<body><div><figure><img src="https://img.particlenews.com/image.php?type=thumbnail_580x000&amp;url=0foiiA_0wPpA2hI00" alt="https://img.particlenews.com/image.php?url=0foiiA_0wPpA2hI00" width="1600" height="900" ><figcaption>UPS package handlers move shipments from a conveyor belt into package cars on Dec. 6, 2021, in Louisville, Kentucky. UPS is attacking excess package processing capacity via its "Network of the Future" plan. Jon Cherry via Getty Images</figcaption></figure><h2>Dive Brief:</h2><ul><li>UPS has reduced its network's daily volume capacity by about 1 million packages so far this year, CEO Carol Tomé said on a Q3 earnings call last week.</li><li>The capacity reduction is the result of 45 operational closures, including nine full buildings that were shut down under the delivery giant's "Network of the Future" plan, according to Tomé.</li><li>The closures contributed to an 8% improvement in parcels per workforce hour. "While 8% might not seem like a big number, that translated into an efficiency gain of 11 million hours," UPS EVP and CFO Brian Dykes said on the call.</li></ul><h2>Dive Insight:</h2><p>UPS continues to right-size its U.S. network's processing capacity, a push that began during a demand slump featuring a marketwide capacity glut worth 12 million in average daily package volume.</p><p>Executives said on last week's call that the closures are paying off, even as the demand environment has changed. UPS posted a 6.5% year-over-year increase in average daily U.S. volume in Q3, its highest growth rate in three years, per an investor presentation.</p><p>To keep its operations efficient and cost-effective in the face of volume increases, UPS is leaning more on automated hubs throughout its network.</p><p>"We now processed 63% of the volume in our hubs in some sort of an automated way," Tomé said. "That's up 5 percentage points from a year ago."</p><p>UPS' longer-term plan is to close around 200 U.S. facilities while more than tripling the number of automated buildings in its network, Nando Cesarone, EVP and president U.S. at UPS, said during the company's March investor and analyst conference.</p><p>“These building consolidations and automations yield real savings," Cesarone said.</p><p>Other major parcel carriers are also adjusting their networks to trim operating costs. FedEx continues to advance its "Network 2.0" initiative to combine its historically separate ground and express networks. The U.S. Postal Service plans to consolidate dropoff and pickup activities at rural post offices far away from its top processing plants.</p></div></body>

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UPS cuts daily volume capacity by 1M in efficiency push

UPS has reduced its network's daily volume capacity by about 1 million packages so far this year, CEO Carol Tomé said on a Q3 earnings call last week. The capacity reduction is the result of 45 operational closures, including nine full buildings that were shut down under the delivery giant's \"Network of the Future\" plan, according to Tomé.

UPS has reduced its network's daily volume capacity by about 1 million packages so far this year, CEO Carol Tomé said on a Q3 earnings call last week. The capacity reduction is the result of 45 operational closures, including nine full buildings that were shut down under the delivery giant's "Network of the Future" plan, according to Tomé.