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Shipping giant UPS to close 200 facilities to cut costs

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Shipping giant UPS will shutter 200 facilities as part of a cost-cutting plan as the company shifts towards more automated operations.

During a March 26 investor presentation, UPS laid out the “Network of the Future” initiative to cut costs by closing facilities, consolidating operations, and relying more heavily on automation. The company seeks to increase productivity through less dependence on labor to reduce the cost per package.

The initiative is expected to save UPS $3 billion by 2028.

UPS said that the company would close 200 of its more than 1000 facilities over the next five years as part of “Network of the Future.”

UPS will close 40 facilities in 2024 alone.

Also as part of “Network of the Future,” UPS will invest $9 billion in automation projects at 63 sites, mostly at existing UPS facilities.

“Over the next three years, we plan to make bold moves to create a growth flywheel in premium markets, while at the same time drive higher productivity and efficiency,” said Carol Tomé, UPS chief executive officer. “The growth and productivity initiatives we are executing will result in higher revenue, expanded operating margins and increased free cash flow to deliver long-term value to our shareowners.”

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