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UPS to use automation to sort 80% of packages in 2019

UPS

Shipping giant UPS has claimed that nearly 80% of packages will be going through facilities using automation by the end of 2019.

On a call with investors, UPS chief information and engineering officer Juan Perez said the company had made “significant progress” in expanding automation in 2018 and that 2019 would be “another busy year”.

The company plans to add 20 new automated facilities in 2019, bringing a further 40,000 packages per hour of capacity online.

The company has added 22 new or retro-fitted automated facilities in 2018, with five of these using particularly advanced automation technology. This amounted to five million square feet of footprint.

He said that at the end of 2018 these facilities were processing nearly 70% of eligible ground volume, up from around 50% at the end of 2017.

The company netted revenues of $19.9 billion in its fourth quarter, up 4.6%. Its net income for the quarter was $453 million, down 58.7% due to pension costs, fewer operating days and start-up costs for large facilities.

David Abney, UPS chairman and CEO, said: “We achieved our 2018 adjusted earnings-per-share goal by successfully executing Transformation investments and initiatives that lifted revenue quality and improved efficiency.

“Our diverse portfolio, global footprint and flexible network position UPS for profitable growth in 2019 and beyond.”

A story in December saw Morgan Stanley analyst Ravi Shanker claim that Amazon’s air freight business could sap revenue from FedEx and UPS, which currently handle up to 50% of Amazon’s package volumes.

In an investor note, Shanker claimed Amazon Air could mean 2% of lost revenue for UPS and FedEx in 2018, rising to 10% in 2025. Amazon is adding new planes to its air fleet.

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