Logistics Design Alternatives to United Parcel Service

Decent Essays
The United Parcel Service is one of the largest companies in the global courier delivery service industry, with a net income of about $3 billion and revenues exceeding $53 billion. Headquartered in the United States, a large part of UPS’s market share and revenues come from the business it conducts in Europe. The logistics design of UPS has three distinct functions, consolidation, distribution, and fragmentation. Consolidation is the collection of parcels to then be sent to distribution. Distribution works on a hub-to-hub basis with distance determining what mode of transportation will be used (Air or Ground). Fragmentation is the final design step in the UPS logistics design, combined with consolidation for the most part; this function is where products are delivered to their final destination. These basic functions have kept UPS a world leader in the logistics field and well ahead of their competitors. Benjamin Franklin once said “Without continual growth and progress, such words as improvement, achievement, and success have no meaning” (Brainy quote, 2014). UPS is continually striving to improve their logistical operations. With over 90,000 ground vehicles in the UPS fleet, it is hard to imagine how much money they are spending on gasoline. The fragmentation and consolidation function of UPS make up the majority of the vehicle usage within UPS, they have set fuel-efficiency goals for their fleet aiming for a 20% increase in MPG between the years 2000 and 2020.
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