What changed in this filing

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Item 1. Business

2025-02-18 compared with 2024-02-20 · 84 added, 87 removed, 178 unchanged (49% of the section changed)

United Parcel Service, Inc.

("UPS"), founded in 1907, is the world’s premier package delivery company and a leading provider of global supply chain management solutions.

We offer a broad range of industry-leading products and services through our extensive global presence.

Our services include transportation and delivery, distribution, contract logistics, ocean freight, airfreight, customs brokerage and insurance.

We operate one of the largest airlines and one of the largest fleets of alternative fuel vehicles under a global UPS brand.

We deliver packages each business day for approximately 1.6 million shipping customers to 10.2 million delivery recipients in over 200 countries and territories.

("UPS"), founded in 1907, is a global package delivery and logistics provider.

We offer a broad range of industry-leading products and services through our extensive global presence, serving over 200 countries and territories.

Our services include transportation and delivery through our integrated air and ground network, distribution, contract logistics, ocean freight, airfreight, customs brokerage and insurance.

In 2024, we delivered an average of 22.4 million packages per day, totaling 5.7 billion packages during the year.

Total revenue in 2024 was $91.1 billion.

Our well-defined strategy focuses on growing in the parts of our market that value our end-to-end network.

We are continuing on the journey to execute our Customer First, People Led, Innovation Driven strategy as we evolve our business to be better and bolder.

Customer First is about anticipating and solving for the needs of our customers.

We strive to help our customers seize new opportunities, better compete and succeed by delivering the capabilities that they tell us matter the most:

speed and ease.

People Led specifically focuses on how likely an employee is to recommend UPS employment to a friend or family member.

We know successful outcomes are built from a strong culture and we believe that when we take care of our people, they take care of our customers.

Innovation Driven is designed to optimize the volume that flows through our network to focus on increasing value share and to drive business growth from higher-yielding opportunities in our target markets.

We continue to leverage data and automation to deliver improvements to our network and unlock additional value for our customers through innovation.

Our strategy focuses on growing in the parts of our market that value our end-to-end network, including healthcare, business to business (“B2B”), small- and medium-sized businesses (“SMBs”), and international.

We are continuing our journey to execute our Customer First, People Led, Innovation Driven strategy.

Customer First is about reducing friction in the customer experience by anticipating and solving for customers' needs.

We are focused on providing differentiated value through our capabilities and service.

We strive to enable our customers to better compete and succeed by delivering what they tell us matters the most:

speed, ease and service reliability.

People Led focuses on our employee experience and how likely an employee is to recommend UPS employment to a friend or family member.

We know successful outcomes are built from a strong culture and sense of partnership.

We believe that when we take care of our people, they will take care of our customers.

Innovation Driven is our focus on leveraging technology to optimize the volume that flows through our network.

We continually seek to improve the productivity and efficiency of our global integrated network by using technology to move from a scanning to a sensing network, including using RFID technology in our Smart Package Smart Facilities .

In the first quarter of 2025, we entered into an agreement in principle with our largest customer to significantly reduce the volume we deliver for them.

We are making a deliberate shift to increase our focus on growing higher yielding volume.

For additional information on the expected operational and financial impacts of this agreement, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

Competitive Strengths

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We believe that our integrated global air and ground network is the most extensive in the industry.

We provide all types of package services (air, ground, domestic, international, commercial and residential) through a single pickup and delivery network.

Our sophisticated systems, including our RFID-enabled Smart Package, Smart Facility technology, allow us to optimize network efficiency and asset utilization, and enhance end-to-end shipment visibility.

We provide all types of package services (air, ground, domestic, international, commercial and residential) through a single pickup and delivery network that can be configured to meet customers' needs.

Our sophisticated systems, including our RFID-enabled Smart Package Smart Facility technology, enable us to optimize network efficiency, asset utilization and enhance end-to-end visibility.

Global Presence .

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We are a global leader in developing technologies that help customers enhance their shipping and logistics business processes to lower costs, improve service and increase efficiency.

We offer a variety of digital tools and capabilities that enable customers to integrate UPS functionality into their distribution channels, deepening customer relationships.

These tools allow customers to send, manage and track their shipments, and also provide their customers with value-added data.

We offer a variety of digital tools and capabilities that enable customers to integrate UPS functionality into their distribution channels, intended to deepen customer relationships.

These tools allow customers to send, manage and track their shipments, and also provide their customers with value-added data about their shipments.

Broad Portfolio of Services .

Our service portfolio allows customers to choose their most appropriate delivery option.

