United Parcel Service Crisis Management

2 UPS Network Planning Group Founded: August 28, 1907, in Seattle, Wash., USA World Headquarters: Atlanta, Ga., USA World Wide Web Address: Chairman & CEO: Scott Davis 2009 Revenue: $45.3 billion Employees: 408,000 Worldwide (340,000 U.S.; 68,000 International) 2009 Revenue: $37.9 billion 2009 Delivery Volume: 3.8 billion packages and documents (15.1 million per day) Service Area: More than 200 countries and territories; Every address in North America and Europe Operating Facilities: 1,801 Delivery Fleet: 96,105 package cars, vans, tractors, motorcycles, including 2,060 alt-fuel vehicles UPS Jet Aircraft Fleet: 214 in service (253 aircraft total; among Top 9 in the world) United Parcel Service Worldwide Facts

3 UPS Network Planning Group Crisis Management Mission Statement We seek to maintain a constant state of readiness should UPS become exposed to an unexpected act of a critical magnitude We maintain a crisis management strategy model to assist us in the prevention, response and restoration of our business We strive to protect the reputation and interests of UPS, Our People, Our Customers, Our Shareowners, and Our Communities We will conduct ourselves responsibly, sincerely, honestly and with the utmost integrity to ensure the safety, security and well-being of all of our stakeholders United Parcel Service Crisis Management

4 UPS Network Planning Group United Parcel Service Crisis Management Crisis Management Corporate team to address needs of company during crisis situations Cross functional team to insure minimal disruption and visibility to our customers –Department heads or designee from each function –Designated members from function to provide detailed planning for all levels –Operations, Human Resources, Communications, etc. The following slides will address the transportation portion of the Crisis Management structure at UPS

5 UPS Network Planning Group United Parcel Service Crisis Management - Transportation Contingency Short term Usually weather related Alternate Ops Long term Disaster situation

6 UPS Network Planning Group United Parcel Service Crisis Management - Transportation Contingency Short term operating disruption –Winter storms, hurricanes, etc Diversion of volume –Alternate locations –Minimize service impact Alternative modes of transportation –Delay movement into affected area –Rail vs Ground –Ground vs Air –Temporary, ad-hoc changes Customer notification –Service impact

7 UPS Network Planning Group United Parcel Service Crisis Management - Transportation Contingency Planning handled locally District implementation Support from Regions/Corporate –Scope of situation will determine support requirements Return to normal operating plans

8 UPS Network Planning Group United Parcel Service Crisis Management - Transportation Contingency - Consequences Staffing –During disruption (individuals affected) –Post disruption (catching up) Cost –Transportation around affected area –Staffed operations with no work –Insufficient staffing when “catching up” Service –Local delays during disruption are expected –Network delays due to disruption are not expected

9 UPS Network Planning Group United Parcel Service Crisis Management - Transportation Contingency – Keys to Success Communication –Our people –Our customers Managing expectations –Our people –Our customers

10 UPS Network Planning Group United Parcel Service Crisis Management - Transportation Alternate Ops Long term operating disruption –Loss of facility (catastrophe, pandemic, etc) Diversion of volume –Alternate locations –Minimize service impact Alternative modes of transportation –New trains –Re-routing of ground feeds –Re-routing aircraft –Permanent, long-term changes Transparent to customer –Service impact

11 UPS Network Planning Group United Parcel Service Crisis Management - Transportation Alternate Ops Planning handled through Corporate Pre-determined plans Corporate/region team implementation Plan becomes the “norm”

12 UPS Network Planning Group United Parcel Service Crisis Management - Transportation Alternate Ops - Consequences Staffing –Available workers are not in area where recovery operations exist –Existing workers not available due to disaster (Pandemic) Cost –Initial contingency operation until Alternate Op in place –Alternate Op typically a more expensive plan Service –Initial contingency will cause temporary service issues –Cost vs maintaining existing service levels –Alternate Ops are planned at current service levels –Operating costs could be reduced with change of service

13 UPS Network Planning Group United Parcel Service Crisis Management - Transportation Alternate Ops – Keys to Success Communication –Our people –Our customers Managing expectations –Our people –Our customers

14 UPS Network Planning Group United Parcel Service Crisis Management - Transportation SUMMARY Maintain good Contingency and Alternate Op plans –Update as necessary when operating conditions change –Make sure employees understand the plan Role play scenarios to ensure actions are sound –Make sure everyone knows their role Hope that you never have to use plans, but if you do, communicate clearly with the people and the customers

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