UPS Ups Its Shipping Game

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Senior Entrepreneurship Writer at CNBC
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The Internet is bringing more and more shoppers and retailers online. That means a lot of customers are receiving a lot of packages in the mail. But here’s the rub: For some people, receiving packages is a challenge. If a person lives in a city, works full time and doesn’t have a doorman, then disappearing packages are a real problem.

That’s why UPS announced today that U.S. consumers will be able to opt to have their packages delivered to local businesses, including pharmacies, grocery stores, laundromats and convenience shops in their neighborhood.

The program, called “Access Points” was born out of UPS’s 2011 acquisition of Kiala, a Belgium-based company that was already operating a similar model in . UPS has been testing the UPS Access Points program in the U.S. since July.

Related: UPS Makes 3-D Printers Available in Nearly 100 Stores Nationwide

The program is targeted at city dwellers, since UPS is able to deliver the “vast majority” of packages on the first attempt, says Geoff Light, President of Product Development at UPS.

“When customers in certain geographies -- like New York and and Paris and and all these other cities -- sometimes when consumers shop, they have real difficulty delivered,” says Light. “In those circumstances, there are potential online customers that are stranded in this ecommerce growth. They can’t participate because it is so difficult. So they shop online and then buy in the store.”

Local businesses sign up to be a UPS Access Point, and while they make “significantly less than $1 per package,” the benefit of serving as a package pick up point for the neighborhood is increased foot traffic, says Light. Ideally, if a resident picks up a package at the neighborhood , then he or she will also pick up tomatoes and cheese at the same time.

Make no mistake. Access Points is helpful for consumers and good for e-tailers, but it is also good for UPS. The more customers pick up their packages in one local hub, the fewer stops a UPS truck has to make. That saves UPS time, gas money, labor wages and room on the truck. “It is absolutely more efficient for us to make one successful delivery than multiple failed delivery,” says Light.

Related: To Beat Ecommerce Rivals, Know Your Shipping Options

Also today, UPS announced that it would be launching the MyChoice delivery service in Austria, Belgium, Canada, Denmark, France, Germany, Italy, Mexico, Netherlands, Poland, Puerto Rico, Spain, Sweden, Switzerland and the United Kingdom. The MyChoice delivery service allows customers to track their package online or through an app to plan for when and where the package should be delivered. Already, 10 million U.S. consumers use MyChoice.

Today’s announcement shows that UPS is hustling in a hot market. As ecommerce explodes, the shipping industry is being forced to innovate. Seattle-based e-commerce giant Amazon lets customers ship to secure lockers where they can pick up their package at any time. Tech giant Google has a same-day delivery service of goods from local shops and retailers. And shipping startups like Shyp and Doorman are also looking for a piece of the shipping pie.

UPS says that it has been aware of needing to find a better solution for delivering packages to city dwellers for some time. “It has been on our radar screen to solve for many, many years,” says Light. UPS needed technology to develop to the point that it could forecast to a consumer when a package would be delivered and technology to be able to redirect packages in real time. “It is solving an age old problem but lots of things had to come together for it to be able to come together.”

Related: FedEx, UPS and the Postal Service: Where Shipping Rates Are Headed

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