Increasingly, our customers benefit from UPS business solutions that integrate our services beyond package delivery.

For example, our supply chain services are designed to improve the efficiency and resilience of customers’ entire supply chain management process.

Our service portfolio allows customers of all sizes to choose their most appropriate option.

Increasingly, our customers benefit from UPS capabilities and solutions that integrate our services beyond package delivery.

We continue to invest in specialized capabilities like our cold chain and thermal monitoring technologies, which we believe allow us to better serve our healthcare customers.

Customer Relationships .

We focus on building and maintaining long-term customer relationships.

Value-added services beyond package delivery, and connecting our small package, supply chain and digital services across our customer base, are important to customer retention and growth.

We believe value-added services beyond package delivery and connecting our small package, supply chain, digital and on-demand services across our customer base, are important to customer retention and growth.

Brand Equity .

We have built a leading and trusted brand that stands for service quality, reliability and product innovation.

We have built a leading and trusted brand that stands for service quality, reliability and innovation.

Our vehicles and the professional courtesy of our drivers are major contributors to our brand equity.

Distinctive Culture .

We believe that the dedication of our employees comes in large part from our purpose-driven culture that fosters trust, partnership and empowerment.

We believe that the dedication of our employees comes in large part from our strong, purpose-driven culture that fosters trust, partnership and empowerment.

We encourage our people to bring their unique perspectives, background, talents and skills to work every day.

Our legacy of fairness and equity is the bedrock of our culture and of our relationships with those we serve.

Financial Strength .

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Our global small package operations provide time-definite delivery services for express letters, documents, packages and palletized freight via air and ground services.

These services are supported by numerous shipping, visibility and billing technologies including our Digital Access Program, which embeds our shipping solutions directly into leading e-commerce platforms, enabling us to more broadly reach small- and medium-sized businesses and e-commerce markets.

All of our services are managed through a single, global smart logistics network.

We combine all packages within this single network, unless dictated by specific service commitments.

This enables us to efficiently pick up customers’ shipments for any services at a scheduled time each day.

Our global smart logistics network provides unique operational and capital efficiencies that also have a lesser environmental impact than single service network designs.

We offer same-day pickup of air and ground packages seven days a week.

Our global smart logistics network offers approximately 180,000 entry points where customers can tender packages to us at locations and times convenient to them.

This includes UPS drivers who can accept packages, UPS drop boxes, UPS Access Point locations, The UPS Store locations, authorized shipping outlets and commercial counters, alliance locations and customer centers attached to UPS facilities.

We offer a portfolio of returns services in more than 140 countries.

These services are driven by the continued growth of e-commerce that has increased our customers' need for efficient and reliable returns, and are designed to promote efficiency and a friction-free consumer experience.

This portfolio provides a range of cost-effective label and digital returns options and a broad network of consumer drop points.

To accelerate growth of this portfolio, in the fourth quarter of 2023 we acquired Happy Returns, a technology-focused company that is managed and reported within Supply Chain Solutions, to provide innovative end-to-end return services and a consolidated returns solution for our enterprise retail customers.

We combine all packages within our single, global network, unless dictated by specific service commitments.

This enables efficiently scheduled pick ups for any service level.

Our network provides unique operational and capital efficiencies that also have a smaller environmental impact than single service network designs.

We offer same-day pickup of air and ground packages seven days a week through a broad variety of network access points including, UPS drop boxes, UPS Access Point locations and The UPS Store locations.

UPS drivers can also directly accept packages.

We offer a portfolio of returns services in approximately 150 countries.

These returns services are driven by the continued prevalence of e-commerce that has increased our customers' needs for efficient and reliable returns and are designed to promote efficiency and a friction-free consumer experience.

Our global air operations hub is located in Louisville, Kentucky, and is supported by air hubs across the United States ("U.S.") and internationally.

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ground fleet serves all business and residential zip codes in the contiguous United States.

• Our air portfolio offers time-definite, same-day, next-day, two-day and three-day delivery alternatives.

• Our air portfolio offers time-definite, same-day, next-day, two-day and three-day delivery alternatives as well as air cargo services.

• Our ground network enables customers to ship using our day-definite ground service.

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• UPS SurePost provides residential ground service for customers with non-urgent, lightweight residential shipments.

It offers the consistency and reliability of the UPS ground network, with final delivery often provided by the U.S.

Postal Service.

Through 2024, final delivery was often provided by the United States Postal Service ("USPS").

Beginning January 1, 2025, in order to have more control over our ability to provide our customers industry-leading service, we have insourced this product.

