Running head: AIR CARGO INTEGRATOR ANALYSIS
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Air Cargo Integrator Analysis
Miguel Andrew F. Santos
Embry-Riddle Aeronautical University
AIR CARGO INTEGRATOR ANALYSIS
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Air Cargo Integrator Analysis
1.
Introduction
United Parcel Service (UPS) is currently one of the biggest integrators, competing with
FedEx and DHL. It is an American multi-national delivery and supply chain management
company. Starting as a messenger company in 1907, it has now grown into a corporation worth
$51.5 billion driven to enable e-commerce at a global range, even with a significant increase in
the complexity of their operations. (Winters & Mohr, 2009).
The companies route structure is massive, but it starts in their central hub located at
Louisville, Kentucky which is also known as the “Worldport”. Additionally, UPS has hubs
stationed within the United States and the biggest continents creating more than 1000 daily flight
segments, domestically and internationally. (United Parcel Service, n.d.).
In order to reach orders that are made globally, UPS utilizes their enormous aircraft fleet.
Made up of 250, UPS owned, jet aircraft. Types of aircraft UPS own are Boeing 757-200, 767-
300, 747-400, 747-8F, Airbus A300-600, and McDonnell Douglas MD-11.
Table 1
The fleet of UPS Airline
Type of Aircraft
No. of Aircraft
Boeing 757-200
75
Boeing 767-300
62
Boeing 747-400
Boeing 747-8F
Airbus A300-600
13
6
52
McDonnell Douglas MD-11
37
Note. The data are adapted from United Parcel Service. (n.d.). UPS Aircraft Fleet Fact Sheet.
Retrieved from A UPS Website:
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ConceptType=FactSheets&id=1426321565529-534
AIR CARGO INTEGRATOR ANALYSIS
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Even with a massive fleet and route structure, keeping track of the magnitude of packages
flowing through UPS is extremely difficult. However, UPS has come up with an innovative high-
tech solution to cope. Their solution to the unrelenting problem is using Radiofrequency
Identification (RFID) or “smart labels”. Here, it aids UPS in organizing packages while
eliminating the human inconsistency, so that these items will be delivered to the correct address
and be tracked to their exact location. (Dzik, 2007).
2.
Strategic Advantages
From the standpoint of UPS, one advantage the company has over FedEx and DHL are
the algorithm that the company has created. “The company’s ongoing investment and research in
emerging technologies give UPS its competitive advantage” (Baker, Dudley, Holt, Stockton &
Vukota, 2008), making the company’s macro IT infrastructure far more advanced than FedEx.
For example, the company has generation four Data Information Acquisition Device (DIADs)
that “communicate on three network protocols: Bluetooth, cellular-radio, and infrared, outpacing
rival FedEx, and will ensure that the device will be able to communicate wherever” (Baker et.
