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Unbundling UPS: How the Traditional Shipping and Logistics Space Is Being Disrupted
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Unbundling UPS: How the Traditional Shipping and Logistics Space Is Being Disrupted

From package delivery to supply chain & freight services, here’s how UPS is being unbundled.

CB Insights
CB Insights, 2021
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9

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Recommendation

You’ll find an abundance of snappy start-up names in this report from CB Insights, which provides an overview of companies entering the shipping and package delivery ecosystem. The reason for the abundance is clear – supply chain and logistics raised a record $1.7 billion in funding in 2020. The promise of these start-ups is that they’ll direct the laser focus of technology-based solutions at the endlessly complex and often disappointingly inefficient shipping industry. Industry giants like UPS are already employing some tech solutions, but there’s plenty of room to grow with the Internet of Things, AI, machine learning and automation.

Summary

UPS makes the bulk of its revenue on package delivery, with a smaller slice coming from supply chain and freight services. Tech solutions are infiltrating both operations.

UPS is the world’s biggest package delivery company, with shipping and logistics services that unfurl across the globe. The company brought in 82% of its revenue from its global small package operations in 2019, totaling $60.7 billion. About 18% of total revenue for UPS arose from supply chain and freight services, totaling $13.4 billion the same year. COVID-19 increased demand for delivery services but also revealed inefficiencies in global delivery networks. Tech start-ups are swooping in to experiment, digitize and optimize, and one of UPS’s biggest customers, Amazon, has turned into a competitor, embarking on its own shipping experiment with Amazon Flex.

UPS isn’t a stranger to tech solutions. The company has implemented its own proprietary route planning software called ORION, and has partnered with autonomous vehicle and drone delivery start-ups like TuSimple and Matternet. Still, unaffiliated start-ups offering similar services are popping...

About the Author

CB Insights’ technology insights platform provides analysis into markets, business relationships, growth, competition and innovation.

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