In an effort to slash costs, United Parcel Service Inc. is spending $20 million to develop logistics software that will aggregate ZIP code information and map out how packages should be loaded onto trucks for the most efficient deliveries. The software, which is connected to a database containing customer and U.S. Postal Service information, will generate new shipping labels that include information a customer may forget to fill out, such as a ZIP code, and drive automatic sorting machines that will put packages on pallets in the most efficient order for loading.
The system is expected to reduce errors and cut the time it takes to train package handlers from months to weeks. "We'll realize significant, tangible savings," UPS CIO Ken Lacy says. With trucks loaded more precisely, UPS, which handles more than 13 million packages per day worldwide, also hopes to save as much as 14 million gallons of fuel per year by reducing the distances covered by its drivers by 100 million miles.
Lacy says the system will be fully deployed at all UPS facilities by 2005.