Thursday December 07, 2006

Reading John McPhee's new book about the transportation industry, Uncommon Carriers, I learned something surprising about UPS. It turns out they are a lot more than a package delivery company.

For example, when you call 1-800-TOSHIBA to return a Toshiba laptop for repair in the US, the unit will be picked up by UPS and shipped to its main hub in Louisville. And then it will be repaired by UPS technicians and returned to you, having never left the UPS network.

UPS also acts as a giant cache for companies that would prefer for reasons of efficiency or necessity to store their inventory in the distribution network. The UPS central facility has the largest depot of Bentley automobile parts in the country. They also repair certain printers, and refurbish certain cell phones. And when you order underwear from Jockey.com, they ship directly from a UPS warehouse.

UPS (which no longer stands for United Parcel Service, by the way) has built an intelligent network that includes interesting processing and storage capabilities within its distribution infrastructure. Seems like a smart move that positions them for growth.