Archive
January, 2010

One of the things I admire about UPS is its willingness – despite a very strong, structured culture – to embrace change when necessary.  UPS will turn 103 years old this year and in that time, it’s developed and pursued five different business plans that required transformation.

In the beginning, company founder Jim Casey set out to change the way messenger delivery companies worked.  He developed a business approach that emphasized service, well-trained and neat employees, 24-hour-a-day availability and low rates.

With the spread of telephone service, Casey realized his messenger business was doomed.  So he merged with a competing package delivery business and convinced the department stores of Seattle to rely on him to deliver goods to their customers.  This model led to a name change from the American Messenger Service to Merchants Parcel Delivery and a successful platform to grow across the country.

In the process of growing, Casey came to understand that the personal automobile and development of shopping centers would undercut the need for department store delivery services.  So he transformed again, turning UPS into a so-called common carrier, offering service to all interested parties in competition with the U.S. Postal Service.

The fourth transformation began in the 1970’s when UPS recognized the growing importance of technology and international trade.  The result was a decision to start building a platform to track packages while expanding around the world and launching its own airline.  This era would see the company ultimately build a network infrastructure to cover more than 200 countries and territories.

The fifth – and current – transformation began in 1997 and 1998 when the company conducted an extensive strategic review that took another hard look at its future.  The results pointed to a need to broaden the company’s capabilities in order to play an even more central role in helping customers grow.  In 1998, UPS changed its “purpose” in the company charter to, “We enable global commerce.”  In 1999, the company went public on the New York Stock Exchange and proceeded to acquire more than 40 companies that now form the heart of its supply chain and freight segment.

UPS Supply Chain Solutions is a streamlined organization that provides logistics, global freight, financial and mail services.  SCS and UPS Freight now are an $8.9 billion business.  And no one at UPS thinks this transformation is the last.

Germans are crazy about cars. They are, after all, the ones who invented the modern motor vehicle, and to this day Germany is known for designing and producing the best cars on the planet in terms of engineering and overall quality. It comes as little surprise then that the UPS automotive team at the Hanover hub in Germany would come up with the idea of taking a 17-year old P60 package car with 600,000 kilometres on the clock under UPS colours and turning it into the beast you see before you.

It now has a 6.3 litre V8 engine developing 425 hp and a top speed of some 190 kph/120mph, with additional modifications made to improve performance. Meanwhile, a competition was held in conjunction with the Mediadesign Academy in Dusseldorf to come up with the stunning graphics that adorn the bodywork. The finished article was unveiled at the Essen Motorshow and has subsequently appeared at racing circuits around Germany.

Now personally, I try to do my bit for the environment. I don’t drive a hybrid to work at the UPS Europe office in Brussels because I think my bike is much greener. But I’m also a motorsport enthusiast, and yes, the thought of 425 horses slurping away at 6.3 litres of high-octane petrol beneath the bonnet of a UPS package car does get my pulse racing.

How can this be? How do I sleep at night? Don’t I realise that V8s are the devil’s own work? The reason is simple. Not only is motorsport beautiful – man and machine at the very limits of their mutual prowess – but it is also responsible for many of the developments that make modern motoring so much more efficient than it was, say, 30 years ago. Formula 1 is the proving ground for technology that eventually makes its way into the most mundane vehicle showroom, where you will find small cars that run for kilometers on an egg cup-full of diesel. Formula 1 cars may burn fuel quicker than a small power station, but they cannot afford to waste a drop – efficiency is everything.

Which brings me back to our team of UPS mechanics and automotive experts. When they’re not putting ridiculous engines into old trucks (and let’s face it, this is not something they get to do every day), they’re using their passion and expertise to ensure that UPS package cars run cleanly, efficiently, safely and for a very long time. And as any environmentalist worth his salt will tell you, the carbon footprint of running a well-maintained, well-driven old car is tiny when compared to that of scrapping the car and buying a new one that has to be built from scratch.

So I’d like to congratulate these unsung UPS heroes. Keep inspiring us with automotive excellence, keep ensuring our fleet turns up to work each day and let’s see more of that crazy racing truck.

UPS drivers across the globe drive 3.3 billion miles per year. They average less than one accident per million miles driven – an incredible statistic. That stat is due to two things: UPS has the best safe driving training in the world, and UPS drivers take an enormous amount of pride in what they do. Training and pride – it’s an unbeatable combination. And the proof is in the pudding. This year, 934 new Circle of Honor members were added to the total of current active drivers with 25 years or more without an accident. The total number of UPS drivers who have steered clear of accidents for 25 years or more now stands at 4,788. And on top of that remarkable number, Ron Sowder of UPS’s Kentucky District has attained 48 years of safe driving. Florida’s Ginny Odom, the top female safe driver stands alone with 35 years without an accident.

