Consultant’s Insight: Automation cuts costs, improves efficiency for UPS, FedEx

Just ahead of the peak holiday season, UPS and FedEx are showing off the automation investments they have made to help streamline their operations and deliver packages more quickly and efficiently. [caption id="attachment_76185" align="alignright" width="283"] Cathy Roberson, Cargo Facts Consulting senior consultant and Air Cargo Next columnist[/caption] “We continuously look for ways to leverage technology to improve our employee experience and increase efficiency,” UPS Chief Executive Carol Tome said in a company release. Indeed, UPS highlighted some of its recent investments in technology to target repetitive and physically demanding processes such as pick and place, loading and unloading, and moving irregularly sized shipments in the Wednesday release. UPS is using: Pick-and-place technologies from Dexterity , Fortna and Plus One Robotics to help employees sort small packages; Unloading technologies from Pickle Robot ; Automated guided vehicles from Dane Technologies , Geek+ , Locus Robotics , Crown Lift Trucks and the Raymond Corp ., a subsidiary of Toyota Industries ; and Delivery photo and DeliveryDefense technologies to decrease fraud for customers. UPS’ United States domestic team saved $889 million in expenses year over year during the company’s second quarter, Chief Financial Officer Brian Newman told analysts in August. The reduction was attributed to UPS using its technology and integrated network. For example, according to Newman, UPS’ total service plan reduced labor hours by nearly 10% while maintaining high productivity levels. In addition, it used its network planning tools to optimize flows. It redirected volume from smaller, nonautomated buildings to larger, automated facilities, thus reducing volume from nonautomated buildings by 18%, allowing UPS to close some of these facilities and reducing headcount by 7%. UPS plans to use automation to reduce nondriver headcount within its operations, according to a Citigroup report by analyst Christian Wetherbee . The job cuts would allow UPS to lower labor costs beginning in year two of the company’s new labor contract, and the overall union workforce may be lower at the end of the five-year contract, Wetherbee said. FedEx invests in AI, RPSi Like UPS, FedEx is heavily investing in automation to improve efficiency within its operations. This week, for example, Dexterity’s AI division announced a collaboration with FedEx to leverage AI-powered robotic technology to load boxes into trucks and trailers. Additionally, technology provider Berkshire Grey and FedEx expanded their strategic relationship in August. FedEx Ground is deploying Berkshire Grey’s robotic product sortation and identification (RPSi) systems to sort small packages for daily operations. In addition to the recent installations at eight sorting facilities — including in Queens, N.Y.; Las Vegas; and Columbus, Ohio — FedEx Ground plans to install RPSi systems at other facilities over the next 12 months. FedEx is also integrating its three customer platforms — customer service, marketing and sales — into software company Salesforce ’s data cloud to give “the customer a more informed, efficient and personalized experience when doing business with FedEx,” FedEx Chief Customer Officer Brie Carere told analysts this month. UPS and FedEx plan to continue investing in technology as each aims to remove excess costs from their networks and improve efficiency to remain competitive in a market that is becoming more reliant on such investments.

Consultant’s Insight: Automation cuts costs, improves efficiency for UPS, FedEx

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