Interview: UPS V.P. On Shipping Technology

When Jordan Colletta talks about the way we used to ship and track and deliver goods before it became a way of life for thousands of e-entrepreneurs, he knows what he’s talking about.

For three years, starting in 1975, he was one of those guys you see running in and out of businesses and up and down driveways with packages. He was “UPS brown” before brown was cool. But while he was driving and running in New Orleans, he wasn’t just schlepping packages; he was thinking. He thought about better ways and better systems. He kept thinking and talking and working and trying to help this big shipping company stay ahead of the curve. Next thing you know, he’d become a vice president in charge of making shipping a little bit more friendly for the tens of thousands of ecommerce customers who depend on UPS to meet their customer demands.

His complete title is “vice president, customer technology marketing.” Ask him what that means, and his high standing in the UPS Toastmaster Club shows through.

Colletta: Our group is dedicated to helping find technology solutions that help our customers improve their businesses. There is great benefit from applying it to your business, but the trick is understanding which technologies you want to spend your time and money learning. As you know, when you are a small or medium-sized business, you work hard just to get the day done, let alone do extracurricular things like learn new technology.

So, what we do in my group is go out and find not only those pain points that our customers experience, but also apply solutions and then measure the benefit to the customer. Quite frankly, if something doesn’t have a high benefit to the customer, there is no reason why we should introduce it.

PeC: You mentioned pain points, something all of us have experienced in small business. Given the huge expansion of the shipping business due to the ecommerce mushroom, hasn’t UPS had some of its own pain points, technological and otherwise?

Colletta: We’ve looked at technology a little differently than most. We serve a very diverse customer base. Many, many of our customers are already good at, or are getting good at, ecommerce. From our perspective, technology has been one of those things that helps bring issues, pain points, into focus.

For example, one of our goals has always been to have a one-on-one relationship with our customers — and we’re a big company. Saying we want a one-on-one relationship takes us back to our roots in 1907. At 100 years old, we’re going back to the premise that we need to serve every single customer. But your reaction might be, “Hey, you’re such a big company that even getting to all of your customers on any given day isn’t practical.” So we look at technology as a tool to help us do that.

Now, obviously, we have our drivers out there, and they see customers every day. So we’ve equipped them with the very best technology. Those little hand-held computers they carry have all the details about all the shipments on the truck. When they walk into the customer’s place, they have everything they need to get the transaction done quickly. When they use that (hand-held) computer, the information is immediately available to the individual on the other end (shipper or receiver) in regard to the status of that shipment.
It’s a given that every shipper and every receiver wants to know where the shipment is — boy, you could say that is a pain point for UPS — but the technology that we deploy makes it very easy to have that information.

PeC: It has always been one of the best-kept secrets of great business that delivery drivers are really the front line when it comes to customer service. That appears to be very much the case with UPS.

Colletta: You know, when I think about the ecommerce seller/shipper trying to get a true ecommerce business underway, the thing you really have to rely upon is trust. Your customers, whom you have probably never seen, have to trust you and you have to trust them. What happens is that the shipping company becomes an extension of the seller. When that driver comes in to deliver (or pick up) that shipment, he/she actually represents the seller (or buyer) who may be thousands of miles away. So here’s the driver — prompt, courteous, looking for ways to help.

PeC: Let’s talk about that entrepreneur shipper who may be working out of his garage or spare bedroom. It’s no secret shipping costs have ramped up in recent times. The question for some ecommerce people is whether they are even going to be able to remain profitable. From your viewpoint, what can a businessperson do to make the most of shipping expenditures?

Colletta: From our side, we try to be very conservative, so that what a customer pays represents fair value. One of the problems for the new shipper is getting through the maze — the elements of shipping costs. You have got to break through that if you really want to get rolling. One of the things we do is help demystify this shipping transaction, which seems so complex.

