Ups Facing Increasing Fuel Costs

UNITED PARCEL SERVICE, Inc. BACKGROUND INFORMATION In 1907, 19-year-old James E. Casey formal the American Messenger Company in Seattle, Washington, which would be know six years later as the United megabucks Service (UPS). Despite stiff competition and a timeframe of century years, this messenger company transformed from a business located in a basement with deliveries made by rack to the worlds largest package delivery company, delivering today to 6.1 cardinal customers in 200 countries by air, sea and land. With such a large cliental and major domestic competitors like USPS and FedEx, UPS has had the opportunity to create itself throughout the years and continues to lead the pack in logistics, tot up chain management and e-commerce. However, reinventing continuously a 42.6 billion sawhorse corporation is obviously non an easy task and presents its take of problems… PROBLEM IDENTIFICATION UPS has been experiencing increasing enkindle cost lately, as a result of energy prices that are escalating around the world. As a logistics provider, fuel costs account for a significant donation of operating costs at UPS. Thus, an increase in fuel costs jeopardizes directly the organizations profitability (see disclose 1).

MEASURE From 2006 to 2007 UPS experienced an increase in fuel costs of 12.0% on top of the 20.2% increase from 2005 to 2006. Indeed, according to the 2007 Annual Report, fuel costs went up to $3 billion last year (see adjoin 2). These increases in operating costs would have been even higher, 27.3% from 2005 to 2006, had UPS not experienced gains from hedging this commodity. ANALYZE There are many executable strategies that UPS could utilize to cope with the escalating fuel costs. Given the size of UPS, the global freight industry, and utter significance of not proactively addressing this issue (which is eer an option), it seems that UPS has three prominent methods for combating this increase in operating costs.... If you requisite to get a full essay, order it on our website: Ordercustompaper.com

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