For additional information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

International Package

International Package consists of our small package operations in Europe, the Indian sub-continent, Middle East and Africa (together "EMEA"), Canada and Latin America (together "Americas") and Asia.

We offer a wide selection of guaranteed day- and time-definite international shipping services, including more guaranteed time-definite express options than any other carrier.

For international package shipments that do not require express services, UPS Worldwide Expedited offers a reliable, deferred, guaranteed day-definite service option.

We offer a wide selection of guaranteed day- and time-definite international shipping services.

For international package shipments that do not require express services, UPS Worldwide Expedited offers a reliable, deferred, day-definite service option.

For cross-border ground package delivery, we offer UPS Standard delivery services within Europe, between the U.S.

and Canada, and between the U.S.

Worldwide Economy offers a contract-only, e-commerce solution for non-urgent, cross-border shipments.

UPS Worldwide Express Freight is a premium international service for urgent, palletized shipments over 150 pounds.

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Additionally, as one of the world’s leading non-vessel operating common carriers, we provide ocean freight full container load, less-than-container load and multimodal transportation services between most major ports around the world.

We are among the world’s largest customs brokers, measured by both the number of shipments processed annually and by the number of dedicated brokerage employees worldwide.

In addition to customs clearance services, we provide product classification, trade management, duty drawback and consulting services.

We provide brokerage services that coordinate a fleet of less-than-truckload and truckload vehicles for shipments requiring ground freight transportation in North America and Europe.

Access to the UPS fleet, combined with a broad third-party carrier network, enables us to create capacity solutions for customers of all sizes across industries, delivered through a combination of people and technology.

Customers can also access UPS services such as airfreight, customs brokerage and global freight forwarding.

We also provide customs brokerage as well as various related services.

In September 2024, we completed the divestiture of our truckload brokerage business ("Coyote").

For additional information on this divestiture, see note 8 to the audited, consolidated financial statements.

Our global logistics and distribution business provides value-added fulfillment and transportation management services.

We leverage a network of facilities in over 120 countries to seek to ensure products and parts are in the right place at the right time.

We operate both multi-client and dedicated facilities across our network, many of which are strategically located near UPS air and ground transportation hubs to support rapid delivery to business and consumer markets.

We continue to invest in the automation of our facilities to meet customer demand.

We operate both multi-client and dedicated facilities across our network, many of which are strategically located near UPS air

and ground transportation hubs to support rapid delivery to business and consumer markets.

We continue to invest in facility automation to enhance operational efficiency.

We offer world-class technology, deep expertise and a highly sophisticated suite of healthcare logistics services.

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and internationally.

In furtherance of this strategy and to broaden our reach and services, we recently acquired Bomi Group and MNX Global Logistics.

In furtherance of this strategy, we have continued to grow organically, making investments in facilities to expand our network, and inorganically, including through the acquisitions of Frigo-Trans and Biotech & Pharma Logistics in January 2025.

Digital and other Supply Chain Solutions businesses

Our digital businesses leverage technology to enable a range of on-demand services.

Roadie offers customers the convenience of same-day delivery, while Happy Returns offers innovative end-to-end return services that leverage The UPS Store network.

We also offer integrated supply chain and high-value shipment insurance solutions to both small and large businesses through UPS Capital, as well as a range of services through our other Supply Chain Solutions businesses.

We believe these services are important to meeting customers' needs and deepening customer relationships.

Roadie, our crowdsourced delivery platform, offers the convenience of same-day delivery and efficient service for packages that are not compatible with our small package network.

Happy Returns offers innovative end-to-end return services that leverage The UPS Store network.

We also offer integrated supply chain and high-value shipment insurance solutions through UPS Capital, as well as a range of services through our other Supply Chain Solutions businesses.

We believe these services better enable us to meet customers' needs and deepen customer relationships.

Human Capital

Our success is dependent upon our people, working together with a common purpose.

As we seek to capture new opportunities and pursue growth, we believe that transforming the UPS employee experience is foundational to our success.

This requires a thoughtful balance between the culture we have cultivated over the years and the new perspectives we need to take the business into the future.

We believe that UPS employees are among the most motivated and highest performing in the industry and provide us a competitive advantage.

To assist with employee recruitment and retention, we continue to review the competitiveness of our employee value proposition, including benefits and pay, training, talent development and promotion opportunities.

Our success is dependent upon our people, working together with a shared purpose.

As we seek to capture new opportunities and pursue growth, we are focused on maintaining the culture we have cultivated over our nearly 118-year history and incorporating the new perspectives we need to take the business into the future.

