Business Insider reports UPS last year invested $5.2 billion into new technology, facilities and network capacity optimisations. The funding wasn’t enough to avoid serious end of year backlogs. The company was forced to hire additional planes and trucks to transport freight unexpectedly stuck inside its network.
After incurring $125 million in extra expenditure, the company’s now committing further investment to technical expansion. It will aim to avoid similar issues in 2018 by making further technical optimisations in its supply chain.
Much of the funding will be used to acquire new logistics facilities including delivery hubs and 14 Boeing 747 transport planes. The resources will also be used to improve network technology by increasing the use of automation and robotics inside UPS’ delivery chain.
UPS currently uses automated sorting and distribution facilities at some of its largest hubs in the U.S. The company will now expand the technology to more of its regional locations in an attempt to increase efficiency. UPS needs to reduce the time that packages spend within its network if it’s to avoid a repeat of 2017 in this year’s holiday season. Automation can help by completing repetitive processing actions more quickly and accurately than humans.
READ NEXT: Cisco: Cloud datacentres to power 94% of workloads by 2020
Automation’s not able to replace human workers yet. Instead, UPS is deploying robots alongside existing warehouse staff to assist in areas of the distribution process which could benefit from machine processing. Staff are still required to handle packages and pick goods because the bots aren’t adaptable to the wide variety of shapes, weights and sizes of parcels encountered each day.
“Through our current and future actions, we will enhance UPS’s position as the leading logistics provider by expanding capacity and technology investments to help customers meet their needs for dependable, day- and time-definite service with enhanced visibility and flexibility,” said UPS Chairman and CEO David Abney.
UPS is also investing in emerging technologies which it believes will help streamline its global network. Last year, the company joined an alliance that’s looking for ways to deploy blockchain tech inside the shipping industry.
While this tech isn’t yet ready for primetime, it could be instrumental in improving efficiency in the future. Recording data on a centralised ledger allows information to be instantly shared and stored, reducing the overhead as parcels pass through the stages of a typical logistics supply chain.
