The world’s biggest package shipping company in San Francisco spends $1 billion for technology that could save gas and improve its operations. This year, UPS implemented technology into its system that uses data gathered from vehicles, customers and drivers for a new route guidance process, which will be used to save money and time as well as to reduce fuel burn.
UPS introduced this 2013 the On- Road Integrated Optimization and Navigation (Orion) system to its 10,000 Atlanta-based trucking company with 55,000 drivers. The Orion system has been the largest advancement in technology in the UPS Company. It had been continuously developed for nearly 10 years now.
To increase efficiency and reduce costs, UPS is very sensitive when it comes to monitoring processes and standards implementation systems, even to the smallest detail. For example, its drivers keep their keys hooked on their fingers instead of having them keep it on their pockets and they only make the right turns. UPS is upbeat and refused the total savings when it comes to its technology designs, which include their other programs.
In an interview, Chief Information Officer David Barnes said, “We’re using big data to drive smarter, and the idea is an extension of that to other things. This is a world where we have such levels of connectivity. The information in almost all cases is coming faster than the packages are being picked up.”
UPS gathers electronic information from its customers, from its delivery fleets that total to 101,000 vehicles, and from the devices carried by the drivers. This information is used to create optimal routes that helped reduce time, fuel and distance.
What UPS does is that it provides customers with specific hours for parcel pickup or delivery times. It provides customers with a “My Choice” option where they can choose to move or delay deliveries with the use of their smartphone app. “We brought that information together and looked at developing a mathematical model that would take into account the physics of the driving route, the knowledge of the driver and information from the packages to bring it all together with optimal routing,” Barnes said.
UPS declines to give comment on how much the technology development would cost and by how much it will save soon as it will be fully deployed in 2017. The biggest shipping company simply said that it was significant.
Remarkably, during the initial tests with the use of Orion, a significant decline in miles driven by fleets was shown. With this, the company said that if the miles driven by every driver each day is reduce by 1 mile, it can help the company save fuel, which can amount to $50 million each year. Aside from the money saved, the mileage reduction can even save the company from the maintenance of its vehicles as well as time.
With the use of the Orion system, UPS this year would have saved 1.5 million gallons of fuel and reduced 14,000 metric tons of carbon dioxide emissions. Last year, with the use of proprietary systems that gather 200 data points on each vehicle, the company was able to save fuel amounting 1.5 million gallons and at the same time eliminating 206 million minutes idle time.