Supply Chain Dive: UPS to Develop Logistics as a Service Product to Diversify Offerings

Nov 03, 2022

(Image Source: Sourcing Journal)

UPS CEO Carol Tomé stated during last week's earnings call that the company is constructing a logistics-as-a-service offering by integrating the features of its digital offerings. Involved digital services include crowdsourcing same-day delivery service Roadie, third-party logistics supplier Coyote Logistics, delivery platform Delivery Solutions, and UPS Capital. Its collaboration with CommerceHub to increase "delivery density" will also be included in the offering. “When our integrated physical network is combined with logistics as a service, we will be unstoppable," Tomé stated.

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Tomé mentioned the product is built on five technological pillars: End-to-end visibility, Delivery density, Effective reverse logistics, advanced capacities, and secure financial options. The pillars expand on previous UPS initiatives. Using its cooperation with CommerceHub, UPS, for instance, is working to reduce delivery density. The order is held in CommerceHub's order management system until another shipment with the same destination can be found. The duration of the hold is based on the terms of the service agreement.

One client is now live on the platform, and the program is expanding to serve more users. Tomé noted that UPS's logistics-as-a-service was in its "very early days," but he predicted that it will help the transportation company diversify its revenue sources when package volumes declined from their peak due to the epidemic. Additionally, UPS's current strategic strategy is highlighted, which centers on taking a "better and bolder" path toward financial success.

"Being bolder is about accelerating our growth in our targeted market group," she explained. More value for our clients and new income possibilities for UPS can be achieved by integrating digital solutions with our worldwide integrated network.

Source: UPS plans logistics-as-a-service offering to build out revenue streams

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