On their Q1 earnings call, United Parcel Service (UPS) said it plans to deploy its “smart package” initiative across the rest of its US delivery network this year, after its initial success at select facilities in 2022, according to CEO Carol Tomé.
Use Cases
Use cases for the “smart package” initiative include:
- Package tracking and tracing
- Inventory management
- Asset tracking
- Enhanced security
- Package sorting
- Proof of delivery
- Return management
- Compliance and regulations
Current Situation
About 100 UPS facilities are currently using the RFID system. UPS said it plans to invest $140 million in the initiative in 2023 as it implements the technology at its 940 remaining US buildings, Tomé added.
According to CFO Brian Newman, the company is implementing RFID to:
- Reduce the rate of misloading parcels on to the wrong truck from one in 400 to one in 800, and perhaps even better than that. Misloads are now just one in 1,000 at 50 of the buildings using the RFID system.
- Use RFID tags and wearable readers to eliminate 20 million manual bar code scans daily for the employees loading parcels onto trucks.
Bottom Line
CEO Carol Tome states that RFID will eliminate $500M in non-operating costs this year! Eventually, UPS plans to move away from wearable devices and instead have the package trucks interact with the RFID tags.
The UPS initiative demonstrates how RFID is not only creating value in stores, but is working its way further back into the supply chain.
