Business Management Article – January 31, 2008

UPS reported a fourth-quarter (2007) net loss of $2.58 billion, compared with a net profit of $1.13 billion, a year earlier. The quarterly loss was mainly due to a $6.1 billion pension-related charge.

United Parcel Service Inc (UPS), the world’s largest package delivery company has come a long way from being a private messenger and delivery service in 1907 to becoming an integrated supply chain management and logistics solutions provider. It has been so successful in transforming itself from a small regional parcel delivery service into a global company that today (like FedEx), UPS is seen as an indicator of U.S. economic health. The reason of course is that companies and consumers ship more packages in a healthy economy.

A bit of UPS History

In 1907, James E. (“Jim”) Casey (James Casey) felt that there was an increasing need for private messenger and delivery services. Casey started his company in Seattle, Washington and named it ‘American Messenger Company’. In 1913, Casey merged his company with a competitor, Evert McCabe, to form Merchants Parcel Delivery (MPD). In 1919, the name was changed to United Parcel Service when the company made its first expansion beyond Seattle to Oakland, California. ‘United’ implied that operations in various cities were part of the same organization, ‘Parcel’ identified the nature of the business, and ‘Service’ what was offered.

By 1992, UPS was delivering 11.5 million packages and documents a day for more than one million regular customers to more than 200 countries. In 2002, this figure reached more than 13 million packages and documents per business day with delivery volume, 3.4 billion packages and documents.

UPS – Many firsts

In 2007, UPS became the first package carrier to offer its customers a paperless international shipping option as well as a package return capability to 98 countries and territories. But the series of firsts started much before. In 1922, UPS became one of the few companies in the United States to offer common carrier service, a service that many other private carriers, or even the parcel post did not offer. Common carrier service was like retail store delivery service and mainly featured automatic daily pickup calls, acceptance of checks made out to the shipper in payment of C.O.D.s, additional delivery attempts, automatic return of undeliverables, and streamlined documentation with weekly billing. In 1924 UPS introduced the first conveyor belt system for handling packages. In 1995 UPS acquired a company called SonicAir, making UPS the first company to offer same-day, “next flight-out” service and guaranteed 8 a.m. overnight delivery…