Just Like Derek Zoolander, UPS Drivers Can’t Turn Left
Each day, UPS drivers deliver an average of 120 packages. The number of potential route combinations for a driver is “far greater than the number of nanoseconds the earth has existed” (2). To ensure UPS drivers use “the most optimized delivery routes in regard to distance, fuel and time”, UPS began developing On-Road Integrated Optimization and Navigation (ORION) software in 2003, which included eliminating left turns (2).
An Operating Model with a Business Opportunity:
Today, about 90% of the turns that a UPS delivery truck makes are right turns (3). Using an internally developed route optimization technology called On-Road Integrated Optimization and Navigation (ORION), UPS not only saved over 1.5 million gallons of fuel in 2012, but it also eliminated 206 million minutes of driver idle time, enabling it to deliver more packages quicker (4).
Beginning in 2003 UPS put its theory to the test that cutting down on left turns for its delivery trucks at major intersections would reduce operating costs, reduce the risk of accidents and enable it to perform more deliveries quicker (2). Through GPS tracking and installed vehicle sensors, UPS monitored its drivers and confirmed that reducing left turns did cut costs and delivery times (2). With this data, UPS invested heavily in developing its proprietary ORION route optimization software. With an algorithm running over 1,000 pages of code (2), ORION crunches “millions of trillions of potential route options” (~6.7×10^198 on average (5)) within seconds to determine the most efficient delivery routes for drivers (6). With over 10,000 of its 55,000 routes using ORION, a reduction of one mile per day per UPS driver can save UPS over $50 million a year in fuel costs (2). While UPS doesn’t publish statistics for the incremental packages ORION helps drivers deliver or how traffic accidents have been reduced with a decrease in left turns, UPS’ commitment to the ORION program and other public data suggests both of these improvements are significant. A 2001 report by the National Highway Traffic Safety Administration found that 14.7% of commercial vehicle intersection crashes occur when making a left turn into oncoming traffic while only 7.0% of commercial vehicle intersection crashes occur when making right turns (8). By reducing the number of left turns its drivers make, UPS has likely realized a significant drop in the number of accidents involving its drivers, which also enables UPS to keep more trucks on the road and fulfill deliveries quicker.
Given these positive returns from ORION’s effectiveness for both the Company and its customers, UPS remains fully committed to ORION’s integration. UPS expects to finish deploying the system to its 55,000 routes in North America by 2017 (2). With savings of even $1.00-2.00 per truck per day, UPS’ CEO David Abney expects ORION to save the Company “$300-$400 million per year, once it is fully implemented” (5).
ORION is Good, but not Perfect:
Even with UPS’ continuous investment in systems like ORION, it is curious that one still often sees multiple UPS trucks at the same delivery location or crossing paths while on the road. As one UPS driver commented, it’s unclear why ORION might tell him “to deliver to a neighborhood but skip some houses, leaving some stops in the area for another driver” (5). Though UPS sees significant value in ORION, surely it can still further improve route optimization. With an average of 120 deliveries per day with multiple deliveries in the same neighborhood, it seems illogical that a UPS driver might still average almost 120 miles per day (5). As discussed in our study of UBER’s technology, increasing users in UPS’ shipping network through passing along cost savings should increase delivery batching opportunities and cut down on overall mileage in a given day. However, UPS’ CEO David Abney acknowledges that ORION is “not an endgame” but rather a dynamic “platform” where it might make sense for a driver to “abandon” ORION’s instructions. Yet, as its drivers become more dependent on this technology it is harder to justify when and why human judgement should overrule the millions and trillions of calculations behind ORION’s route optimization (5). Not so long ago software used to be “clunky” and “slow”, requiring obvious human intervention. But it’s not always so clear anymore when our technology is being illogical or when it’s being so unfathomably efficient that humans could never have so efficiently solved these problems intuitively. UPS thinks it’s found a strong answer to delivering both financial results through costs savings and also increasing package deliveries quicker and cheaper to its customers with ORION. Competition is fierce in the parcel industry and time will tell how much of a competitive edge ORION might help give UPS, even if the delivery directions don’t always make the most sense.
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- quickmeme. [Online] [Cited: November 17, 2016.] http://www.quickmeme.com/meme/3qligw.
