Rudy Lai

AI @ UPS

Global package and freight delivery
Industry
Last updated
July 3, 2025 at 10:44 AM

Summary

  • UPS has steadily expanded its AI adoption from early customer service chatbots in 2018 to extensive operational automation and optimization by 2025, enabling significant cost savings and workforce restructuring.
  • Key initiatives include AI-powered package tracking and theft prevention, dynamic pricing, network capacity optimization, and integration of robotics (including humanoid robots), resulting in over $1 billion in annual savings and a 25-40% reduction in costs.
  • By mid-2025, AI-driven automation has replaced approximately 43,000 roles, reduced labor hours by 10%, and supported advanced customer service solutions with a 79% sales win rate AI tool, underlining UPS’s deep operational reliance on AI technologies.

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6 AI Use Cases at UPS

Workforce optimization
2025
Traditional
Generative
Agentic
Outcome
Costs
AI-driven automation and predictive analytics guide workforce reductions, optimize labor hours, and restructure management to improve operational efficiency. [1][2]
Robotics integration
2025
Traditional
Generative
Agentic
Outcome
Costs
UPS collaborates with robotics startups to deploy humanoid and pick-and-place robots to assist staff and automate logistics tasks. [1][2]
Dynamic pricing
2025
Customer Facing
Traditional
Generative
Agentic
Outcome
Revenue
AI analyzes historical transaction data to identify revenue growth and margin improvement opportunities through optimized pricing strategies. [1]
Theft prevention
2023
Traditional
Generative
Agentic
Outcome
Risk
Machine learning models analyze delivery patterns and location data to detect and prevent package theft through the DeliveryDefense program. [1][2]
Package sorting
2023
Traditional
Generative
Agentic
Outcome
Costs
AI and robotics technologies are used to optimize and automate package sortation, improving processing speed and network capacity. [1][2]
Customer support
2018
Customer Facing
Traditional
Generative
Agentic
Outcome
UPS uses AI chatbots and generative AI models to respond to customer queries, streamline customer service, and reduce response times. [1][2][3]

Timeline

2025 Q4: no updates

2025 Q3

2 updates

AI-driven automation reduces UPS workforce by 43,000 over three years, cuts labor hours by nearly 10%, and generates $1 billion in annual savings with up to 40% cost reductions. CEO Carol Tomé emphasizes AI's superior speed and accuracy over humans.

2025 Q2

5 updates

UPS explores humanoid robot partnerships with Figure AI; employs AI for dynamic pricing and workforce adjustment; adopts AI-tolerant UPS power systems for data center resilience.

2025 Q1

1 updates

Concerns about power supply reliability in AI data centers highlighted as UPS supports AI infrastructure demand.

2024 Q4

1 updates

UPS continues broad AI transformations, implementing generative AI for customer service automation and machine learning for logistics optimization.

2024 Q3: no updates

2024 Q2

3 updates

UPS Capital uses Google Cloud and AI to secure package delivery against porch piracy; generative AI streamlines customer service; new UPS Velocity facility utilizes smart automation and AI.

2024 Q1

2 updates

AI leveraged internally to enhance employee career development via Languages Across Logistics platform; workforce impacted by layoffs linked to AI efficiency gains.

2023 Q4

2 updates

Expansion of DeliveryDefense program utilizing machine learning to fight package theft using data such as location and delivery attempts.

2023 Q3

2 updates

UPS deploys AI and machine learning to improve package sorting efficiency with robotics partners like Dexterity and Plus One Robotics, enhancing network capacity and employee experience.

2023 Q2: no updates

2023 Q1: no updates

2022 Q4: no updates

2022 Q3: no updates

2022 Q2: no updates

2022 Q1: no updates

2021 Q4

1 updates

UPS leverages AI-powered solutions including chatbots and dynamic routing, saving approximately $200 million annually through operational efficiencies.

2021 Q3: no updates

2021 Q2: no updates

2021 Q1: no updates

2020 Q4: no updates

2020 Q3: no updates

2020 Q2: no updates

2020 Q1: no updates

2019 Q4: no updates

2019 Q3: no updates

2019 Q2: no updates

2019 Q1: no updates

2018 Q4: no updates

2018 Q3: no updates

2018 Q2

1 updates

UPS begins using AI-enabled chatbots to enhance customer interaction by providing location info and package tracking via conversational interfaces.