For additional information on the importance of our human capital efforts, see "Risk Factors - Business and Operating Risks - Failure to attract or retain qualified employees could materially adversely affect us" and "- Strikes, work stoppages or slowdowns by our employees could materially adversely affect us".

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Many of these employees are employed under a national master agreement and various supplemental agreements with local unions affiliated with the International Brotherhood of Teamsters ("Teamsters").

In the third quarter of 2023, the Teamsters fully ratified a new national master agreement that expires July 31, 2028.

Our national master agreement with the Teamsters expires on July 31, 2028.

In addition, approximately 3,300 of our pilots are represented by the Independent Pilots Association ("IPA").

Our agreement with the IPA becomes amendable September 1, 2025.

We have approximately 1,900 airline mechanics who are covered by a collective bargaining agreement with Teamsters Local 2727 which becomes amendable November 1, 2026.

In addition, approximately 3,000 of our auto and maintenance mechanics who are not represented by the IBT are employed under a collective bargaining agreement with the International Association of Machinists and Aerospace Workers ("IAM").

In July 2024, the IAM ratified a new collective bargaining agreement that will expire on July 31, 2029.

During 2024, we executed under our "Fit to Serve" initiative, intended to right-size our business and create a more efficient operating model to enhance responsiveness to changing market dynamics.

During 2024, we reduced our workforce by approximately 14,000 positions, primarily within management.

Fit to Serve is expected to conclude in 2025.

In January 2025, we announced a reconfiguration of our U.S.

network and Efficiency Reimagined initiatives.

We expect these actions to result in decreases in the size of our operational and management workforce.

For additional information on the expected operational and financial impacts of these initiatives, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

Oversight and management

We seek to create an inclusive and equitable environment that brings together a broad spectrum of backgrounds, cultures and stakeholders.

We believe leveraging diverse perspectives and creating inclusive environments improves our organizational effectiveness, cultivates innovation, and drives growth.

Our board, directly and through the Compensation and Human Capital Committee, is responsible for oversight of human capital matters.

Effective oversight is accomplished through a variety of methods and processes including regular updates and discussions around human capital transformation efforts, technology initiatives impacting the workforce, health and safety matters, employee survey results related to culture and other matters, hiring and retention, employee demographics, labor relations and contract negotiations, compensation and benefits, succession planning and employee training initiatives.

In addition, the Compensation and Human Capital Committee charter has been expanded to include oversight responsibility for performance and talent management, diversity, equity and inclusion, work culture and employee development and retention.

Effective oversight is accomplished through a variety of methods and processes including regular updates and discussions around human capital transformation efforts, technology initiatives impacting the workforce, health and safety matters, employee survey results related to culture and other matters, hiring and retention, employee backgrounds, labor relations and contract negotiations, compensation and benefits, succession planning and employee training initiatives.

In addition, the Compensation and Human Capital Committee charter includes oversight responsibility for performance and talent management, workforce representation, work culture and employee development and retention.

We believe the board’s oversight of these matters helps identify and mitigate exposure to labor and human capital management risks and is part of the broader framework that guides how we attract, retain and develop a workforce that aligns with our values and strategies.

Additional information on our human capital efforts is contained in our annual sustainability report, which describes our activities that support our commitment to acting responsibly and contributing to society.

This report is available under the heading "Social Impact" at www.about.ups.com .

This report is available under the heading "Our Impact" at www.about.ups.com.

Collective bargaining

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UPS conducts audits to assess specific risks and hazards, including equipment safety, workplace environment, and emergency response protocols.

We monitor our safety performance through various measurable targets, including lost time injury frequency and the number of recorded auto accidents.

We monitor our safety performance through various measurable targets, including recordable injury frequency, lost time injury frequency and the number of recorded auto accidents.

Building and maintaining long-term customer relationships through superior service is a competitive strength of UPS.

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Domestic Package segment.

For additional information on our customers, see "Risk Factors - Business and Operating Risks - Changes in our relationships with any of our significant customers, including the loss or reduction in business from one or more of them, could have a material adverse effect on us" and note 14 to the audited, consolidated financial statements.

In the first quarter of 2025, we entered into an agreement in principle with this customer that will provide for a reduction in their volume by more than 50% by June 2026.

For additional information on the expected operational and financial impacts arising from this agreement, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

For additional information on this and other customers, see "Risk Factors - Business and Operating Risks - Changes in our relationships with any of our significant customers, including the loss or reduction in business from one or more of them, could have a material adverse effect on us" and note 14 to the audited, consolidated financial statements.

