United Parcel Service – one of the world’s largest express carrier and package delivery service provider– reported its highest fourth-quarter earnings recently. Founded in 1907 as a messenger company in the United States, the company, which is also recognized as a major provider of supply chain management solutions, has overcome its on record despite the given competition. Delivering more than fifteen million packages a day to over 6.1 million customers – both, national and international; they have reported big earnings this time.
This is a great deed, especially after the two consequent fall – outs within a span of three years – both of which were in holiday seasons:
The first one took place in December, 2013 when many customers and investors were left disappointed because of not receiving their package on time. The majority of them had to spend their New Year without gifts. This was primarily because UPS, due to late e-commerce orders, couldn’t on time fulfil all the demands of their customers.
So as to not let this happen again, UPS overspent in preparing for the same demand. Another reason why they decided to take this step is because they wanted to compensate for the inconvenience, as well. However, none of this took place.
They did come back with a bang last year. But, with a result of ninety – eight percent on – time successful delivery, they were merely able to cope up for the lost favor of the customers.
The CFO of Atlanta-based UPS, Richard Peretz believes that the success of the company truly just lies in the hands of the type of technology being put to use.
For instance, in 2013, the company used a platform called Orion (On-road Integrated Optimization and Navigation), which implemented for providing customized online map data and delivery details. The platform was used to make the delivery process more efficient and convenient. In addition, UPS also puts ‘My Choice’ into practice. This chargeless account service enables customers to choose when and where the packages need to be delivered. The simplified service is specifically designed to deliver one hundred percent convenience to its users.
“My Choice’ is one of the biggest differentiators for UPS. We’re really giving convenience, choice, and control of the transaction to the end users that hadn’t been in the marketplace. There are 21 million people that are communicating with us now through UPS MyChoice,” said Peretz.
UPS has also been putting conscious effort into expanding their reach, especially in the European market since they led a profit of almost sixteen percent in the fourth quarter.
“We’ll be spending over $2 billion to continue to build capacity across the European continent,” he said.
Among the many competitors of UPS are: DHL, FedEx and Amazon (AMZN). Amazon has developed its own delivery routes, thus enabling the operation process to be of maximum productivity. However, Peretz denied all such claims of affecting UPS.
“The Amazon relationship is mutually beneficial, and they are a valued customer to UPS,” he says. “The whole space of e-commerce is a great position for UPS because we want to become the shipper of choice. We’re adding things to the market that didn’t exist before.”