April 03, 2024

UPS plans to close 200 facilities, boost automation to cut costs

Steve Smith

UPS plans to close 200 facilities, boost automation to cut costs

UPS, the shipping behemoth, is set to seal off 200 of its facilities over a span of five years, in a move meant to trim down costs and step up automation.

What's happening: The company, owning over 1,000 facilities, plans to halt operations at 40 locales in 2024 alone. This closure is to take place as part of its "Network of the Future" quest—pushing for heightened efficiency through automation rather than manpower.

By investing $9 billion in tech upgrades at 63 sites, UPS aims to enhance productivity and cut the cost per package.
The closures and tech drive are projected to help UPS pocket $3 billion by 2028.

CEO’s take: Carol Tomé, UPS's chief executive officer, has pointed out that the move is dual-purpose, looking to both spur growth in premium markets and bring about greater productivity and efficiency.

The stringent cost-cutting plan unfolds at a time when the logistics industry is increasingly turning to tech enhancements to stay competitive and cost-effective.

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