- ORION Backgrounder. UPS Pressroom. [Online] UPS. [Cited: November 17, 2016.] https://www.pressroom.ups.com/pressroom/ContentDetailsViewer.page?ConceptType=Factsheets&id=1426321616277-282.
- McFarland, Matt. The case for almost never turning left while driving. The Washington Post. [Online] April 9, 2014. [Cited: November 17, 2016.] https://www.washingtonpost.com/news/innovations/wp/2014/04/09/the-case-for-almost-never-turning-left-while-driving/.
- Schlangenstein, Mary. UPS Crunches Data to Make Routes More Efficient, Save Gas. Bloomberg. [Online] October 30, 2013. [Cited: November 17, 2016.] http://www.bloomberg.com/news/articles/2013-10-30/ups-uses-big-data-to-make-routes-more-efficient-save-gas.
- Stevens, Steven Rosenbush and Laura. At UPS, the Algorithm Is the Driver. The Wall Street Journal. [Online] February 16, 2015. [Cited: November 17, 2016.] http://www.wsj.com/articles/at-ups-the-algorithm-is-the-driver-1424136536.
- When Left is Right. UPS Pressroom. [Online] UPS. [Cited: November 17, 2016.] https://pressroom.ups.com/pressroom/ContentDetailsViewer.page?ConceptType=Speeches&id=1429121865101-333.
- Administration, National Highway Traffic Safety. Analysis of Crossing Path Crashes. s.l. : U.S. Department of Transportation, July 2011. DOT-VNTSC-NHTSA-01-03 .
- Shontell, Alyson. Why UPS Is So Efficient: “Our Trucks Never Turn Left”. Business Insider. [Online] March 24, 2011. [Cited: November 17, 2016.] http://www.businessinsider.com/ups-efficiency-secret-our-trucks-never-turn-left-2011-3.
Hello Johnny Appleseed!
Nice post, I was not aware of this software route optimization package. Do you know what the hierarchy of optimization criteria are for the software? For instance, is the software optimizing on right turn minimization first and then some other hierarchy of total daily distance traveled (lower being better obviously), total time traveled (lower being better obviously). I wonder if in optimizing for right turns perhaps there have been suboptimal outcomes in other domains for the network. This scenario would seem perfect for a mini-Watson computer on every UPS truck (unlikely cost-possible at this moment) that is able to continuously pull real-time traffic data from the cloud to make infinite minute adjustments to routes throughout the day for optimization (one could imagine Watson incorporating traffic data, rush hour data, weather data, red/green light timing data into this algorithm).
Taki
Is UPS making any inroads into alternative delivery mechanisms like drones? Why even worry about bidimensional constraints when competitors are already moving on to three-dimensional delivery platforms that can simply bypass turns all together? Granted, ORION, seems to be working well for UPS now – and may prove useful in providing a competitive advantage in the short term – but how long will this be sustainable?
It is impressive that UPS has invested in this technology since 2003. I agree with the author that since drivers will become more dependent on ORION, the company needs to ensure that ORION will be perfect. Going forward, drivers will not memorize maps and make ad-hoc optimized decisions. Thus, the company needs to ensure that the system will leave no room/variability by human intervention, which could require a huge investment by the company.
Great post, it was a very interesting read. ORION sounds like an amazing technology that is driving efficiency across their service offerings. I’d be curious though about how proactively the company uses this technology for staffing decisions. As you mentioned, ORION has eliminated millions of minutes of idle time. It seems reasonable to assume that if the drivers were getting all of the deliveries made under the old model (pre-ORION), then the drivers themselves would have more idle time when utilizing the tech, potentially leading to layoffs. That could lead to a unique predicament where the drivers don’t embrace the technology because they see the writing on the wall that the deliveries that used to take 10 drivers might now only take 9. Also, there would most certainly be issues with unions should they start laying off employees because they made their routes ‘too efficient’.
Thanks for sharing the technology used to deliver packages to us. It seems that drivers still have some skepticism around ORION. From doing a bit of research online, it sounds like drivers don’t always follow ORION once the deployment team left a site (1). By tracking the percent of adherence versus miles and time saved (rather than drivers using past history as a reference), this could help UPS underscore the impact of the program.
