Recently, UPS (United Parcel Service) released its fourth quarter report for 2024. The report shows that in 2024, UPS rode the wave of digital transformation. Through the successful implementation of the Digital Access Program (DAP), the widespread application of RFID technology, and the reconfiguration of the service network, UPS not only improved its operational efficiency, but also further consolidated its leading position in the logistics industry.
The Digital Access Program (DAP) is undoubtedly a highlight of UPS in 2024. This innovative initiative greatly simplifies the company's transportation process and provides unprecedented convenience for small and medium-sized enterprises. By providing discounted freight, seamless integration with e-commerce platforms, and flexible transportation options, DAP enables small and medium-sized enterprises to easily access UPS's advanced logistics solutions. According to statistics, in the fourth quarter of 2024, DAP generated global revenue of up to US$3.3 billion, with a year-on-year growth rate of up to 17%, injecting strong momentum into UPS's overall growth.
RFID also played an important role
At the same time, UPS has also made significant progress in the deployment of RFID technology. By equipping 60,000 US parcel trucks with RFID readers and writers, UPS has successfully achieved the transition from traditional scanning networks to advanced sensor networks. This technological innovation not only significantly reduces the need for manual scanning (reducing about 12 million manual scans per day), but also significantly improves the visibility and tracking accuracy of packages.
The application of RFID technology has brought significant efficiency improvements to UPS. On the one hand, by real-time monitoring and tracking of packages, UPS can more accurately predict the arrival time and transportation route of packages, thereby optimizing the transportation process and reducing transportation time and costs. On the other hand, RFID technology also improves the visibility and tracking accuracy of packages, allowing customers to keep abreast of the latest developments of packages, greatly improving customer satisfaction.
UPS's RFID service has significant advantages in the logistics market. By integrating RFID technology, retailers can better understand the movement of packages and better control inventory levels. This integration is particularly beneficial to retailers who rely on precise delivery windows to replenish inventory, allowing them to better respond to changes in market demand. At the same time, RFID technology has also brought more business opportunities to UPS and attracted more customers seeking efficient logistics solutions.
Strive to reduce costs and increase efficiency
In addition to technological innovation, UPS has also taken solid steps in service restructuring. Among them, the adjustment of SurePost services is particularly eye-catching. By fully controlling the part that was previously handled by the US Postal Service, UPS has further optimized its operating processes, reduced costs, and increased revenue per package. This move is an important part of UPS's "efficiency reengineering" plan and is expected to save the company up to $1 billion in costs each year.
In addition, UPS has also actively responded to market changes and adjusted its customer strategy. Although Amazon remains one of UPS's key customers, UPS is strategically reducing the number of packages it handles for the e-commerce giant. This decision reflects UPS's strategic orientation to focus on more profitable market segments. By optimizing resource allocation, UPS aims to provide customers with better quality and more efficient logistics services while achieving sustainable development of the company.
In terms of financial performance, UPS also performed well. In the fourth quarter of 2024, the company's revenue increased by 1.5% to US$25.3 billion; full-year revenue also increased slightly to US$91.1 billion. Revenue in the domestic sector increased by 2.2%, thanks to increased revenue per piece and growth in air cargo; revenue in the international sector increased by 6.9%, showing UPS's strong competitiveness in the global market.
This paper is from Ulink Media, Shenzhen, China, the organizer of IOTE EXPO (IoT Expo in China)
