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Shipping technology streamlines UPS' holiday rush

When Keith Short began delivering packages for UPS 23 years ago, he used bulky pads of paper to track parcels and pens that froze in the cold. Today, Short scans packages on and off his truck with a handheld computer that tells him what to deliver where and when, and can even direct him turn-by-turn.

"The whole route is in here," said Short of his handheld "DIAD" computer — short for Delivery Information Acquisition Device.

The handhelds — now in the fifth generation — have made UPS drivers' jobs more efficient, especially during the peak holiday season when UPS picks up and drops off several million packages each day.

The ideas for improving the technology percolate in the offices of UPS' Information Services Group in Timonium, Md.

A team of 80 mathematicians and engineers there makes forecasts about the shipping world of the future and works to apply those lessons to how the parcel company delivers today. Statisticians perform advanced math to figure future shipment demand, industrial engineers conduct time-flow and work-flow studies, and software designers write the programs to apply what they learn.

It all ends up in the technology behind the routing and dispatching of packages handled by the brown delivery trucks.

"It's my job to set up a road map of where we need to be and look out 10 years," said Jack Levis, an engineer and director of the group. "We're deploying things today we thought through 10 years ago, and are constantly updating, looking at where we need to be in the next five or 10 years."

Years ago, the group foresaw the growth of the Internet as a marketplace for buying and tracking goods that UPS would need to deliver, but few could have predicted exactly how e-commerce would reshape the shipping business.

Anticipating what customers will want years down the road is part of the role of UPS' "package process management group" in Timonium.

At the core of what the group oversees is something called "package flow technologies," a data project started in 2000 and first used in 2003 aimed at more efficiently moving packages through hubs and loading them on trucks. Before 2003, workers who loaded delivery trucks had to memorize up to 2,000 pieces of information and underwent six weeks of training to master the system.

While the December holiday rush always has been prime time for UPS and rival shippers, the online shopping boom has led to record-setting volume. UPS expected to see more than 69 million online package tracking requests Tuesday, the peak day for online tracking, compared to an average of 32 million requests a day.

That was followed Thursday by the busiest day of the season, when UPS expected to deliver a record 28 million packages. To keep up, the shipper has hired 55,000 seasonal workers to help drivers or sort and load packages.

The growth of online shopping also has brought rising expectations.

Consumers want free-shipping incentives, shorter delivery times and more last-minute shipping options, such as same-day shipping and even the same-day delivery that retailers such as Walmart.com have begun promoting, experts say.

To offer same-day shipping, retailers have resorted to sending packages from their store inventory rather than from a warehouse, said Al Sambar, a retail strategist with consulting firm Kurt Salmon. Those promising same-day delivery might use couriers instead of conventional delivery services such as UPS or FedEx to get it there on time, he said.

The consulting firm expects many online retailers will offer later-than-ever shipping dates, even through today, just three days before Christmas, guaranteeing Christmas Eve delivery.

"You really see the dates expanding much closer to the holiday than you would have seen in years past," Sambar said.

Shipping technology streamlines UPS' holiday rush 12/21/12 [Last modified: Friday, December 21, 2012 10:47pm]
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