UPS: Where wires meet tires in e-commerce

By T.K.MALOY, UPI Deputy Business Editor

CHICAGO, April 6 -- UPS e-commerce director Alan Amling said that he still sometimes gets asked what his company doing at technology shows such as the Comdex exhibition here this week -- and he answers that when it comes to package deliveries, his company is all about e-commerce and technology.

The question first came up at shows such as Internet World in the late '90s but doesn't get asked so much anymore.


"UPS what are you doing here? What do you have to do with Internet commerce," Amling recounts.

Amling, who moderated a Comdex panel entitled "Dealing with Logistics and Fulfillment in the B2C Space," likes to view UPS as one of the ultimate "brick-and-click" companies when it comes to e-commerce.

He cites the fact that not only does the 93-year-old UPS handle about half of all e-commerce deliveries in the United States, but that for those using UPS in general, a great deal of ordering and package tracking is done online by customers.


His boss, CEO Jim Kelly refers to UPS as the place "where wires meet tires," and Forbes magazine has called UPS "a technology company with trucks."

Surveying the e-commerce landscape in general, Amling said "the people that are here now are those that have thought about e-commerce beyond just aggregating eyeballs or having a flashy Web site. You know, its what happens after the order, how does the company actually make money?"

"You've had business models, that were selling things over the Web that are locally available, that are commodities, that are replenishables," Amling said. "(For instance) if I'm going to buy a bag of dog food, I'm going to go down to the store and pick it up on the way home. (For companies) a low margin item that weighs 40 pounds, you can't make that work no matter how smart you are."

"Those kinds of business models have gone away," Amling said.

According to the UPS e-commerce director, the company has been, and is still constantly working on ways to use its monumental 74-terabyte database of customer and package information for e-commerce services.

Amling cited the six UPS shipping and logistics applications that already have been integrated by more than 60,000 businesses since they were introduced in April 1999.


A list of the UPS online tools includes: tracking, signature tracking, rates and service selection, time in transit, address validation, and shipping information.

The company is continuing to build out its array of return services, designed to help everyone from manufacturers to online retailers solve the problem of making their supply chains run hard and fast in reverse.

"Returns on the Web" is the company's Internet-based returns service that simplifies back-office functions for business while making the process for consumers as simple as "log on, print, log off," Amling said.

Amling cited a recent study by the Forrester research firm which reported that 60 percent of those polled in the study said they would buy more over the Internet if returns were made easier.

Also, UPS has rolled out wireless functionality that allows customers to track packages, find the nearest drop-off location, calculate shipping rates and find transit times via virtually any Web-enabled cell-phone, PDA or pager, according to Amling.

UPS has established partnerships with a number of leading innovators in the electronic commerce arena -- including Harbinger, IBM, Open Market, Oracle, PeopleSoft, SAP and TanData. As part of these partnerships, these companies are incorporating UPS Web-based and software logistics and supply chain management functionality into their own software and service offerings.


Among other partnerships, UPS has added an online service center at the Web site of the online auction giant e-Bay to allow sellers and buyers to simplify the shipping process, by, of course, being able to click and send through UPS for the United Postal Service or Federal Express. This was launched in December.

"E-Bay is really not our customer, they are not shipping. It (the UPS e-Bay center) is the place where 23 million of their customers, who ship individually, can access (shipping services)," Amling said.

Amling also noted that UPS has expanded beyond package delivery into "information" delivery with the company's June 1998 rollout of the "UPS Document Exchange," an electronic delivery and management service for shipping anything over the Internet that can be contained in a digital file, including documents, audio and digital files using 128-bit encryption and password protection.

Reflecting on the entry of UPS into e-business with its online tools suite in 1997, Amling said the company's successful e-commerce track record thus far is a result of luck and great management.

"We made some good choices early on. When we formed our e-commerce effort, we made it cross-functional," Amling said. "In a lot of companies the e-commerce effort is IT for its marketing. The way we approached it, we had a team that had finance, sales, marketing, IT, and we really looked at it in a cross-functional way."


He added that this is something that most companies involved in e-commerce are doing now, but for UPS it was a good move early on.

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