What follows are comments from both drivers on what it takes to drive safely for so long.

In 2008, John Vera and Bill Torres went to Haiti to offer their logistical expertise in the aftermath of two devastating hurricanes. Touched by the experience and by the people they met two-years ago, they have signed up once again to help Haiti following the recent earthquake. John and Bill are part of UPS’s participation in the UN’s Logistics Emergency Teams, which support the World Food Programme’s disaster response. This time, they will work from Santo Domingo, Dominican Republic.

I get to work on user testing to help determine what is needed in future versions of the driver handheld devices, called DIAD (Delivery Information Acquisition Device.) And to do this we ask the experts, UPS drivers:  In January 2008 a driver survey was conducted requesting user feedback, pros and cons, concerning the DIAD IV.  The results indicated three areas of concern:  1) the placement of the signature key, due to customers inadvertently hitting this key; 2) the shifted keypad, which requires the driver to toggle between alpha and numeric characters; and 3) the size of the device, too big and too heavy. 

The next question that needed to be addressed was: does the DIAD V need to be a “custom” device or can the DIAD V be a standard off-the-shelf product?  In the past, standard products did not meet the needs of UPS, which resulted in the need (and expense) of developing a “custom” device.  Customization also requires country and regulatory certifications for the device and accessories for each country in which the equipment will be used.  Today standard products have all the components of a DIAD device plus a few newer innovations.  So, once again, the experts were consulted!  Four standard off-the-shelf devices were tested on-road by drivers at nine different locations.  The test results indicated that two of the devices tested were acceptable (and actually preferred over the DIAD IV) and two of the devices tested were not suited for the operational environment (too small with QWERTY or computer keypads). 

Based on the information provided by our drivers (the real experts), UPS contacted three major companies in the handheld device market which then responded with proposals of their standard ruggedized product(s).  In late 2009, after clarifying and negotiating changes in the proposals, the product and the vendor were selected.  Drum roll please…The DIAD V will be a standard product built by Honeywell.  The device will have a full color VGA screen and expanded radio communication coverage.  The DIAD V will be smaller and lighter than the DIAD IV, which will alleviate issues with the signature key (due to the device size, the customer’s grasp while signing the device will be different) and the DIAD V will have a full alpha numeric keypad, eliminating the shift key.

The UPS and the Honeywell project teams are currently engaged and forging ahead to begin deployment in August 2011.

UPSer Craig Arnold is on the ground in Haiti, doing his best to bring relief and comfort to this devastated nation. Here’s an update on his activities today:

Today was OK.  We are starting to send some people home and replacing them with people who will stay much longer.  Lots of trips to the airport sitting on the runway grass waiting.  That is what I’m doing know.   In the last 30 minutes I saw the military land 13 huge planes rolling off trucks and supplies.
 
The clinic is doing great.  We started construction on a classroom, built the base for a water system that arrives tomorrow, and we were given a brand new generator by someone who couldn’t use one but it was shipped to them by someone. 
 
We had a sad day to some extent.  The search and rescue team they got in last night found the body of the corps sergeant major. The assumption from a couple days ago was that he died in his car during the earthquake but now at least the family knows. 
 
We had 1 great feeding program with 10,000 people served.  Then we tried to feed the next day but the crowd was out of the control and we had to stop.  You really need 25 or 30 heavily armed solders in armored vehicles to do a distribution.  People are really getting hungry so we have to feed but we have to have security.
 
That is about it.

Today’s 6.1 aftershock in Haiti doesn’t faze UPS volunteer Craig Arnold. “No problem for me and my roommates. On the way to the clinic, school and command center to assess,” he e-mails at 6 a.m. Since last Friday, Craig has been in Port-au-Prince as a volunteer for the Salvation Army. It’s his sixth trip in five years.

Much of his days are spent dodging the debris and chaos of Haiti’s streets to retrieve relief supplies that are now arriving at the airport. In his real life in Northern California, Craig is a UPS sales director. In Haiti, he’s a driver and a logistics coordinator.

On Tuesday, Craig writes, “I spent most of the day at the airport. I picked up 7 rescue workers and their supplies and then five doctors and disaster recovery leaders.”

