UPS executive: Innovation, retention keys to making it through supply chain crisis

UPS executive: Innovation, retention keys to making it through supply chain crisis (Courtesy of the Jacksonville Business Journal) — Michael Kiely calls Jacksonville one of the most important logistics hubs in the Southeast, which mean business leaders on the First Coast have been particularly sensitive to ongoing supply chain challenges.

One of the leaders in the industry here and around the world is UPS. The company has been forced to deal with the same issues as its competitors, but Kiely, who is the president of global government affairs for UPS, said the company learned a lot of valuable lessons throughout the ordeal.

It found that it was doing a lot of things right, even before the pandemic changed the world. That helped with issues like employee retention and sustainability efforts.

As for the former, Kiely said UPS fought off the effects of the labor shortage by having established itself as one of the top-paying companies in the industry, leading to less turnover than others have seen.

The caveat, Kiely told an audience at Tuesday’s JaxUSA Partnership event, was that the company needed to be more aggressive in communicating that information to the workforce.

“We had to do a much better job of selling what it meant to come work for UPS,” he said. “We had to sell the fact that if you want to come work for UPS and be a Class A driver then your average salary is around $115,000 a year. If you’re looking for a pathway to the middle class, this is a great opportunity to come work for UPS.

“It’s really been an asset for us over the last several years to go out and talk about that, to go out and recruit people.”

And when people aren’t necessarily required, Kiely said investment in new technology has been key.

He talked about how the Jacksonville operation has doubled the size of its throughput with the ability to handle 1.2 million packages per day.

“Most of that was done through automation,” Kiely said. “We did hire a large number of what we call Class A feeder drivers to handle that volume. But the inside work, a lot of that was able to be done with automation, which, in today’s (environment) where there is a shortage of workers, I think that is essential.”

The commitment to innovation works in the arena of sustainability as well. Advances there reduce environmental impacts but also increase efficiency, which leads to reductions in costs.

“We started this probably 20 years ago, probably long before it was cool to do so,” Kiely said.

UPS wants to burn less fuel and use cleaner-burning fuels because it’s the right thing to do and because it adds to efficiency.

“When you spend $6 billion on fuel a year, anytime you can save a few percentage points off that, that’s real money to the bottom line,” Kiely said.

UPS, Kiely said, expects to be using 40% alternative fuels by 2025.

“We think that will be by far the most in our industry,” he said. “And then as new technologies develop, we’re going to be all over them.”

As for the company’s future in Jacksonville, Kiely said it’s a great location with a growing population. That likely means continued investment for UPS here.

“This is the center of logistics for the state of Florida,” he said. “In many ways, it’s the launching point for what happens in the Southeast. It’s unique in that it connects so many different flows of commerce. There’s not a lot of places in this country that have as many connection points as Jacksonville.

“This is the perfect place to be. That’s where our investment dollars are going to go.”

Photo courtesy of UPS