Story Of UPS & Why Do Their Drivers Keep The Door Open
United Parcel Service delivered more than 21 million packages per day in 2019, to more than 220 countries and territories including the North Pole. The company’s annual revenue is over $61 billion; employing just under half a million. The man who started UPS was somewhat shy, treated his employees as partners. How did James E. Casey AKA Jim Carey start the largest Global shipping company with a loan of $100?
Jim’s parents got married in Chicago and on March 29, 1888, they had their first child, James Emmett Casey. Jim was 9 when the family moved to Seattle, a city of only 65,000 people. Due to his father’s sickness, Jim had to quit school at 11 and found work assisting a delivery driver at the Bon Marche department store for $2.50 a week. In the meanwhile, Jim also found night shift work, at ADT. Clocking in a shift from 7 p.m. till 7 a.m, this is where he met Claude Ryan. In 1903, with the savings of $30 Jim met John Moritz. The two started a messengering service company making $50 a month delivering messages for the local telephone and telegraph office. This business was a success, but then sadly, John Moritz was shot and killed. Disheartened, Jim called the business, quits.
Jim was 19 now and got back in touch with an old friend, Claude Ryan. And they started, the American Messenger Company, on August 28, 1907. They borrowed $100 and started their service with two telephones, two bicycles, and six boys from an office in a basement. From the very beginning, they would tell their customers the truth about when they would pick up and drop off their message.
“Never promise more than you can deliver, and always deliver what you promise.” — Jim
Their first employees ran errands and made deliveries on foot and bicycle. They started charging 65 cents per message and the service was available 24–7 every week. But getting customers was not easy, as customers would call all the messenger companies and give their business to the first that arrived.
Telephones were now getting popular, so Jim and Ryan decided to work with retail stores and deliver products at customer’s doorstep. A clothing store hired American Messenger to deliver merchandise. With the new client, the company had ten messengers at work and bought their first delivery truck. As they were delivering packages for stores they changed the company’s name to Merchants Parcel Delivery.
Jim was super ambitious and wanted to serve the giant retail departments. He would approach retailers and suggest that they could save money by eliminating their large fleets of horse-drawn delivery vehicles. To make quick deliveries, in 1913, American Messenger merged with McCabe’s Motorcycle Delivery Company. With the merger, they had twenty-five messengers and six motorcycles and soon added a Ford Model T. By 1915, the company was the largest delivery service in Seattle, with four cars, five motorcycles, and thirty messengers on foot. Merchants Parcel covered 1,600 miles a day and generated $2,200 a month in revenue.
Gradually, Merchants Parcel won over three of the four biggest stores in Seattle. In the coming years, delivering for big retail clients became the new norm for the company. At the end of World War I, Merchants Parcel Delivery creating a new business model and renamed the company. The company was now called UPS.
In the following years, UPS started to buy delivery companies using stock. The combination of all purchases helped UPS deliver 2,000 packages a day just in Los Angeles, by 1929 UPS delivered more than 11 million packages. In order to expand, Jim decided to offer delivery by air, using private airlines to carry long-distance packages.
In the fall of 1929, Curtiss-Wright offered UPS, $2 million cash and 600,000 shares of Curtiss-Wright. UPS stockholders became Curtiss-Wright stockholders. UPS using the $2 million moved their headquarters to New York. The deal with Curtiss was not a bad deal as Jim and his partners were paid generous annual salaries of $25,000 each and were guaranteed management control for five years. However this was 1929, also known as the year of the Great Crash, share prices on the New York Stock Exchange collapsed. The demand for a fast air service dried up, to stay in business UPS had to end their air service.
The crash gave Jim a chance to buy his company back from Curtiss-Wright, by exchanging Curtiss-Wright stocks they had for UPS shares. Soon UPS had 159 vehicles serving thirty-seven New York stores.
By the 1950s cars were becoming popular. UPS sales were going down, but UPS had a plan, they relaunched the service they dropped off in 1931, Air Mail service, this time UPS was using commercial airlines to carry packages.
By the time Jim retired from UPS in 1962, the company had grown to operate in 31 U.S. states with annual revenue of $550 million and had 22,000 workers. However, Jim was still active in UPS management until his death in 1983. With the Air Mail operating, UPS was serving forty-eight-states, Jim reportedly told his associates, “But you know, we are only serving 5 percent of the world’s population!” He wanted UPS to go global. And so they did, in 1975, UPS started its first international operation by expanding into Canada, UPS was delivering packages internationally using Commercial airlines.
To keep up with innovation, in 1982, UPS introduced its Next-Day Air service, guaranteeing overnight delivery on certain packages. Sadly on June 6, 1983, Jim passed away.
Jim was a disciplined businessman; he treated his employees with respect. One of the things that separated him from robber barons at the time, was his acceptance of unions. He worked hard to treat all his employees right and saw the rise of the unions as an opportunity to work with them instead of fighting with them. Perhaps the most important character of Jim was his decision to share his wealth. Unlike many businesses; Jim wanted UPS employees to benefit from the company’s success. In 1927, Jim offered stock at $15 a share to 52 employees, allowing them five years to pay it off. Until his death, UPS stocks were either owned by his family or employees. It was not until 1999, sixteen years after Jim’s death, when UPS went public.
To effectively deliver packages overnight UPS started UPS Airlines in 1988. Currently, they operate with a fleet of more than 200 aircraft. Following Jim’s teaching, UPS focuses intensely on efficiency, they provide their drivers with the best driving routes, advise drivers to avoid making a left turn, to hold keys on the right side for a quick start. UPS once did a research where they found out that avoiding a left turn, reduces their annual fuel by 100 million gallons. The benefits are not just environmental, it costs UPS approximately $14.5 million per year for every min a driver stays ideal in the truck. You may have noticed that their trucks do not have a side door, one benefit of not having a side door is that it keeps them cool in summer. But also with 240,000 drivers making 120 stops a day, by not opening and closing a door every delivery, UPS saves 40,000 hours daily.
Today UPS serves more than 220 countries and territories. employs more than 434,000 people, Thanks to the man who took a risk and started a company in a basement with a $100 loan, his legacy has touched all of us in some way.
