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UPS Says “It’s hard to find a better example of how closely our financial performance is tied to our environmental impact than the optimisation of our fleet”

In the UPS released Sustainability report on page 56/57 UPS deals with the impact of Telematics and Fleet Optimisation initiatives on their bottom line, the below is an extract of that report. (UPS is a GEOTAB Customer) – Full Report can be downloaded here


TIME AND MILES NOT ONLY TRANSLATE INTO DOLLARS, but also energy saved and emissions avoided. One KPI used to assess the performance of our ground fleet is measuring how many packages we deliver for each gallon of fuel we consume in our highest-volume operating segment, U.S. Domestic Package. For this metric, fuel consumption includes both our familiar brown delivery vehicles, as well as our “feeder” network that connects our distribution hubs to each other and to high-volume shipping customers. The latter accounts for more than half of our fuel consumption in this part of the business. It includes fuel used by third-party transportation providers, such as trucking companies and railroads.

Efficiency improvements in our U.S. ground operations led to an increase in the number of packages delivered per gallon of fuel used from 2010 through 2013. This metric, however, dipped slightly from 2013 to 2014 primarily due to e-commerce growth. The rise of e-commerce is creating more delivery points due to the increase in the number of residential and small business customers we serve. This means that we must relentlessly optimise the efficiency of our network to remain economically competitive and environmentally sustainable. Technology is key to realising this business and environmental goal. Cutting-edge analytics help us reduce the miles we travel and the corresponding fuel we use, while our alternative fuel and advanced technology vehicles enable us to explore potentially lower carbon ways to travel those miles.

Our people also play a key role in optimising performance by ensuring that their day-to-day behaviours and practices fully maximise the potential of these technologies.

Leveraging Data

At its core, our logistics business is about analytics, and data drives analytics. This is why we capture data about almost everything. A typical day’s route for a single driver in the U.S. includes about 120 delivery stops, which means there are more ways to drive a route than nanoseconds in the history of the Earth.

Now compound that single delivery route by nearly 18 million packages daily in more than 220 countries and territories using 2,700 operating facilities, nearly 2,000 daily flights, more than 100,000 vehicles, and a global workforce of more than 424,000.

The amount of data to collect is enormous, and the application of that data to optimise performance is a compelling challenge with profound implications for both our business and the environment. For more than a decade, we have been tackling this challenge by leveraging data through telematics, package routing technology, service offerings, and other strategies to optimise network efficiencies and minimise the miles we drive.

Some of these tactics include:

  • Allocating pickups and deliveries to the most efficient number of vehicles each day at each facility, thus keeping vehicles off the road wherever possible
  • Routing of vehicles to reach all required destinations in the least amount of time and miles driven
  • Rerouting drivers in real time based on events such as changing customer pickup needs or a requested change in delivery location to avoid wasted miles
  • Eliminating unnecessary customer visits by encouraging customers to sign up for innovative services such as UPS My Choice™, UPS Access Point™, and UPS Smart Pickup™.

In addition to reducing the number of miles driven, we combine numerous techniques and technologies to reduce fuel use per mile, and apply them across our more than 55,000 daily routes, such as:

  • Selecting route options that minimise idling time spent waiting for traffic lights and turns, thus reducing fuel use and emissions
  • Matching vehicle types with routes where they will deliver the best fuel efficiency
  • Conducting proactive, just-in-time maintenance on our vehicles to keep their miles-per-gallon performance as high as possible.

We measure the effectiveness of these initiatives by analysing stops per mile. In our package business, we strive to increase stops per mile and avoid driving unnecessary miles. In 2014, our U.S. domestic package segment increased total stops by 3.6 percent due to higher volume, but increased miles driven by only 1.9 percent. As a result, stops per mile improved from 1.46 in 2013 to 1.48 in 2014.

This improvement helped us to avoid driving more than 20 million miles, eliminating 2.2 million gallons of fuel and 21,000 metric tonnes of CO2. In addition, the use of telematics throughout our domestic small package, freight forwarding, and ground freight fleets enabled us to avoid 281 million minutes of idling time in 2014, equivalent to 2 million gallons of fuel and 19,000 metric tonnes of CO2.

The opportunity to build upon this performance took a significant leap forward in 2012 with the introduction of ORION, which stands for On-Road Integrated Optimisation and Navigation. ORION builds upon our existing data infrastructure — one of the world’s largest private-sector databases — through the addition of prescriptive analytic tools, mathematical-routing algorithms, and customised map data. ORION’s knowledge capabilities encompass more than 250 million delivery addresses and the routes our drivers have used in the past to reach them.

On any given day, ORION analyses a driver’s delivery stops for the day and identifies an optimised route. By the end of 2014, we deployed ORION to 23,000 U.S. drivers and expect to reach full deployment in the U.S. by the end of 2016. With just less than half of its deployment complete, ORION has already produced benefits. In 2014, drivers with ORION deployed realised a reduction of six to eight miles per route, resulting in lower fuel use and related vehicle emissions.

When fully deployed, ORION is expected to reduce the distance driven by our drivers by 100 million miles, saving 10 million gallons of fuel. That translates into 100,000 metric tonnes in CO2 emission avoided, or the effect of taking 21,000 passenger cars off the road for a year according to the EPA Greenhouse Gas Equivalencies Calculator.

Dynamic real-time routing is planned for a future version of ORION, while global deployment is planned for routes after 2017.

UPS Value Data Analytics