We offer a broad array of transportation and logistics services and compete with many local, regional, national and international logistics providers as well as national postal services.

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is subject to similar regulatory schemes in the countries in which we transport those packages.

The Postal Reorganization Act of 1970 created the U.S.

Postal Service as an independent establishment of the executive branch of the federal government, and created the Postal Rate Commission, an independent agency, to recommend postal rates.

The Postal Accountability and Enhancement Act of 2006 amended the 1970 Act to give the re-named Postal Regulatory Commission revised oversight authority over many aspects of the U.S.

Postal Service, including postal rates, product offerings and service standards.

The Postal Reorganization Act of 1970 created the USPS as an independent establishment of the executive branch of the federal government, and created the Postal Rate Commission, an independent agency, to recommend postal rates.

The Postal Accountability and Enhancement Act of 2006 amended the 1970 Act to give the re-named Postal Regulatory Commission revised oversight authority over many aspects of the USPS, including postal rates, product offerings and service standards.

As a result of recent changes in the USPS operating model, in January 2025 we announced that we have begun delivering 100% of our SurePost volume.

We sometimes participate in proceedings before the Postal Regulatory Commission in an attempt to facilitate compliance with fair competition requirements for competitive services.

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We are subject to the customs laws regarding the import and export of shipments in the countries in which we operate, including those related to the filing of documents on behalf of client importers and exporters.

Our activities in the U.S., including customs brokerage and freight forwarding, are subject to regulation by the Bureau of Customs and Border Protection, the TSA, the U.S.

Our activities in the U.S.,

including customs brokerage and freight forwarding, are subject to regulation by the Bureau of Customs and Border Protection, the TSA, the U.S.

Federal Maritime Commission and the DOT.

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Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports filed with or furnished to the SEC pursuant to Section 13(a) of the Securities Exchange Act of 1934 are made available free of charge on our investor relations website under the heading "Investors - SEC Filings" as soon as reasonably practical after we electronically file or furnish the reports to the SEC.

Our Code of Business Conduct, which applies to all of our directors, officers and employees, including our principal executive and financial officers, our Corporate Governance Guidelines and the charters for our Audit, Compensation and Human Capital, Risk, and Nominating and Corporate Governance Committees are also available on our investor relations website under the heading "Investors – Sustainability – Governance Documents".

Human Capital, Risk, and Nominating and Corporate Governance Committees are also available on our investor relations website under the heading "Investors – Corporate Governance".

In the event that we make changes in, or provide waivers from, the provisions of the Code of Business Conduct that the SEC requires us to disclose, we intend to disclose these events within four business days following the date of the amendment or waiver under that heading on our investor relations website.

Our sustainability reporting, which describes our activities that support our commitment to acting responsibly and contributing to society, is available under the heading "Social Impact" at www.about.ups.com .

Our sustainability reporting, which describes our activities that support our commitment to acting responsibly and contributing to society, is available under the heading "Our Impact" at www.about.ups.com .

We provide the addresses to our websites solely for information.

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Disclosures Required Pursuant to Section 13(r) of the Securities Exchange Act of 1934

We maintain robust economic sanctions compliance procedures designed to promote compliance with applicable sanctions laws.

However, it is possible that from time to time we may inadvertently pick up packages from, or deliver packages to, individuals or entities that result in required disclosure under Section 13(r).

As a component of our compliance procedures, from time to time we undertake additional reviews of historical transactions.

Based on our most recent review, from August 2018 to the date of this filing, in addition to previously disclosed deliveries we inadvertently delivered to:

Bank Melli – 2 shipments (revenue of $18.84, loss of $3.98);

the E mbassy of Iran (revenue of $7.81, loss of $0.65);

Syrian Airlines (revenue of $7.70, profit of $0.72);

Irasco SRL – 2 shipments (revenue of $11.59, loss of $1.08);

Stark 1 (revenue of $7.33, profit of $2.02);

Fanreach (revenue of $9.74, profit of $2.76);

and Wael Bazzi (revenue of $4.74, loss of $2.29).

The information provided pursuant to Section 13(r) of the Exchange Act in Item 5 of Part II of the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 is incorporated by reference herein.

We do not intend to further pick up from or deliver to these parties, and we intend to continue to implement process improvements designed to better identify and prevent potential shipments to or from restricted parties.

The Company had no reportable transactions during the quarter ended December 31, 2024.

The information provided pursuant to Section 13(r) of the Exchange Act in Item 5 of Part II of the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 is incorporated by reference herein.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business