AI Case Study

UPS saves over 10 million gallons of fuel and up to $400m in costs annually with advanced telematics and analysis

UPS makes 16.9m package and document deliveries every day and over 4 billion items shipped per year through almost 100,000 vehicles. A ten year project has focused on optimising delivery routes with regards to distance, fuel and time based on telematics data such as speed, idling, and driving style. In 2016 they claimed annual savings of 10 million gallons of fuel and up to $400m in costs.

Industry

Transportation

Freight And Logistics

Project Overview

"ORION is a 1,000-page, algorithmic optimization. It's a technique for faster, more practical problem solving, providing a solution for an immediate situation, even if it is neither optimal nor perfect. ORION doesn't necessarily map the perfect route or even the best one. Rather, ORION gives UPS drivers workable routes, based on experience. It learns over time and speeds up the process. It gets smarter."

"Implementing the solutions to gather the data called for an algorithm that could quickly solve complex routing problems. UPS tested the resulting ORION algorithm at various sites from 2003 to 2009; prototyped it at eight sites between 2010 and 2011; and deployed it to six beta sites in 2012. In a company with the size, scale and scope of UPS, even a small change can have huge implications. For UPS, eliminating one mile, per driver, per day over one year can save up to $50 million."

Reported Results

"By the end of 2016, 55,000 ORION-optimized routes will have saved 10 million gallons of fuel annually, reduced 100,000 metric tons in CO2 emissions and saved an estimated $300 million to $400 million in cost avoidance.

'ORION has been a game changer for UPS, impacting 55,000 drivers across 1,000 buildings in the United States when it is fully deployed," says Mark Wallace, senior vice president of global engineering and sustainability."

Technology

Advanced analytics

Function

Supply Chain

Logistics

Background

"On a daily basis, UPS makes 16.9m package and document deliveries every day and over 4 billion items shipped per year through almost 100,000 vehicles. With this volume, there are numerous ways UPS uses big data, and one of the applications is for fleet optimization."

"By optimizing delivery routes in regard to distance, fuel and time, ORION (On-Road Integrated Optimization and Navigation) seeks to solve the Traveling Salesman Problem, which has stumped scientists for more than 200 years."

Benefits

Data

A "detailed picture of the driver's – and the truck's – day, capturing data on more than 200 vehicle-related elements from speed, RPMs, and oil pressure to seatbelt use, the number of times the truck is placed in reverse, and the amount of time spent idling.