UPS counters Amazon.com challenge with IoT, analytics

IoT sensors and data about delivery routes and vehicles are helping UPS fend off Amazon.com, its No. 1 threat in the shipping business.

Perhaps more than any other shipping company, UPS leverages sensor-driven analytics for anything from preventative vehicle maintenance to route optimization.

It’s a critical process as UPS, fellow rivals FedEx, DHL and others grapple with the digital disruption Amazon.com has exacted on the shipping industry. Once content to simply partner with and pay shipping giants hundreds of millions of dollars to deliver shoppers anything from books to furniture, Amazon.com has begun competing more closely with its partners.

Today’s UPS trucks are equipped with more than 200 sensors, which collect data points on vehicle operations. The data migrates to UPS analytics software, which crunches it overnight to determine whether new parts are needed.

Data strategy orbits ORION

Among UPS’ greatest data management assets is ORION, short for On-Road Integrated Optimization and Navigation, an analytics engine that includes package-level detail, customized online map data, fleet telematics, and advanced algorithms to determine the most efficient delivery route for each driver every day. ORION, which saves UPS hundreds of millions of dollars each year, helps the company’s 55,000 drivers log 100 million fewer miles each year. This system also reduces emissions by 100,000 tons.

ORION gets help from sensor-enabled handheld devices, known as Delivery Information Acquisition Devices (DIADs), that drivers use to inform their routes. UPS uses telematics to collect data from computers and sensors installed on trucks and from package scans UPS drivers make to gain insights into where things are, where they’re going, when they’re supposed to get there and what their customers think about the service. These data streams enable the company to create efficient routes and ensure driver safety. Or, as Levis puts it, the technologies help UPS make better decisions.

For example, when a customer uses UPS’ MyChoice service to schedule a delivery window time for an expected package, ORION will reroute the driver as efficiently as possible, delivering the updated schedule directly to his or her DIAD. This saves drivers as much as 100 driving miles a year.