by Elizabeth Woyke
Every shift, UPS employees make countless judgment calls. A single error—tossing a parcel onto the wrong sorting lane or stowing it in the wrong truck—can throw off the entire delivery schedule.
Avoiding such blunders swiftly is vital for the company's future. E-commerce growth has pushed UPS's daily package volume to roughly 31 million shipments. Coordinating that flow is enormously complex, especially since residential drop-offs—now commonplace due to online shopping—cost more than commercial stops, where couriers typically handle multiple packages per visit.
Compounding the pressure, Amazon has signaled plans to roll out its own affordable parcel service, threatening to undercut UPS with the retailer's renowned tracking systems and machine-learning capabilities.
UPS views sophisticated data analytics as essential to meeting these pressures. Back in 2016, the firm started gathering information from across its global network. That effort has since grown into roughly 25 initiatives grouped under the banner EDGE—short for "enhanced dynamic global execution." The framework has reshaped practices ranging from how couriers load trucks at dawn to how seasonal hires are onboarded during the December rush. Eventually, sensor data will also govern the timing of vehicle washes.
Once fully rolled out, the company anticipates yearly savings between $200 million and $300 million.
Supervisors are also receiving tablet devices preloaded with navigation aids, route planning apps, and digital evaluation forms for rating drivers on service, safety, and productivity. UPS aims to mine this information for customer-experience gains. UPS (UNITED PARCEL SERVICE)
EDGE represents just one slice of UPS's broader technology roadmap spanning the 220 countries and territories it operates in. The corporation's $1 billion yearly tech outlay also funds enhancements to driver gadgets—like the portable scanners used to log packages and capture signatures—and to ORION, a routing platform ("on-road integrated optimization and navigation") that pinpoints optimal driving sequences. Additional investment flows toward automated sorting hardware inside UPS hubs and systems that shift parcels between aircraft and ground transport to slash costs and delays, according to CIO and engineering chief Juan Perez.
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UPS began installing plastic Bluetooth receivers inside delivery vehicles last year to slash misloads. These roughly five-inch rectangular devices latch onto truck interiors and produce a sharp alert whenever a worker stuffs a parcel into a rig headed somewhere other than the package's destination. Sliding into the right truck triggers a distinct chime that confirms a proper match. The mechanism relies on wireless exchanges between the receivers and the body- and hand-mounted scanners workers carry to read shipping labels.
Prior to this rollout, parcels received no final verification check confirming they belonged in their assigned truck. Couriers who caught the mistake mid-route had to detour or flag a supervisor for a manual swap.
The shift lets UPS cut those delays while offering customers richer shipment visibility. Each morning scan feeds the carrier's notification platform, dispatching free progress emails to opted-in subscribers. Those recipients get a heads-up that their box will land today, complete with a projected arrival window. Bluetooth beacons now cover 35 percent of American driver loops plus one German location, with rollouts planned for Canada and Britain.
A separate initiative guides temporary workers handling outbound parcels that UPS trucks collect during the day and haul to sorting hubs. From November through January, UPS brings on close to 100,000 such employees. Rather than drilling them on hundreds of postal codes, UPS armed about 2,500 of them last winter with scanners and $8 Bluetooth headsets that bark single-word instructions—"Green," "Red," or "Blue." Each hue maps to a particular conveyor lane that ferries the box deeper into the facility.
A separate big-data effort forecasts nightly volumes of undeliverable parcels for each facility, enabling managers to fine-tune staffing levels. UPS (UNITED PARCEL SERVICE)
Because deliveries still occasionally go sideways, a companion project flags managers about incoming return volumes and their timing, so they can rally adequate crews to redirect those boxes. Inputs flow from courier handhelds and the ORION platform, which debuted in 2013. The company pipes live feeds into Samsung phones carried by supervisors, rendering the information as line charts that track inbound quantities, processing velocity, and team workloads—letting leaders shift people wherever bottlenecks emerge.
Previously, supervisors leaned on historical patterns and radio chatter with drivers to estimate nightly return volumes. John Dodero, UPS's VP of industrial engineering, says the upgrade sharpens overall efficiency and accelerates delivery of wayward parcels.
Battling Amazon
Can these moves hold off Amazon should the e-tailer enter direct parcel competition, as some expect? Barbara Ivanov, a logistics authority at the University of Washington's Supply Chain Transportation and Logistics Center—a program partially backed by UPS—believes Amazon represents genuine risk. "Amazon possesses the capital and capability to spin up a brand-new freight and parcel carrier, and what makes it disruptive is that they'd build it from the ground up with technology as the backbone," she notes.
That said, Amazon's existing delivery footprint remains far thinner than UPS's or FedEx's. "Amazon maintains solid urban coverage by hiring van-based contractors for short hops," Ivanov explains. "But to function as a major parcel carrier, you need global reach, and those networks are incredibly costly to construct and sustain."
Thomas H. Davenport, a Babson College academic who researches corporate analytics initiatives, argues UPS holds more logistical depth than commonly appreciated. "EDGE is the newest chapter in a long lineage of ambitious, sustained UPS technology investments—from route optimization to truck telematics—with each layer building on what came before," he observes.
Amazon retains an edge in artificial intelligence, a gap UPS is scrambling to close. In 2017, the parcel giant launched an advanced technology group probing AI applications. "Eventually, AI will be woven into EDGE," Dodero says. "Our engineers are already crafting algorithms to identify the ideal daily task assignments."
Could that effort arrive too late? "UPS must marshal every bit of technology, analytics, and AI it can muster to square off against a player like Amazon," Davenport concludes.