I would say this to the businessperson: “Sure, you want to keep your transportation costs under control, but don’t let your transportation budget drive you to accept hidden costs that have big impacts on the bottom line.” Let me give you an example of what I mean. You’re a small ecommerce person and you made a transportation choice based on price alone. You send your goods and you send your customer an email when the goods are shipped. Next day, the customer calls and wants a status report. You look it up or make a call and get the information and pass it along. Then, the next day, your customer calls again and you do the whole thing over.

Some people think you have to put up with that to provide good customer service. But if you choose your transportation company more carefully, you can take a lot of that worry and time out of the transaction.

Your transportation provider should begin by talking with you about what I call “The Big 4:” Visibility, shipping, billing and international trade tools. Your transportation company should be able to help you in all four of those areas. It should be a visible partner in your business and help you meet the needs of your customers. Of course, it needs to move the goods. It also ought to help you make sure you account for your shipping costs correctly and then it ought to be able to help you through the maze of international shipping with all the documentation and legal requirements. Your shipper needs to provide the things that keep you from getting bogged down just because you are success.

PeC: While the answer seems obvious, I’ll ask anyway: How important is the ecommerce sector to UPS?

Colletta: Very important. It is important because we look at it as another potential dimension of every customer relationship we have. We’ve been in business for 100 years, and we have companies that have used us for generations. Of course, ecommerce wasn’t even imaginable back when we started shipping.

As our customers have evolved and changed, whether because of ecommerce or other reasons, our job and our commitment is to evolve as well, so that we become more of a help to them. When we have customers who become infatuated with ecommerce, we need to be able to help them; we can’t be on the other side. We’ve invested a billion dollars a year to make sure that we have worked through this, that we have competent systems, expertise and dedicated people who will come out and work with you. We also have UPS.com, which is a self-serve environment, where people can find business solutions.

PeC: When the world began to move into the ecommerce arena and the dot-com ascendancy began, what was it like at UPS? Do you recall management meetings? Did you have to bring some folks along kicking and screaming or was there recognition of the potential universal nature of the trend?

Colletta: I was called on to help UPS figure out how to take this ecommerce technology and harness it and put it at customers’ doorsteps. We were kind of stumped by the concept that this was going to be big, and had a hard time figuring out what exactly “big” was going to be. I will tell you this: On the UPS management side, I really have to hand it to our senior managers because they got it right away. They could have groaned and said “It’s too complex” or “That’s too hard,” but they got the concept and they backed it up with the investment.

PeC: So here we all are, neck deep in ecommerce. What’s the picture inside the Colletta crystal ball or the things on your to-do list in order to stay ahead of the curve?

Colletta: _We’ve got all the oars in the water. Once you do a thing like this you have to keep going. Once you get good at shipping, you have to stay good because there is an expectation. The same goes for visibility and bookkeeping and international transactions.
But I think the real key item on our horizon, we’re already working it, but we have to keep at it, is the whole idea of helping our small and medium-sized customers expand their businesses beyond borders. There is going to be time when people like your readers are going to see opportunities come their way from places they have never heard of. We know one of the real frontiers is helping our small and medium-sized customers take those orders and feel good about them and get them processed, not worrying about the fact that these are international orders._

So we actually provide a whole suite of technology solutions that help the customer with international documentation, understanding landed costs and who you can and cannot ship to. Our system even helps you monitor your shipments as they go through brokerage. It will help you determine the commodities classification code. If you’re not on your game in international shipping, you can incur fines and even be barred from shipping to certain countries. We want to demystify the whole international thing so that it is as easy as shipping from New York to Chicago for the newcomer to the game.

Every day, UPS moves about 15.6 million packages of all shapes, sizes and descriptions to and from points in virtually every country in the world, including some you wouldn’t even want to visit. Most ecommerce merchants and their customers know the drivers who come and go and they’ve seen the brown trucks.

But behind the trucks and their drivers is a vast network of people like Jordan Colletta who are trying to make sure the avalanche of packages created by the ecommerce boom, doesn’t become a mass whiteout that slows down the buzzing international economy.