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On the
occasion of United Parcel Service’s (UPS) 100th birthday,
many people have asked me how a company that began as a
small US messenger service evolved to become a world
leader in transportation and logistics. The short answer
is that it wasn’t easy. Whether it is
North America,
Asia, Europe or any
other continent, the initial move into a new market always
brings challenges.
UPS’s
first foray beyond the
US
was in Canada in 1975. Because UPS had not yet been
granted the regulatory authority to drive delivery trucks
on Canadian highways, UPS drivers initially used taxi
cabs, painted UPS brown, to take parcels to customers.
UPS’s competition delivered with trucks, a significant
advantage. But the dedication and ingenuity of UPS’s
Canadian employees made the difference, allowing us to
establish a foothold in what is now one of our strongest
markets outside the US.
Operational challenges weren’t the only barriers to UPS’s
global expansion. UPS entered Asia in 1986, only a year or
so before the Asian financial crisis hit. As the crisis
took its toll on businesses around the region, many
international companies withdrew from Asia and took their
businesses elsewhere. UPS, however, saw the potential in
Asia and progressively established its presence in growing
markets whenever the opportunity arose. Just over 20 years
later,
Asia
represents one of the fastest-growing markets for our
business, with more than 12,800 employees operating in
over 40 countries and territories.
Since
becoming the first global express carrier to have wholly
owned operations in China in 2005, UPS today covers 330
cities in
China,
which account for about 85 percent of
China’s
international trade. In August this year, to meet rapidly
growing demands of Chinese consumers, UPS started
construction of its international air hub at Pudong
International Airport in Shanghai, the first US airline to
establish an air hub in China.
When UPS
initially began its international expansion, it was common
practice to send a group of US managers to whatever
country we were entering to run the business. But we
realized quickly that it made more sense to entrust the
day-to-day business operations to the local management. As
a result, today only about 70 of our 67,000-plus employees
outside the United States are US expatriates. For UPS
operations in markets like South Korea, our employees are
100-percent locals.
One of the
most important lessons we learned is that just because we
do things a certain way in the US doesn’t mean that we
should do everything the same way all over the world. In
other words, we need to be sensitive and respectful of
other cultures and business practices. Success comes much
easier when we understand and appreciate our differences
and our similarities with our international colleagues.
As UPS has
adapted its business practices to address cultural and
other differences in the global marketplace, we also have
been careful to remain true to the principles that have
proven so successful to us over the last 100 years.
Regardless of whether our customers are in quickly growing
markets like India, China and Brazil, or in more mature
markets like the UK and the US, they all require a service
partner that can connect them to their customers quickly,
efficiently and seamlessly, whether they are just across
town or on the opposite side of the planet.
The
development of the Internet and cell-phone technology has
had a profound effect on the world. The connectivity they
provide has allowed large corporations to become more
intimate with their customers while giving small
businesses a global presence and reach. All of this has
created intense competition for more demanding consumers
with access to a wider range of products and services than
ever before.
These
consumers are more expectant of a “personalized”
experience, and even though new technologies can enable
this type of interchange, they will never be an adequate
substitute for dedicated, hard-working people—something
for which UPS is well known all over the world.
As UPS’s
story continues to be written over the next 100 years, we
look forward to expanding our role as an enabler of global
commerce, connecting people and businesses in every corner
of the Earth. The world is already so integrated
economically that the vast majority of influence, the
greatest force impacting the greatest number of lives, is
business. This gives us a huge responsibility—one we must
manage with care and diligence.
We must
approach trade in a sustainable manner, making economic,
social and environmental investments that allow people,
communities and nations to share in the benefits of global
trade. While UPS’s “neighborhood” is considerably larger
and more diverse than when we first began as a small US
messenger service in 1907, the values and principles upon
which UPS was founded will continue to direct our company
well into the next century, and beyond.
Alan Gershenhorn is president of UPS International and a
member of UPS’s management committee, which oversees the
company’s day-to-day operations.
How it
started
One
hundred years ago, a 19-year-old entrepreneur named Jim
Casey borrowed $100 to start a messenger business in
Seattle,
on the US Pacific coast. From those humble beginnings grew
UPS, the world’s largest delivery company, now seen every
day on the streets throughout
Asia. With over 400,000 employees working in more than 200
countries and territories around the world, UPS is, at its
heart, the story of the American dream. But it no longer
considers itself to be just an American company: from
Ankara
to Shanghai, from Toronto to Buenos Aires, UPS is a
reflection of the global community it serves. |