At the airport “we are allowed to simply drive on the grass next to the runway after we clear one check point. This makes the pickups safer…the front of the airport is not guarded and this is where you see some violence. We just drive right through and do all our business with the full protection of the 82nd Airborne,” he writes nonchalantly.

“Even though we are still doing mostly small planes, we do have a 20-foot truck and today we almost filled it with supplies. On Wednesday, we are expecting a whopper shipment of water and food.”  That’s a far cry from earlier in the week when the military was just getting the airport secure and flights were few and far between because of the inoperable traffic control center. In those days, Craig’s emails and phone calls were full of frustration about the ever growing need and the tiny trickle of supplies.

Now at the Salvation Army Headquarters, the grounds are a hive of activity. Children and families are sleeping on the lawn (a baby was born earlier this week on some of the lawn furniture). A medical clinic is operating and a feeding center has been established. “The clinic has seen more than 452 patients in 2 days and is going great. In fact, other clinics are asking about bringing their wounded to us…we did a small feeding. Nothing like the 10,000 yesterday. We hope for one of those again tomorrow.”  That feeding is dependent on a replenishment of the supplies that still are erratic.

On Monday, 8 doctors and 4 nurses arrived. “Normally we operate the clinic with one doctor and 3 nurses. The team of 8 doctors and 4 nurses includes 2 surgeons. They are all arriving on small private planes. They saw over 100 people in the first two hours. They triage in the playground and the worst cases end up in the Coleman tent.”

Craig seems to have put aside the horrors that he’s witnessed on the streets of Haiti. Now, he’s focused on the job at hand…get relief supplies distributed to the people in the most efficient way possible.

His only hesitation: “I need to do a lot of loading and unloading today. My back is older than I’d like it to be.”

Watching the pictures of the hungry people of Haiti, it’s easy to wonder why food and water aren’t yet accessible everywhere. After all it’s been nearly a week since the quake, thousands of relief workers are on the ground, and people around the world have donated money and supplies.

The reason is logistics. The Haiti relief supply chain is global and complex.  Chip Chappelle, an Atlanta-based UPS transportation manager, is spending nearly 24 hours-a-day trying to coordinate shipments of life saving food, water and medical supplies. On top of the usual complexities of international trade, these deliveries are all hampered by broken infrastructure, limited equipment, shifting supply origins and conflicting information. 

UPS has committed $1 million in cash, shipping and logistics support for three humanitarian organizations, CARE, UNICEF and the Red Cross. 

Chip is talking to his logistics counterparts at these relief agencies – in Denmark, Germany, Switzerland, the Dominican Republican and Port-au-Prince, Haiti.  He’s in touch with The UPS Foundation who has built long-term strategic relationships with the disaster relief agencies.  And he’s talking to one UPS employee who is on the scene as a private volunteer.

Today, Chip has been focused on getting the supplies to UPS flights. There are truckloads of bottled water in Florida. High-energy biscuits are in Norway. Donated underwear is in North Carolina. Blankets, tarps, water cans, tents, and hygiene kits are in route from Utah to Miami in a truck.  Other food is spread around Europe traveling to Charles de Gaulle airport in Paris.  

It’s pretty easy to load up a UPS plane with relief goods and get as close as the Dominican Republic, where we have a regular daily scheduled flight.  It would be easy to just unload the pallets and crates on the tarmac and fly away. But Chip won’t do that. “I have to know that there’s someone there to pick up the right paperwork to get it through customs, some place safe to sort it, and trucks and drivers to get it across the border to the relief centers. I have to know it will get to the Haitian people.” 

In logistics terminology, it’s called the challenge of delivering to “the last mile.”  Without planning, one distribution center might end up with all water and no food; another may have blankets and no water. If the goods get there too early, security might not be on site to protect it.

Behind Chip, more than 100 UPSers are checking the availability of ocean containers,  identifying space available on ocean vessels and UPS planes, preparing the customs documentation required to fast-clear the shipments, and locating the trucks and rail space that might be required if the goods are in the U.S. and need to get to ocean ports in Savannah or Miami.

Chip is taking his signals from the relief agencies themselves who know where their supplies are being stored, packed in pallets, and prepared for pickup.  He’s also getting information from UPSers on the scene. He knows from UPSers in the Dominican Republic that Santo Domingo has become a de facto logistics center for relief into Haiti. The reason is that the infrastructure is undamaged. Ports and airports are operating efficiently and the government is streamlining importing processes for relief shipments. It’s a 6-10 hour drive across rugged mountains to get to Port-au-Prince. Trucks and drivers are in short supply as are workers to unload goods. Congestion is growing, especially at the border where the military is recommending that armed security forces accompany each truck convoy to protect its precious cargo.  Chip knows that storage space is also being snapped up and that tents will have to be used as warehouses.

