UPS gears up for busiest time of the year

If you see a few more UPS delivery trucks than usual in your neighborhood this week, do not be surprised. There are more than a few reasons for that.

The Atlanta-based global logistics and transportation bellwether said this week that this Thursday, December 20, will be its busiest day of the entire holiday season as it expects to handle more than 28 million deliveries in a week in which it will deliver more than 135 million packages globally. Thursday represents what will be the busiest day in the company’s history.

This is corroborated by data from the National Retail Federation, which states that holiday shopping—for the months of November and December—is expected to increase by 4.4 percent to $586.1 billion in retail sales, up from $562 billion in 2011.

This type of volume requires more than just sufficient logistics planning processes and expertise, too. It requires pretty much more of everything really. Case in point, UPS Airlines is adding more than 400 additional flights this week in order to meet the demand that will come from about 3 million express shipments that will be processed within a 24-hour period at its Louisville, Kentucky-based UPS Worldport international air hub.

What’s more, UPS said it expects to field more than 69 million online tracking requests on Tuesday, December 18, which will easily be its busiest tracking day of the year. And of these online tracking requests, those coming from a mobile device will come in at more than 2 million this holiday season, with more than 600,000 delivery text messages sent to the company’s UPS My Choice customers. The UPS My Choice gives consumers a one-day alert for when a package is coming and allows them to control the timing and location of the delivery.

This is where technology really comes into play for Big Brown. Company officials explained that with increased e-commerce activity and technological inroads consumer-facing tracking technologies continue to gain momentum.

UPS Vice President of Information Services Nick Costides told LM that given the massive amounts of volume UPS handles during the holiday season, there is no shortage of preparation that goes into the processes used to make sure things go smoothly.

“Right after peak [holiday shipping] season of the prior year, we go right into planning for the next peak season,” he said. “We have our marketing, sales, and operations teams throughout the year provide us with business metrics with projections for peak season, and we then marry those business metrics with our technology metrics, transactions, and systems and how they would process those business events. What we have really done is created an ongoing capacity planning process that leads us all the way up to that peak season. We are always [adjusting] the model, really all the way up until the week before Thanksgiving.”

Regarding the metrics followed by Costides and his team, he said they track about 140 different metrics on a daily basis.

Some of these metrics, which are tracked hourly and in real-time, include things like online package tracking requests and outbound messages to customers from UPS. This is where a tool like My Choice, which has 2.2 million registered users for this year, helps to make a difference.

“This helps to better control their delivery experience by doing things like control the number of text messages and e-mails they receive, which comes to more than 600,000 messages and 1.5 million e-mail alerts,” he said. “We will probably send out about 25 million alerts this week over our customer base.”

When asked to provide a basic example of how online package tracking works from the perspective of a customer, he said a customer may receive a tracking alert via cell phone at which point the customer clicks on a tracking number which brings him or her to an online tracking screen with the most recent information about the package and all the related tracking events.

From the time a manufacturer or retailer ships a package into the UPS operating facilities to a customer’s front door delivery, UPS is monitoring and matching those packages through package scans. And all of that information is synthesized and packaged back to customers in a user-friendly way, explained Costides.

“Each step in the equation is something we are monitoring from a business perspective as well as from a technology perspective,” he said. “On a day like today, we are making very tactical moves with systems and solutions and we have the flexibility with our system architecture to move certain systems around from server to server to take advantage of capacity that may be available.”