- Euro Zone Economy to Shrink in 2012, EU Stagnates
- Santorum Takes Heavy Fire in Arizona Republican Debate
- Winners and Losers in Obama's Corporate Tax Plan
- Stocks Sputter as Investors Seek Next Catalyst
- Where Are UK House Prices Headed?
- Greece Readies Debt Swap Under Bailout Deal
- RBS Hurt by Greek Charges But Pays Bonuses
- Nissan to Recall 250,000 Cars Globally
- T-Mobile USA Wants to Grow Again
- Nike CEO Mark Parker Talks Olympic Product Line
- Wandering Through Toy Land
- Dell Is Done, But Don't Discount HP: Analysts
- Comcast Deal Could Spell Trouble for Netflix: Analyst
- Reading the Tea Leaves in RIM Shake-Up
- Sam Adams Brewer Crafts Beer for the Granddaddy of All Marathons
- Stocks to Give Up for Lent
- You Want Retail Customers? Give Them Deals: Analysts
- NJ Governor Chris Christie to Warren Buffett: 'Just Write a Check and Shut Up'
MOST SHARED
- Euro Zone Economy to Shrink in 2012, EU Stagnates
- T-Mobile USA Wants to Grow Again
- Wife of UK's Tony Blair Sues Over Phone Hacking
- Greece Readies Debt Swap Under Bailout Deal
- German February IFO Index Rises 4th Month in Row
- HP, Dell Watch Rising China Labor Costs for Apple
- Global Markets Update: European Stocks Flat On Euro Zone Economic Outlook
- Greek Writedown Hits Commerzbank Earnings
- UK and Japan Warn Volcker Rule Poses Threat to Recovery
- Santorum Takes Heavy Fire in Arizona Republican Debate
HOT ON FACEBOOK
How UPS, Fed Ex Move 25 Million Packages a Day
Text Size 
CNBC Reporter
Brian A. Shactman
CNBC Reporter
Fed Ex and UPS deliver nearly 6.5 billion packages a year. For perspective, that's about one package for every person on the planet. What's more incredible is that an unbelievably high percentage of them are delivered on time, regardless of weather, distance or size of package.
"Our customers don't care that it's sleeting and snowing," said Fed Ex's Dan Allen, who works on the airline side of the business. "They want their package, and they want it delivered on time tomorrow."
When you first look at the two companies, it's reminiscent of some other high-profile duopolies. Coke and Pepsi. McDonalds and Burger King. Boxers and briefs. They're in similar spaces, and from afar, they might look the same, but they're not.
UPS [UPS
Loading...
()
] is more than a century old and has been synonymous with package delivery as America has navigated itself from the industrial revolution to the technology revolution.
 |
AP |
Then, there's Fed Ex [FDX
Loading...
()
]. Fred Smith founded what was then known as Federal Express decades later in the 1970s.
The company quickly transformed the concept of the overnight delivery. On its first night in business, Federal Express delivered 186 packages. By the late 1990s, Federal Express became Fed Ex, and volume hit 8 million.
In 2012, Fed Ex and UPS have combined revenue of more than $90 billion and process about 25 million packages A DAY.
They do it through a network of hundreds of airplanes, thousands of trucks and hundreds of thousands of employees.
Understanding the scale of execution actually begins at the airport. For Fed Ex, it's an 832-acre complex in Memphis dubbed the "Superhub."
The hub is so busy that Memphis International Airport is now the busiest cargo airport in the United States.
UPS' central location is in Louisville, Ky., and is called Worldport. Every night, 125 planes land, unload, re-fuel, re-load, depart ... all within a matter of hours.
Worldport can sort up to 416,000 packages per hour. In a night: 1 million. During peak season, like Christmas, UPS processes 1.6 million packages at the Louisville facility alone.
 |
Getty Images |
In case you were wondering, both Louisville and Memphis were chosen because they are about a two-hour plane trip from most of the U.S. and rarely do the cities experience severe weather.
Every night, the planes land and huge containers are unloaded and taken into the sorting center. The packages are scanned and then travel miles on automated conveyor belts. They are mechanically diverted into several directions until finally landing in a bag. That bag finds itself in another container and then back on another plane, headed for it's final destination.
The whole process takes just a few hours, and what's even more impressive: sometimes only two sets of hands touch them the entire time.
And when you watch the packages stream by at one in the morning, it's easy to see where the growth is: Online retail.
Boxes branded with Wal-Mart, Dell, Hewlett Packard ... Amazon.
"They comprise a lot of our business," said Mike Nepaul, who runs Worldport for UPS. "We'll probably do about 20-40 percent of their volume here, depending on the day."
And during peak times like the holidays, the nightly sort brings added pressure. Mistakes mean presents don't get delivered.
"It's about twice the freight, so I'll say it's about twice the stress," said Chuck Bryson who uses remote controls and more than 250 cameras to route packages throughout the Fed Ex facility in Memphis.
No matter the stress level surrounding the 25 million combined packages delivered by the two shipping giants, the goal is to make customers notice one thing: an on-time and un-damaged delivery. And more than 99 percent of the time, that is the case.
Follow Brian Shactman on Twitter: @bshactman
________________________________
 |
UPS/Fed Ex: Inside the Package Wars premieres Premieres Monday, Jan. 23 at 9p ET.
- People who check a smartphone will soon have another option: Google-made glasses that stream information to the eyeballs.
- How does a business handle complaints on a social network site that goes out to millions of consumers?
- Dr. Ezekiel Emanuel lays out the changes ahead from the Obama healthcare legislation he helped design. Does reform mean greater access and affordability?
- Should a mom or dad stay at home to take care of the kids? It’s a tough issue these days. Here’s Suze Orman’s take.
- Corruption is a major issue in developing and developed nations. So which are perceived as the most corrupt?
- While the handheld gaming market has evolved in recent years, Sony's betting there's still money to be made.
Data is a real-time snapshot *Data is delayed at least 15 minutes