In Port-au-Prince, secure storage facilities and distribution centers are still being established.  The airport is now secured by the military and more relief flights are landing and taking off but fuel remains in short supply. Unloading equipment is there but is rudimentary.

For Chip, this mission is personal. He is doing what it takes to get the right supplies to the people who need them right now – the people of Haiti.

I was born on April 4 on the first anniversary of the death of Dr. Martin Luther King, Jr. Growing up in Atlanta, Georgia, every birthday has been a unique reminder of the teachings and legacy of Dr. King. So I thought it was a fitting honor when Dr. King’s birthday became a national holiday to celebrate the values of justice, compassion and service that he so powerfully lived by.

When the King Holiday was first observed on January 20, 1986, my friends and I decided to participate in the celebratory walk through downtown Atlanta led by Bishop Desmond Tutu of South Africa. I remember it being an extremely cold day, but that didn’t stop thousands of people from gathering. Walking with my arms linked to people from all different ages, races and nationalities, I came to truly understand the impact of Dr. King’s life around the world.

In 1994, the King Holiday and Service Act was passed which challenged Americans to transform the King Holiday into a day of citizen action volunteer service in honor of Dr. King. Through service, Americans are encouraged to make the holiday a “day on, not a day off.” Dr. King recognized the power of volunteer effort to strengthen communities and help address challenges such as poverty, illiteracy, hunger, environmental degradation and more.

As an enthusiastic volunteer my entire life, I have seen the ways that service has changed me and my community.  Over the last 10 years, I have volunteered with numerous agencies and served on the board of several local and national non-profits. One of my more unique service experiences was participating in the UPS Community Internship Program in 2002 in New York City. I spent a month living and volunteering at Henry Street Settlement on the lower east side. I’d like to believe that my efforts have made a difference and through volunteering, I have learned about the root causes of social problems, developed compassion for others and learned new skills.

Prior to my current position, I was President of The UPS Foundation and had the opportunity to champion volunteerism through grant-making, programming and by encouraging the involvement of UPS employees. Our employees contributed nearly 1.3 million volunteer hours in 2009 and the UPS Foundation donated over $800,000 to support volunteer efforts around the world. Each of us can contribute to strengthening our own communities by serving in Dr. King’s honor on the King Holiday. Even if you don’t have the day off, you can commit to volunteering throughout the year.

The King Holiday also provides a unique opportunity to teach young people about the value of volunteer engagement.  This year, on the King Holiday I will be using a vacation day to participate in a service project with young women from the Atlanta Girls School. We will be creating outdoor nature paths at a local elementary school. I look forward to helping these future leaders learn about the critical role that community service must play in the life of a responsible global citizen.

Dr. King once said, “Life’s most persistent and urgent question is, ‘What are you doing for others?’” What will you do this year to celebrate the King Day of Service?

The earthquake that hit Haiti yesterday delivered a devastating blow to the island nation. Disasters such as this remind us of our own vulnerability to the forces of nature. At UPS, we’re committed to delivering aid and supporting relief efforts around the world. Through The UPS Foundation, we’re giving $1 million (USD) in cash and in-kind aid to help the people of Haiti.

We’ve also noticed a surge of interest and concern online as people search for ways to help. On Twitter, some have mistakenly shared a rumor that UPS will ship for free any package under 50 lbs. to Haiti. The destruction of roads and communications networks means our own shipping services to Haiti are on hold. Rather than offer free shipping to individual donors, UPS directs its aid through relief agencies.

However, there are several options available to offer your help:

•  Aidmatrix and Gifts in Kind International accept cash gifts along with donations of goods from companies and organizations.
• The American Red Cross, CARE, UNICEF and Salvation Army accept cash donations.

Along with aid from The UPS Foundation, we’ll also contribute our knowledge and skills to disaster response through warehouse, transportation and distribution management. UPS participates with a team of disaster-relief logistics experts through the World Food Programme’s Logistics Emergency Teams (LETs). Through LETs, we provide “loaned” logistics experts on-site to aid with disaster response. To learn more about UPS’s commitment to global disaster relief, read Mark Dicken’s interview with UPS International President Dan Brutto.

Update: 2010-02-01 — 15:36: Added Salvation Army.