United Parcel Service (UPS, stylized as ups) is an American multinational shipping & receiving and supply chain management company founded in 1907.[1]: 1 Originally known as the American Messenger Company specializing in telegraphs, UPS has grown to become a Fortune 500 company[6] and one of the world’s largest shipping couriers. UPS today is primarily known for its ground shipping services[7] as well as the UPS Store, a retail chain which assists UPS shipments and provides tools for small businesses. In addition, UPS offers air shipping on an overnight or two-day basis and delivers to post office boxes through UPS SurePost, a subsidiary that passes on packages to the United States Postal Service for last-mile delivery.[8][9]
UPS is the largest courier company in the world by revenue, with annual revenues around US$85 billion in 2020, ahead of competitors DHL and FedEx.[10] UPS’ main international hub, UPS Worldport in Louisville, Kentucky, is the fifth busiest airport in the world by cargo traffic based on preliminary statistics from ACI, and the third busiest in the U.S. behind FedEx’s Memphis Superhub and Ted Stevens Anchorage International Airport.[11]
On August 28, 1907, James E. Casey founded the American Messenger Company with Claude Ryan[12] in Seattle, Washington,[13] capitalized with $100 in debt.[14] Most deliveries at this time were made on foot and bicycles were used for longer trips.
The American Messenger Company focused primarily on package delivery to retail stores with special delivery mail delivered for its largest client the U.S. Post Office. In 1913, the company acquired a Model T Ford as its first delivery vehicle. Casey and Ryan merged with a competitor, Evert McCabe, and formed Merchants Parcel Delivery. Consolidated delivery was also introduced, combining packages addressed to a certain neighborhood onto one delivery vehicle.[14] In 1916, Charlie Soderstrom joined Merchants Parcel Delivery bringing in more vehicles for the growing delivery business. In 1919, the company expanded for the first time outside of Seattle to Oakland, California, and changed its name to United Parcel Service. The name change to United Parcel Service was to remind the company that expansion operations were still United under the same organization and Parcel identified the type of business offered as part of its Service. Common carrier service was acquired in 1922 from a company in Los Angeles, California. UPS became one of the only companies in the United States to offer common carrier service. At first common carrier was only limited to a small area around Los Angeles but by 1927 expanded to areas up to 125 miles outside the city. In 1924, a conveyor belt system was debuted for the handling of packages for UPS operations.[15]
In 1930, a consolidated service began in New York City, and soon after in other major cities in the East and the Midwest.[16] The use of common carrier for delivery between all customers placed UPS in direct competition with USPS and the Interstate Commerce Commission. The common carrier service was applied in cities where UPS could use the service without the authority of the ICC and state commerce commissions. The first city for UPS to use common carrier status outside California was Chicago, Illinois, in 1953.[17]
Air service through UPS was first used in 1929 through private airlines. However, the Great Depression and a lack of volume ended the air service. In 1953, UPS resumed air service called UPS Blue Label Air with two-day service to major cities along the East Coast and West Coast.[18]
Expansion and diversification
In 1975, UPS moved its headquarters to Greenwich, Connecticut, and began serving all of the 48 contiguous states of the United States. This expansion of operations made UPS the first package delivery company to serve every address in the contiguous United States. Additionally in 1975, UPS went international by establishing operations in Canada. On February 28, UPS Ltd. (later changed to UPS Canada Ltd.) began operations in Toronto, Ontario and today UPS Canada’s head office is located in Burlington, Ontario.[19] In 1976, UPS established a domestic operation in West Germany.[20]
UPS Next Day Air Service was launched in 1985 for all 48 contiguous states plus Puerto Rico. In 1988, UPS Airlines was launched with authorization from the Federal Aviation Administration and became the fastest-growing airline in FAA history – currently the 10th largest airline in the United States.[21] Domestic air service was added to Germany in 1989.[22] In 1991, UPS relocated its headquarters to Sandy Springs, Georgia, a suburb of Atlanta. Following this in 1992, UPS acquired both Haulfast and Carryfast and rebranded them UPS Supply Chain Solutions. Haulfast provided the pallet haulage and trucking network for the CarryFast group of companies. By 1993, UPS was delivering up to 11.5 million packages and documents per day.
In order for the company to service the large volume of customers in the 1990s, UPS developed technologies to improve efficiency. A handheld device called “Delivery Information Acquisition Device” (DIAD) was created to record and upload delivery information to the UPS network immediately upon pickup by every UPS driver. In 1992, UPS began tracking all ground shipments electronically. In 1994, UPS.com debuted, and provided an interface to make what was primarily internal operational information available for customer access. After 27 years of providing this information, UPS chose to hide it again for most packages in 2021 and this information is no longer available on their consumer facing website.
In 1995, UPS acquired SonicAir to offer service parts logistics and compete with Choice Logistics. In the same year, UPS launched UPS Logistics Group to facilitate global supply chain management services and consulting for customer needs. In 1997, a walkout by the 185,000 members of the Teamsters shut down UPS for 16 days.[23] In 1998, UPS Capital was established to enable companies to grow their business through a comprehensive menu of integrated financial services through UPS.[24] UPS acquired Challenge Air in 1999 to expand its operations in Latin America.[25]
On November 10, 1999, UPS became a public company[26] in the largest initial public offering of the century.[27]