As part of its "Network of the Future" project, the corporation is combining facilities in an effort to save $3 billion by 2028 and minimize its labour demands.

As it moves more traffic into an increasing number of automated package hubs, UPS plans to eliminate some 200 U.S. sites, a top executive revealed on Tuesday during the transportation company's investor and analyst conference.

According to Nando Cesarone, EVP and President of UPS's U.S. operations, the firm is combining facilities as part of its "Network of the Future" program, which intends to save $3 billion by the end of 2028 by reducing UPS's reliance on manual labor in its package sorting operations.

Along with automating other parts of its operations, like package car dispatching and feeder truck volume movement in its network, UPS is shutting 40 sorts this year, up from 30 in 2023.

All of the tasks that take place inside our four walls are the focus of Network of the Future, according to Cesarone. "These automations and building consolidations result in significant savings. For instance, there won't be as many feeder runs. In a great number of places, we will be able to remove the ground and air feeds in the morning and afternoon.

An investor presentation cited the consolidation of four UPS locations in Massachusetts, Connecticut, and Rhode Island into adjacent hubs as an example of the company's cost-cutting measures. In order to accommodate volume expansion, the business also intends to close its Chalk Hill facility in Texas and its hub at Capital Village Center in New York while updating neighboring facilities.

According to Cesarone, facility consolidation will improve UPS's volume-per-resource ratio while lowering its cost of customer service. The average daily volume divided by the number of U.S. employees yields that ratio. UPS wants the ratio to rise to roughly 59 in 2026 from 51 in 2023.

UPS plans to invest in 63 automation projects across the nation in order to accommodate anticipated volume increases in a less labor-intensive way. By the end of 2028, the logistics behemoth hopes to have 400 automated buildings in its network—a more than threefold increase from its current number, according to Cesarone. Ten automation projects will originate from freshly constructed premises, but the vast majority will be finished in already-existing facilities.

Robotic devices that assist with unloading trailers and pick-and-place technologies that automate package transportation onto conveyor belts are examples of the automation currently being used in the company's network.

In the presentation, UPS Chief Digital and Technology Officer Bala Subramanian stated, "We're looking at end-to-end automation within the facility."