Fastest Ground Ever promises ground deliveries in one less business day (even if it sounds like it came directly from Alexis Rose’s brand strategy).
Watch out Amazon Prime, this is innovative! Or, at least, pretty unprecedented for the shipping mammoth. Could this be part of implementing their new CEO’s strategy of quality over quantity? Could it be an attempt to thwart Amazon’s rumored foray into domestic brokering? It’s hard to say, but shaving one business day off ground transit times is one of the largest improvements offered by UPS in years.
UPS has a massive ground delivery network, reporting some 16.8 million packages per day in Q3 alone. Launched week 1 of November, Fastest Ground Ever impacts all delivery lengths. But the most significant improvements come to what UPS calls “one to three day transit lanes”.
These lanes comprise 63% of improvements, meaning millions of commercial and residential shipments will see the following improvements.
- 3 day transit becomes 2 day transit.
- 2 day transit becomes 1 day transit.
While we (and probably UPS) wish Fastest Ground Ever’s two and three day transit times applied to the network across the board, everything hinges on the package’s origin location. In Atlanta, UPS HQ and home to the second largest ground facility, improvements are focused west of the Mississippi. Other markets – Phoenix, Vegas, Seattle, Portland, OKC, and Salt Lake – will still see transit time improvements, but with an already long delivery time the results aren’t as striking.
Carol Tomé announced these changes and then pulled $750 Million from 2021’s capital budget to make them happen. Tomé set the initial goal – 3 day or under delivery for 90% of the U.S. – for October and announced the completion of that goal 8 months ahead of schedule. Tomé said the changes help UPS beat the competition (FedEx) in 20 of the 25 most populated markets in the country. FedEx has routinely beat UPS ground transit times on 30% of ZIP to ZIP lanes. But with the newly implemented Fastest Ground Ever project, UPS hopes to beat the competition and help small to midsize businesses.
The project might have fallen flat had it not been for UPS’s launch of Sunday nationwide ground service in January. Since the service launch seven day a week operations have been a revenue generator for UPS, improved network flexibility, and optimized its time in transit capabilities. UPS is the only U.S. delivery carrier to offer Saturday commercial and residential delivery at all levels of service.
Better transit times don’t just keep customers happy, they alleviate capacity crunches across the network. In order to accommodate this shift, UPS has added both hauling capacity and facilities. Brad Hollister – SwanLeap CEO – states, “Capacity is equally about physical infrastructure and the efficiency of that infrastructure. Without the right technology, your infrastructure will fail you.”
UPS has invested billions in automation of its facilities. Most of its ground packages move through automated hubs to boost transit times. “They definitely did their research.”, states Hollister. “Most businesses don’t have access to the kind of data they need to understand what processes are holding up their supply chains. We find that if you really study your data, there are opportunities for improvement upstream that will impact things like delivery time. The results can be quite surprising.”
On another note, UPS implementation of Fastest Ground Ever doesn’t fully allow them to escape Amazon’s grip. There’s evidence that the improvements are the result of Amazon requesting UPS to do better. And this is the genius of Amazon’s model. By putting pressure on delivery times and building a network of their own, Amazon is driving improvement for other carriers. If UPS wants to keep more Amazon packages in its network, it has to improve its offering. If not, Amazon will either deliver the packages themselves or generate revenue from FedEx. Either way, Amazon wins.