As we discussed, we are moving from a scanning network to a sensing network through our Smart package, Smart facility, RFID initiative. In 2024, we equipped nearly 60,000 U.S. packaged cars with sensors, which represents 66% of our fleet, eliminating 12 million manual scans per day and enhancing package visibility for our customers.
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Carol Tomé
Yes. Thank you for the question. I'd love to talk about our future because I think our future is very bright. We are leaning into the segments of the market that value our end-to-end network but we're doing it through differentiated capabilities. And so when you think about the future of UPS, think about complex logistics where we are providing solutions for the segments of the market that no one else has. Think about RFID tagging, which started as a productivity initiative for us has turned into an inventory management opportunity and benefit for our upstream customers.
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J. Bruce Chan
I think it's very encouraging to see some of the proactive changes here, and maybe I'll just focus in on SPSF because it strikes me that the RFID initiative is very helpful in optimizing your assets with some of these fairly significant market developments. It looks like you're underway in phase 2. So maybe what's the target for rollout across the entire packaged car fleet? And any comments that you have around the time line, especially in the phase 3 would be great?
Carol Tomé
So Nando, would you like to take that?
Nando Cesarone
Yes. So we've got a schedule, of course, prepared a dedicated team to execute the changes as we talk about the changes to the Amazon and other changes here with SurePost. That schedule is completely linked to our financial plan, and we have full confidence that we can execute those changes.
In addition to what Carol mentioned earlier, especially with RFID tagging, we've got an opportunity to pull customers in where the stickiness just becomes a real big discussion and decision if they ever want to really disconnect from that technology because it's going to not just help delivery of packages, but also their back office environment, which we're really excited about.
Carol Tomé
We should be rolled out this year. And from a customer stickiness perspective, Matt, you can give a couple of examples.
Matthew Guffey
Yes. Yes. So what Nando just highlighted and Carol framed is it's really important because we do get from RFID, we get some productivity benefits and efficiency benefits. But from a customer value proposition, it's resonating very, very well. When you think about how you connected to our value proposition in the B2B or commercial space, we typically think industrial and high-tech in some of these areas, but retail is a big driver through store replenishment. And this has really enabled us to win in this space.
We brought over -- and if you heard Carol in her opening comments, she highlighted this, but 15 retailers that we've already onboarded and I would -- large enterprise retailers in the United States that really -- that love the RFID capability because they have inbound visibility to what's hitting their docks, and it allows them then to spread their workforce and how they inbound that volume. It also, again, it complements us from a commercial perspective because we can deliver many packages to those on location.
The last piece I would add on to that, which when you couple this together is we are able to get these retailers inbound delivery windows and it allows them that flexibility. So you have the physical capability but then you have the visibility through RFID. And we believe we're just on the edge of something great here to work with our retailers to continue to grow.
Carol Tomé
So it improves our stocking. It reduces their labor hours. It's a win-win. So we'll continue to lean into that in a big way. And we're ahead of the game here when we look around the competitive landscape around the world. |
