There is probably no company better at using information for optimizing its operations than UPS, the world's largest package delivery company and a global leader in supply chain and freight services. And it's no small feat to capture, distill and utilize that information as UPS is the second largest organization in the U.S., with more than 400,000 employees and a fleet of nearly 99,900 vehicles.
Those vehicles range from cars and light trucks to tractor trailers hauling single, double and triple trailers. The fleet is used to provide small package, as well as logistics and distribution services, including truckload, less-than-truckload (LTL) and urgent LTL service. In addition to diesel and gas-powered trucks, UPS maintains the largest private fleet of alternative fuel vehicles in the U.S.
UPS gathers data from nearly every aspect of its operations - from the handheld computers the delivery drivers carry to record customer interactions, to computers used to scan and sort packages, to mobile devices placed on its trucks. This data is then monitored and analyzed to drill down for opportunities for operational savings.
A wide range of opportunities for information gathering exist within UPS's massive fleet of vehicles. With a fleet the size of UPS', even small changes in routes or in vehicle condition can reap big returns. And the returns are not just in vehicle maintenance improvements. Analyzing data from its huge fleet also pays dividends in terms of lessening the company's carbon footprint, improving fuel consumption and even reducing unsafe behaviors behind the wheel.
UPS is a leader in developing proprietary software and firmware (basically a combination of software and hardware) for data collection, including vehicle data. It has been using a combination of computers and wireless telecommunications technologies for a number of years now.
"We collect all kinds of data about our trucks," says David Reidy, a veteran UPS fleet manager based out of the company's Baltimore, MD, operation. "Over the years we have accumulated tons of historical data. But it's not the data alone that helps us improve, it's what we do with it that makes the difference."
With a need for better capture of data and analysis, and with help from telematics, UPS began developing "telepathic trucks." In 2008, it launched a telematics-based initiative that uses algorithms (procedures or formulas for solving a problem) and firmware to analyze a stream of data collected from sensors in its delivery vans, commonly referred to as package cars. The objective was to use this data to improve efficiency and customer service, slash energy consumption and emissions, and make drivers safer on the roads.
"The technology enables insight into a vehicle's performance and condition, and helps pinpoint opportunities to coach drivers to improve safety, customer service and efficiency," says Dale Spencer, UPS' corporate automotive manager. "The data also is used to cut fuel consumption, emissions and maintenance costs."
Basically, UPS uses technology to "paint" a picture of the driver's, and the package car's, day by capturing data from sensors on more than 200 vehicle-related elements - everything from speed, engine rpm and oil pressure, to seatbelt use, the number of times the truck is placed in reverse, how often the bulkhead door is opened and the amount of time spent idling.
Using a 900 MHz radio, the data is uploaded automatically when a driver returns to his center at the end of the day and passes under a special RF receiver. The data is then sent to UPS' massive data center in Alpharetta, GA. Once the information is captured, proprietary computer applications using in-house developed firmware and sophisticated algorithms enable UPS operations personnel - from truck technicians to supervisors to managers - to analyze the data and, ultimately, draw conclusions about UPS' vehicle-maintenance and logistics processes. The culled information is accessed by computer and is presented in a easy-to-read, clean, dashboard format.
The telematics technology is allowing UPS to move from preventive maintenance to a just-in-time, condition-based maintenance platform where each truck will eventually issue its own "health report," says Spencer.
In the past, like most fleets, UPS scheduled vehicle maintenance by time-dependent factors. By maintaining fleet vehicles based on the actual condition of key mechanical components, Spencer says UPS has been able to use fewer resources, increase efficiency of maintenance operations, minimize vehicle downtime and improve vehicle repairs and maintenance. This, in turn, has advanced vehicle reliability by reducing on-road breakdowns and helped lower the cost of maintenance, as well as life cycle costs.
When that rare breakdown does occur, UPS does a complete investigation to determine why it occurred and how it can be prevented, Reidy points out. If necessary, changes are then made to maintenance and repair procedures.
The telematics systems give technicians detailed visibility of vital mechanical and electrical functions on each vehicle - daily, without always having to take the vehicle out of service and bring it to the shop, Reidy explains. This enables UPS to determine much more accurately the right time to bring trucks into the shop for repair and maintenance, and when to place a truck that is beginning to perform less efficiently on a shorter route.
By way of example, Reidy cites a delivery van that reported a potential problem with the diesel particulate filter (DEF). Using the telematics system, it was discovered that the truck's route was not long enough for the engine to generate enough heat to regenerate the filter. Rather than working on the DEF system, the truck was simply shifted to a route with higher mileage.
At present, UPS replaces a starter approximately about every two years, whether a vehicle does 150 stops a day or 30 stops a day. With the touch of a keyboard button, telematics allows technicians to base the replacement decision instead on things like the actual cycles of each starter and the amount of voltage it draws when it is used.
