global employee dedication, were cited by Big Brown as drivers for the optimal holiday season performance it has delivered this year.

“During this critical period, we are pleased to be in a position to help even more customers attain their growth goals,” said UPS Chairman and CEO David Abney in a statement. “Our transformation initiatives are enabling UPS to perform at high levels, even as we handle nearly double the average daily package volume as the rest of the year. We are confident we will sustain these high levels of service and we’re ready to take on even more customer shipments in the coming weeks.”

Increased capacity additions have received a significant amount of investment from UPS, with the company having opened 22 new or retro-fit automated facilities globally, proving 25%-35% higher efficiency.

And as reported in LM, it has opened up a new Atlanta-based Southeast Regional Hub that is a core piece of the company’s regional “super hub” efforts, with other subs to open in Dallas/Ft. Worth, Texas; Phoenix, Ariz.; Salt Lake City, Utah; and Indianapolis, Ind.

Company officials said that these new hubs offer up more options for the company to manage peak volumes, adding that these new facilities and retrofits bring more than 5 million square-feet of capacity, and also increase its flexibility and reliability, too.

What’s more, UPS said its facility expansions and retrofits have added 350,000 piece-per-hour throughout in the U.S. And its network visibility tools-including the UPS Peak Volume Alignment Tool, Network Planning Tools, and the Harmonized Enterprise Analytics Tool, among others, are some of the 20 new technologies it has introduced in advance of the holiday season that help to align volume and visibility.

The company added that the UPS network is performing at levels that are on par with non-peak volumes, at a time when it is processing record volumes, and it also said that UPS is confident in its sustained on-time performance during what it called the “critical holiday period.”

In terms of asset expansion, UPS said it has added more than 300 new package cars to its delivery fleet and also added six 747-8s and three 767-300 aircraft focused on both international capacity, as well as to enable it to provide service on key U.S. routes. UPS said it is also leasing 35 additional aircraft for the holiday season, too.

While UPS said that it is processing record volume during the holiday season and has added 350,000 piece-per-hour throughput in the U.S., a company spokesman told LM in an e-mail that it does not provide externally detailed volume numbers per day and week.

“In our Q4 earnings (Jan. 31), we will provide a recap of our peak season performance,” he said. “Regarding driving factors to UPS having a smooth first-half of peak season, it was lots of things. But comes down to continued, in-depth, coordination with our customers; investments in our facilities do increase our network capacity by about 5% compared to last year (can sort 350,000 more packages per hour this year compared to last year) and adding 5 million square feet of sorting capacity; and big investments in technology (implemented about 20 technology projects and tools that are giving UPS more precise control over our network and added flexibility to redirect volume from bottlenecks on-the-fly.”

Data provided on December 6 by ShipMatrix, a subsidiary of SJ Consulting, highlighted how UPS’s efforts for the holiday season are paying off.

For Cyber week, from November 25-December 1, ShipMatrix data showed that UPS achieved a 97.8% on-time delivery level, which nearly matched the previous week’s 98.3%, even though Cyber week had “significantly higher volume. ShipMatrix added that the delivery performance across UPS’s Express, Deferred, and Ground services were minimal.