Every day UPS moves 16.9 million packages and documents. Even minor improvements in efficiencies reap huge benefits for the organization’s bottom line and their competitive position. As a company, they’re always looking for new ways to optimize their processes, and the benefits of M2M or more specifically Telematics, proved to be the perfect vehicle.
Even before their M2M installation, UPS, is known for being one of the most efficient companies in the world.
In 2008, UPS undertook a major investment, and began a massive telemetry rollout that would equip around a 1/4 of their 96,000+ vehicle fleet. Some of the 200+ sensors that were installed, track movement, engine condition, idle time, even when and how long truck doors are open.
And the rollout, how did it go? Quite well indeed.
By sorting through the mountains of information, or as many refer too, big data, coming in from the sensors, Big Brown was able to deliver 1.8% more packages, reduce their idle times by 15 minutes a day, and cut their total fuel consumption by 3.3% in 2010. Additionally, the engine sensors helped the maintenance team get new information into their vehicles, without tearing them apart. One such example:
A company mechanic was recently working on a fuel injection system failure on one truck, and ended up doing a $2,000 engine overhaul. But afterward, when evaluating the data coming from sensors inside the engine, the company was able to determine that, in fact, the problem was little more than a bad O-ring.
Remarkable really, that one of the nation’s most efficient companies could implement such a system, and still see such dramatic improvements. After all, UPS in it’s very nature is hyper efficient, and it’s not just because of the intense rivalry between FedEx, that this is the case.
The rivalry between FedEx and UPS is stuff of legends. While it’s most likely, not the primary reason they always seek to improve efficiency (profits usually), it is certainly a driver.
It’s also the inherent seasonality and overall variability of traffic, package volume, and price of gas, to name a few others, that fuels their investment in connecting their fleet. Flash forward to today and UPS has at least 22,000 trucks with 200+ sensors (I couldn’t find anything after 2011 with exact numbers), and continues to praise their commitment to raising their reliability and profitability with machine-to-machine technology.
Although the long battle continues for shipping supremacy between USPS, UPS, and FedEx, one thing is certain, the boys in brown hold the M2M crown.