The telematics system also helped UPS determine that in some cases it was replacing fuel injectors when all that was needed was the replacement of inexpensive O-rings, notes Steve McCarriher, a long-time UPS fleet mechanic at the Baltimore terminal. "That saves a lot of time and expense.
"With the Telematics, we don't replace components and parts that don't need to be replaced anymore."
In addition, he says the system gives UPS better insight into problems that a driver might not even be aware of, such as a problem with injection pressure or the cooling system.
The Telematics system is also helping to increase tire life through tire monitoring; lengthen the useful life of parts, including lead acid batteries; and decrease the disposal of parts, Reidy says. The bottom line: UPS is getting more useful life out of its trucks with lowered life cycle costs. Once trucks reach the end of their service at UPS, they are scrapped.
At the start of their shifts, technicians first check driver vehicle inspection reports. Then they log into the telematics system using computers in the shop and check their group of assigned vehicles. Any trucks that have experienced mechanical problems are flagged in the telematics program, with the time and duration of each issue noted.
To help technicians better diagnose the problems, the system provides a "heads-up" as to the possible causes of the problem, along with a troubleshooting decision tree of suggested fixes. Problems are prioritized according to their severity.
"That's a real benefit and time-saver for us technicians," says McCarriher. "By having all that information, we can often fix a package car on the line (where it is spotted for loading each night) rather than having to move it to the shop. Having a truck in the shop can cause a lot of pressure because our trucks are on a tight delivery schedule."
UPS is constantly "data mining" all the information gathered from the "telepathic" trucks, says Reidy. The data is searched, analyzed and sifted through to find relationships, patterns or any significant statistical correlations, especially peer-to-peer comparisons among vehicle models.
While it isn't readily noticeable, UPS uses more than six different package car designs that allow for the selection of the right vehicle for different routes.
The new telematics systems also provide visibility into vehicle idle time. The technology has helped to reduce the amount of time spent idling by 15 minutes per driver per day, Spencer says, and that means significant savings in fuel consumption and engine emissions. According to Clean Air Counts - a northeastern Illinois regional initiative to reduce ozone-causing emissions, over 10 seconds of idling uses more fuel than restarting the engine; one hour of idling burns up a gallon of fuel; and an idling vehicle emits 20 tine more pollution than one traveling at 32 mph.
"Multiply results like that by more than 102,000 drivers worldwide and you can start to imagine the potential," says Spencer. UPS drivers worldwide log over 3 billion miles a year.
Beyond reducing idling time, the telematics initiative is helping UPS reduce energy consumption and environmental impact by pinpointing ways to maximize fuel economy and to optimize dispatch planning and driver routine to reduce overall driver miles. Telematics and route planning software are combined to determine where route inefficiencies exist, help design more direct routing and group deliveries to reduce the miles driven and fuel consumed.
Spencer notes that by doing things like reducing left turns, UPS has shaved 29 million miles off its delivery routes last year. That saved more than 3 million gallons of fuel and reduced emissions by more than 31,000 metric tons of carbon dioxide (CO2).
The telematics initiative also has become a safety tool for UPS. Collected data is analyzed for unsafe driving habits and issues. By monitoring braking and backing patterns, as well as seat belt use, managers can help drivers adopt behaviors and habits that not only increase their efficiency but their safety as well, Spencer says. Any telematics recorded safety event is reviewed with the driver to help them self-correct.
Since the telematics initiative started, UPS drivers have decreased the number of times they back up their trucks - a behavior UPS drivers are trained to avoid for safety reasons - by about 25 percent, says Spencer. This has resulted in a significant reduction in backing accidents.
The data gathered also "helped improve an already excellent seat belt usage compliance rate from 98 percent to an almost-perfect (99.8 percent) rate," he adds.
Telematics is also being used to document the return on UPS' investment in "green" vehicles. It operates the transportation industry's largest private fleet of alternative fuel vehicles - some 1,900. They include compressed natural gas (CNG), liquefied natural gas (LNG), propane, electric and hybrid electric vehicles.
Its fleet of some 250 hybrid electric vehicles are expected to save 176,000 gallons of fuel and reduce CO2 emissions by nearly 1,800 metric tons each year, according to Spencer. That is the equivalent of removing almost 100 conventional UPS trucks from the road for a year.
UPS began testing its new telematics initiative on 1,500 delivery trucks at 10 ten U.S. facilities across the country in various geographies and climates, and at one operation in Canada. It has been expanding the program fleet-wide ever since.
One of the nice things about the telematics initiative says Spencer, is that with advancing new technologies, the program is continually evolving and offering up new insights for improving UPS' operational efficiencies and emissions reduction strategy, while reducing expenditures.
"It's exciting to think about what will come next," Reidy says.