Dive Brief:
- UPS is using automated technologies in select U.S. facilities to improve package flow and efficiency, the company announced in a news release Wednesday.
- The improvements target facility processes that are repetitive and physically demanding for employees, such as unloading trailers, sorting small packages and moving irregularly sized shipments.
- Increased automation in the package sortation process will help UPS "support a meaningful reduction in force" among its roughly 140,000 non-driver jobs, according to a Citigroup analyst report published Thursday.
Technological solutions UPS is using in select facilities
| Facility task | Solution | Companies involved |
|---|---|---|
| Sorting small packages | Pick-and-place technologies to automate package movement onto both stationary and moving conveyor belts | Dexterity, Fortna, Plus One Robotics |
| Unloading trailers | A robotic system to make unloading trailers less physically demanding | Pickle Robot |
| Moving small packages and irregular-sized shipments | Autonomous guided vehicles to move items that don’t fit onto conveyor belts and aren’t suited for automated sorting | Dane Technologies, Geek+, Locus Robotics, Crown Lift Trucks, Toyota-Raymond |
Source: UPS
Dive Insight:
UPS is leaning more on automation in the package sortation process as it faces rising labor costs from its new contract with the International Brotherhood of Teamsters. This year, 57% of UPS volume first processed at U.S. hubs went through automated facilities, up from 53% in 2022, CEO Carol Tomé said in a Q2 earnings call.
These new technologies aim to make employees' jobs easier and safer as UPS gears up to recruit a wave of workers for the holidays. UPS is hiring more than 100,000 seasonal employees — primarily package handlers and drivers — this year, the same amount as in 2022.
“We continuously look for ways to leverage technology to improve our employee experience and increase efficiency," Tomé said in a statement. "This is how we build a better and bolder UPS that will continue to be customer-first, people-led and innovation-driven for years to come.”
The technologies UPS leverages aren't limited to autonomous robots.
UPS used AI and machine learning technology in Q2 to divert volume from non-automated to automated hubs, which reduced its labor hours as demand declined. The company also advanced its smart package initiative to eliminate manual scans in its network, with nearly 50% of U.S. buildings operating with the technology at the quarter's end.
Rival FedEx is making its own advancements in automating its package handling processes, including by testing Dexterity AI robots to more efficiently load its trailers.