Not sure if they already do but UPS should also highlight the impact of ORION on sustainability. “When ORION is fully implemented throughout the U.S. in 2016, UPS expects to see annual reductions of 100 million miles driven and fuel savings of 10 million gallons per year. These add up to 100,000 metric tons of greenhouse gas emissions avoided every year.” (1) These facts, married with the business gains, would be pretty compelling to me as a driver to do my part in using ORION, in addition to use my common sense.
(1) https://www.bsr.org/our-insights/case-study-view/center-for-technology-and-sustainability-orion-technology-ups
Doesn’t the environmental impact not matter because globalization and competitive advantage lead to increasing amounts of products that are shipped where the greenhouse gas emissions far outweigh any advantage gained on the roads and shipping continues to not be included in global warming agreements such as the Kyoto protocols. [1]
[1]https://en.wikipedia.org/wiki/Environmental_impact_of_shipping
This is so cool, really interesting to learn about. While UPS has seen significant savings from this, I wonder how digital technology helps the firm in preparing to deal with new competition. Is the future of delivery in airborne distribution technologies, like those currently being piloted by Amazon, or is there space for UPS to develop driverless cars or is it really necessary for a human to transport the packages from truck to door? I think that the next step should be to build up infrastructure which allows packages to be distributed by driverless cars, since weight restrictions will likely be a bigger competitive advantage over airborne freight.
Very interesting article! It reminded me of another article from a few years ago on the efficiency of roundabouts: http://green.blogs.nytimes.com//2008/12/30/roundabouts-efficient-or-annoying/. It turns out that roundabouts are 30% more fuel efficient (not to mention safer) than 4-way intersections because they do not require drivers to stop and idle. According to the Insurance Institute for Highway Safety, there is on average a 40% decrease in all accidents and a 90% drop in fatal ones when a traffic intersection is replaced by a roundabout. Over the past decade the U.S. has installed over three thousand British-style roundabouts (http://www.bbcamerica.com/anglophenia/2014/02/why-americans-dont-understand-the-roundabout), but there is more room for growth. Could we all lobby alongside UPS for the introduction of more roundabouts in the U.S.?
Great post about UPS!
Super super interesting stuff here. I’m semi-obsessed with the operational systems that are built around the mechanics of the road/driving. There is a tremendous amount of variability and unforeseen circumstance on the road (accidents, traffic, street closures….) and yet so much innovation constantly being made in the space, utilizing GPS & Maps technology. With the Uber case I was keen to learn more about the HOW behind their operation. Sadly thats a $1B secret so I came up blank- same here. It was very curious that UPS has decided to utilize technology to confront deliver risks, costs, and extended times related to left turns, as I imagine that there are plenty of other areas of inefficiency the company could be using driving technology to tackle… order batching, delivering signing, drone/driverless usage into the future. I’d love to see the impact of ORION for UPS and understand what else they can use the underlying technology to address — i think this left-turn bit is only the beginning. It seems like there is untapped potential with ORION to make a very big splash for UPS.
There is so much incorrect information in this article. I’ve been a UPS employee since 1988. I have seen many changes at UPS first-hand.
The elimination of left turns and ORION are two separate things.
In 2003 UPS started to implement a system called EDD. Enhanced DIAD Download. It was the first time all of our stops and packages were loaded in our Delivery Information Acquisition Device. Before this drivers had to look through the packages to know where they were delivering and many packages they had for each stop.
When the routes we’re set up they made it so you had as few left turns as possible. This is not rocket science, we’d been doing this for years without needing to be told by a computer. But the system did work. It made drivers more efficient because you didn’t need to sort as much and rarely had to backtrack because you found a package for a stop you thought you were done with.
But then someone had the bright idea that we should reduce miles. So someone decided that they could make a computer program that would find a way to make the deliveries in the fewest miles possible. Left turns no longer matter.
After $2 billion (conservative estimate) had been spent on it it is an epic failure but too expensive to admit.
UPS will rightfully claim that miles per route are down, but that is because since the explosion of internet shopping there are approximately 20%more routes than there were in 2003. In my center we have doubled the number of routes in that time. So of course the average number of miles driven is lower.
Also when you see two drivers delivering to the same area, that has zero to do with ORION. That is human error. The dispatcher decides what area each route does. ORION only organizes what is on that route.