UPS is looking to improve its delivery density—that is, the number of parcels delivered in one trip—through a new pilot programme involving its order management system.
The new system involves a “virtual hold” that holds an order until another shipment can be matched for the same address.
The hold can only last as long as the service level agreement allows (for example, some services must deliver next working day), but within each of those service levels, there may be leeway of up to 12 hours.
Credit: Jimmy Conover
This means more parcels can be delivered with fewer stops, which is the goal of all parcel companies as they grapple with the costs of residential deliveries. According to UPS, the estimated cost per delivery is $5.50, plus 60 cents per additional parcel.
What makes this different from previous attempts at addressing the issue, according to CEO Carol Tomé, is that this pilot looks for solutions “upstream”, back towards the point where the order is made, as opposed to “downstream” to solutions at the point of delivery, such as UPS Access Points.
UPS has not named the tech company it will be working with for the trial.
Source: Supply Chain Dive