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UPS continues to shrink itself, raising eyebrows and perhaps concern along the way. After announcing it would offer buyout packages to its drivers, online publication Supply Chain Dive confirmed that it was also offering buyout packages to some of its U.S. operations managers. According to Supply Chain Dive, the move came after UPS executives said on a July 29 earnings call that employee attrition tied to 74 building closures didn’t meet the company’s expectations.
Now comes word that earlier this year, UPS outsourced its proprietary weather forecasting operations to Weather Co., parent company of the Weather Channel according to Bloomberg. UPS CEO Carol Tomé highlighted UPS’ in-house team as a strategic advantage at an investor day last year. What happened from last year?
UPS also shifted its technology support functions to third-party tech vendors and last year outsourced its chief investment officer functions to Goldman Sachs Group Inc. for certain pension portfolios.
It appears that as UPS lays off employees or outsources various job functions, it is becoming more dependent on artificial intelligence (AI) and other technology tools.
While UPS will certainly benefit from improved efficiencies, will it achieve these at the expense of customer service that it has long been known for?
In addition, will these technologies gains be passed to customers in the form of lower rates? It’s doubtful.
What does this mean for you?
I continue to be a proponent for diversification and creativity when it comes to the last-mile. Depending on your strategy, shippers may benefit from regional carriers, parcel platform technologies, a combination or other ways to manage their own last-mile deliveries.
Know Your Surcharges and Rates – July 14 FedEx Surcharges
USPS and regional carrier OnTrac have joined FedEx in announcing peak season pricing changes/surcharges.
We’re still waiting on UPS to announce their peak season surcharges.
*Reach out to me if you have any questions about these changes.
Why am I telling you this?
I’m Jay Kent, managing director of SLB Performance, a consulting firm that helps companies, like yours, reduce supply chain costs, implement BI tools, improve in-stocks and customer service. After 25 years of leading some of the most complex supply chains in the industry, I began advising companies like yours in how to mitigate costs and improve efficiencies. I am here to help you better understand the market. So twice a month, I’ll share relevant small parcel and supply chain news.
Let’s talk! An initial consultation with me will cost you nothing. Click here to schedule a call.
Look for the next Jay’s Parcel Notes, a twice a month LinkedIn newsletter for additional news and thoughts.
Jay Kent