LOS ANGELES (Reuters) - United Parcel Service Inc on Tuesday said it is rolling out a new navigation tool designed to reduce costs for the company and headaches for its roughly 60,000 U.S. package delivery drivers.
The world’s biggest package delivery firm - known for eliminating most left turns on routes as part of a years-long effort to cut driver miles, fuel use and accident risks - expects to have the new UPSNav technology in most of its U.S. drivers’ hands by 2020.
The move comes as UPS and rivals ranging from FedEx Corp and the U.S. Post Office to Amazon.com Inc’s logistics unit grapple with surging e-commerce deliveries and the high cost of taking goods the “last mile” to shopper doorsteps.
UPSNav updates the company’s On-Road Integrated Optimization and Navigation (ORION) system that prepares parcel delivery routes. It combines UPS delivery data, including time-saving information such as the location of loading docks and package receiving areas, with ORION maps that cover more than 250 million locations to find the most cost-effective route between stops, company officials said.
Saving time for drivers, who make an average of 125 stops per day, can translate into big savings for the company, said Jack Levis, senior director of process management at UPS.
“Seconds can add up to minutes and minutes add up to millions,” said Levis.
While he declined to forecast how much UPSNav could shave expenses, Levis said saving U.S. package delivery drivers one minute per day could cut annual labor costs by $14.5 million.
He said reductions in fuel use and vehicle wear and tear would produce additional savings for UPS’s domestic package unit that had 2017 operating profit of $4.28 billion last year.
A UPSNav update due next year will recalculate routes throughout the day, accounting for traffic, remaining deliveries and pick-up requests, said Levis, who added that Canada is also testing the technology.
Early data from 5,000 drivers who tested UPSNav showed the biggest cost savings on lower-density suburban and rural routes, which are more costly because they involve more driving miles and fewer revenue-producing delivery stops.
It helped all drivers work more efficiently, leaving more time to provide better service, Levis said.
“UPSNav takes a lot of the stress out of our work,” said Jason Dayhoff, a UPS driver in Hunt Valley, Maryland. “With this tool, I spend a lot less time hunting for addresses or loading docks.”
Reporting by Lisa Baertlein in Los Angeles; Editing by Bill Rigby