Logistics and Supply Chain CompanyJoin now to read essay Logistics and Supply Chain CompanyUnited Parcel Service; or UPS; is the worlds largest package delivery company. UPS delivers more than 14 million packages a day to more than 200 countries and territories worldwide. Founded in 1907, it is headquartered in Sandy Springs, Georgia, USA.UPS employs approximately 407,200 employees, with 348,400 in the U.S. and 58,800 internationally. Between the foreign and domestic UPS employees, 215,000 are represented by the International Brotherhood of Teamsters.
In the United States, UPS has recently expanded its operations to include logistics and other transportation-related areas. UPS is well known for its brown trucks, internally known as “package cars”. The use of the term “package car” is mainly used to decrease insurance expenses. The brown color that is used on its vehicles and uniforms is called UPS Brown. This color was chosen because it was used on Pullman railroad sleeper cars, and was perceived as professional and elegant. UPS has trademarked the color brown, which prevents any other delivery companies from using it as part of their brand.
Major competitors include United States Postal Service (USPS), FedEx, and DHL. For 93 years, UPS only faced competition from USPS for the inexpensive ground-based delivery market. However, in 2000 FedEx expanded into the ground market by acquiring RPS (originally Roadway Package System) and rebranding it as FedEx Ground. In 2003 DHL acquired Airborne Express. This increased DHLs presence in the United States, which adds more competition to the ground delivery market.
One hundred years ago, UPS started as the American Messenger Company. Before the trucks; and the patent brown; there were just two men running a very small business out of a basement office in downtown Seattle. At first the American Messenger Company responded to telephone calls received at their basement headquarters for tasks such as errands and package delivery. They often carried notes, baggage, and trays of food from restaurants. Most deliveries were made on foot, or bicycles for longer trips. Automobiles were not yet a common commodity at that time, and department stores still used horses and wagons for merchandise delivery. It would also be six years before the United States Parcel Post system would be established. A few years later, when UPS acquired trucks, they painted each one a different color, so that everyone would know that there was more than one.
The UPS and TWA business was based in Seattle, California, and that first truck was owned by Otto Wooten, and in 1942, the business moved to Seattle, where it was incorporated as Seattle’s TWA-USA.
One other company that had a big commercial headquarters was the Northwest Seattle Post Company. I think this is an example of the first commercial truck that came to attention after WWII. This truck was a small business truck. It had no real business plans at all, except for towing a box of clothes for customers. But after WWII, when a truck is getting started by using a different name, it makes sense for it to have been called Northwest Seattle Post. The truck still had no name before 1942; and a few years into WWII, it had become a major business.
The Tacoma-Washington Post (which is now a non-profit corporation) was set up in 1943 as a “B-52 for the USA”. Its first truck to ship was a B-52, but it was actually built in 1942 by a group of members of the Northwest Seattle Post Company that included the United States Postal Service, Oregon Railway, and the United Stations of the Washington D.C. Military District (the Washington D.C. depot system). The Tacoma-Washington Post (then a non-profit corporation) was set up in 1943 as a “B-52 for the USA”. Its first truck to ship was a B-52, but it was actually built in 1942 by a group of members of the Northwest Seattle Post Company that included the United States Postal Service, Oregon Railway, and the United Stations of the Washington D.C. Military District (the Washington D.C. depot system).
Although there are so many factors in their business decisions, I believe it is important to note that this does not mean they did not consider them as good choice. Some of their main criteria include their business acumen, organizational commitment, and focus on their customer experience. Their main role, also, is marketing the products and service they offer. Not only are these three criteria significant, they also determine whether or not shipping is more important to the customer than to the company. In case you are not aware of the factors, let me just describe them:
• Cost. The cost of shipping can vary by size and type of truck. As illustrated in the diagram below, you can see from the above images that most of the shipping costs go to the bottom, while shipping is the primary source of revenue. It is simply possible that they have chosen to use lower than usual shipping costs such that it takes out less of shipping cost. As a rule of thumb, more expensive shipping reduces the total cost of shipping.
• Revenue (in US Dollars): The cost of delivering mail will be proportional to the shipping costs of the original products.
• Size. As seen in the diagram below, it’s likely that freight cost will be one or the other of the main factors that affect the cost of shipping. These factors include the overall shipping cost, the weight of packages, how long each package is in storage, transportation to and from warehouses and other facilities, and its impact on the company.
One of the main factors limiting a company’s ability to successfully scale and build in order to become successful is price. Here is a screenshot of some of those factors we will analyze.
• Cost of Maintenance. The cost of maintaining the truck will likely be
UPS is now celebrating its 100th anniversary, and has only been advertising nationally since the early 1980s. The Brown of today was built through the strength of vision, a strong sense of service, and responsibility. Jim Casey found UPS in August of 1907. Mr. Casey understood from the very beginning that with all things being equal, it would be the peoples perception that would make or break you. Jim Casey was UPSs first and the longest-serving Chairman and CEO, of which he was one of the four original founders of UPS. In 1907, Mr. Casey borrowed $100 to start the American Messenger Company. Early placards for the American Messenger Company were a simple affair: the companys name, a phone number, and a slogan: “best service, lowest rates”.
Mr. Casey was aware of the effect appearance had on the business. He was also aware that quality, and customers perceptions of quality, could be the one thing that UPS had to offer that other companies did not. With that in mind, he understood that quality meant different things to different people. He was open to customers own interpretations of what factors were most important to them, such as such as schedule, courtesy, or cleanliness.
As automobiles were becoming more accessible to the everyday individual, the messenger business was steadily declining. The young company decided to focus on package delivery for retail stores, and also began to use motorcycles for some small business deliveries. For about two years, the companys largest client was the United States Post Office, for which UPS delivered all special delivery mail entering Seattle. During that period the company began using a consolidated delivery system, that combined packages to a certain neighborhoods onto one delivery vehicle. Around 1913 UPS acquired its first delivery car, a Model T Ford, and on its side was inscribed a new name: Merchants Parcel Delivery. The new name was the result of Jim Caseys agreement to merge with competitor Evert McCabe. The name reflected a shift in the primary focus of the business from messages to packages. The business began to grow quickly, and because of its high standard of service and personalized attention to every package handled, the company built a strong reputation among the stores in the city. By 1918, three of Seattles largest department stores had become regular customers, disposing of their own delivery cars and turning business to Merchants Parcel Delivery.