Those in the shipping industry, whether shippers, third party logistics providers, small parcel auditing firms, or parcel carriers, know shipping software and other technological advancements are the way forward in this business. While it seems some of these parcel carriers have been around forever, they are far from stagnating. Parcel shipping giants UPS and FedEx continue to make intensive, strategic investments in the latest small parcel shipping industry automation and logistics management technology. Developing technological solutions on these fronts has already brought them greater customer satisfaction and higher profits. Here are some of their most recent and consequential innovations.
To remain competitive, small parcel carriers, including UPS and FedEx, have to keep speed, reliability, and visibility constantly in focus. Today’s consumers are doing much of their purchasing and shopping online in the fast-paced world of ecommerce shipping. They demand quick delivery and will tolerate few hiccups in the shipment process.
A major way to address the need to ship large volumes of packages quickly and dependably has been to automate an ever-growing number of logistical processes within small parcel shipping. For UPS and FedEx, automation begins in the parcel sorting facility, where robots scan, process and sort parcels in order to meet delivery requirements, including next-day, same-day, and even less-than-same-day drop off.
UPS and FedEx have already invested an enormous amount of time and money in automating their parcel sorting facilities, and they show no signs of stopping. While UPS’s largest fully-automated package handling facility, in Kentucky, covers the same area as 90 football fields, it is projected that UPS will automate its other package handling hubs by 2020. FedEx’s largest package sorting facility is in Tennessee, and features miles of conveyors. FedEx has announced that it will pour about $2 billion into the further mechanization of its handling facilities in 2017 alone, and all hubs FedEx builds in the future will be designed for instant automation.
The facilities of both companies can already sort packages at the rate of hundreds of thousands per hour. Nevertheless, UPS and FedEx continue to develop proprietary small parcel shipping technology to further optimize processes in the parcel-sorting stage and beyond. FedEx, for example, requires its information technology vendors to offer a standard interface that integrates sorting and scanning hardware into the company’s own process, which is part of its Integrated Sortation System (ISS). Overhead scanners record data located on packages and divert packages according to algorithms executed by the software.
For its part, rival parcel carrier UPS optimizes ground shipping routes even while packages are undergoing sorting and loading. The company’s On-Road Integrated Optimization and Navigation (ORION) shipping software system employs fleet-wide telematics and algorithms as well as customer-specific data to calculate pick-up and delivery schedules, with the result that drivers are informed of routes that have been optimized for both time and cost-efficiency. ORION has succeeded in lowering driver miles even as the number of delivery stops has grown, and overall labor hours of company employees have increased less than the average daily increase in package volume.
Another focus of the parcel giants’ latest shipping software and supply chain management innovations is customer empowerment. Now more than ever, people awaiting packages have control over where, when and how they will receive their shipments. For example, a feature within UPS’ My Choice service called “Follow My Delivery” enables customers to view a live map on which they can follow the progress of their urgent UPS Air and UPS Worldwide Express shipments. The company plans to integrate the feature with more of its delivery services soon.
UPS and FedEx continue to seek still other digital solutions that could be applied to the shipping industry as well. Research and development teams from companies like Shutl and Roadie have benefited from the UPS Strategic Enterprise Fund, which has as its mission to develop and apply products, services and technologies that enable synchronization of the flow of goods, information and funds. Meanwhile, FedEx sponsors the FedEx Institute of Technology at the University of Memphis, as well as the Epicenter Logistics Innovation Accelerator, an entrepreneurship program that focuses on bringing innovative logistics and supply chain management solutions into the marketplace.
No doubt, the success of newer delivery enterprises such as Uber and Amazon are propelling the old stand-bys into this new frontier of quick technological development for the sake of improving efficiency and lowering costs. Though finding ways to save money shipping is on everyone’s mind, cheap shipping rates are what shippers look for from small parcel carriers, which is why they often utilize small parcel auditing services. The pressure to have cheap shipping rates leads UPS and FedEx to find more efficient logistics and supply chain management solutions, usually through shipping technology options, to compete with each other. In the parcel shipping industry, as in so many others today, the company with the best technology looks poised to win.