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20 DC VELOCITY MARCH 2017 www.dcvelocity.com
UPS launches Saturday ground service across U.S. network
For the first time in its 110-year existence, UPS Inc. has
begun regularly scheduled Saturday ground pickups and
deliveries across its U.S. network.
The announcement came as part of an investor’s day
in New York last month, where the
transport and logistics giant laid the
groundwork for what Chairman
and CEO David P. Abney called the
“most sweeping transformation of
our network” in its history. As part
of the multiyear initiative, UPS said
it would expedite the development of
a “smart logistics network” designed
to capture more share of the e-commerce shipment market, both for
business-to-business (B2B) and business-to-consumer (B2C) traffic.
The Saturday ground service is expected to cover half of
the U.S. population by the end of 2017, UPS spokesman
Steve Gaut said in an e-mail. Additional markets will come
online during 2018, Gaut said. The coverage area’s long-term scope will hinge on volume growth and the economics
of providing the service, he said.
Atlanta-based UPS began testing Saturday ground deliveries in three markets at the end of last year. It already offers
Saturday service through its air network.
With UPS providing ground pickups as well as local
sorting services on Saturdays, omnichannel retailers can
expand their “ship-from-store” models by arranging pick-
ups over the weekend for delivery the following Monday,
Gaut said. He declined to provide demand projections for
the service. “Clearly we have enough
commitments to believe there is a
good business opportunity to com-
mence Saturday service for delivery
and pickups,” he said.
UPS will use its existing resources
to launch the service, according to
Gaut. It plans to hire about 6,000
workers over the next couple of years
to support the operation, he added.
UPS, which surpassed the $60 bil-
lion revenue mark in 2016, plans to
expand its top line by 4 to 6 percent.
GIANT HUB TO OPEN IN UTAH
Separately, UPS said it would build an 840,000-square-foot
regional package-sorting hub in Salt Lake City that when
finished late next year will become one of the largest processing facilities in the company’s global network.
The facility, to be built on 160 acres at a cost of $275
million, will function as UPS’s Mountain West hub, the
company said. It will have capacity to process up to 69,000
packages per hour, according to the transport and logistics
giant. The new regional hub will complement UPS’s existing 200,000-square-foot
facility in Salt Lake City.
The project is the latest step in UPS’s
multiyear initiative to expand and modernize its physical and IT networks to
accommodate package growth and a secular change in its mix to more B2C shipments driven by surges in e-commerce volumes. Next year, the company is expected,
for the first time ever, to handle more B2C
shipments than B2B traffic.
Over the past three or so months, the
company announced plans to build facilities in Atlanta and Columbus, Ohio, and
expand its existing facility in Jacksonville,
Fla. It will also fully automate its 30 busiest
U.S. hubs, known as “tier one,” a program
that the company said will yield 20 to
25 percent in productivity improvements
per facility by the time all the work is done
in 2020.
—M.S.
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Mosley, and Abigail Wedoff.
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