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UPS Logistics Group Creates Automotive Services Unit

8 March 2000

UPS Logistics Group Creates Automotive Services Unit

    ATLANTA, March 8 In response to increasing demands for
supply chain management services in the automotive industry, the UPS Logistics
Group has created a dedicated automotive services unit.
    The UPS Logistics Group - Automotive Services will offer supply chain
reengineering, transportation network management, service parts logistics and
technology solutions to vehicle manufacturers, suppliers and parts
distributors around the world.
    "The advent of supplier exchanges, build-to-order business models and
consumer-friendly web technology are trends dramatically affecting the
automotive industry and its supply chains," said Jim Thompson, senior vice
president, UPS Logistics Group.  "Our expertise combines technology with
supply chain reengineering and advanced management practices to help reinvent
the industry."
    The UPS Logistics Group, a subsidiary of UPS , has long served
auto industry heavyweights such as DaimlerChrysler, Toyota and Honda.  The
auto industry clearly is working hard to improve its efficiency "and that
interest in supply chain improvement justifies our creation of a unit that
will dedicate itself to that industry," added Thompson.
    UPS Logistics Group also has created another specialized unit -- named UPS
Autogistics Inc. -- that will assume the lead role in reengineering finished
vehicle delivery networks.  UPS Autogistics' first mission will be to improve
the Ford Motor Co. delivery network for Ford, Lincoln and Mercury vehicles.
    This task is part of a strategic alliance between UPS Logistics Group and
Ford Motor Company which was announced on Feb. 2.  Its goal is to reduce by up
to 40 percent the time required to deliver vehicles from Ford plants to
dealers and customers.  The project, to be implemented over the next 12-to-15
months, also includes the development of information systems that eventually
will allow both dealers and consumers to track the journey of individual
vehicles to delivery.  The scope of the new reengineered network includes
vehicle deliveries in the U.S., Canada and Mexico.
    UPS Autogistics will take the lead role in managing that transformation of
the finished vehicle delivery network.  The UPS Logistics Group already
manages auto parts networks for such customers as DaimlerChrysler, Toyota,
Honda, Volkswagen and Honeywell AlliedSignal.
    "Automotive manufacturers are taking a fresh look at their distribution
networks and are discovering that better supply chain management practices can
streamline their operations, add reliability, lower inventory costs, cut
delivery cycles, improve cash flow and enhance customer service," said
Thompson.  "We see this as a tremendous opportunity, not only in the U.S. but
in Europe, Asia and Latin America as well."
    According to Thompson, the collaboration of suppliers through automotive
exchanges also will create opportunities for third-party logistics providers,
like the UPS Logistics Group, because such consortiums require highly
coordinated and precise delivery networks.
    "Traditionally, automotive suppliers acted independently, with various
technology platforms, reliability standards and delivery carriers," he added.
"Automotive exchanges will force these suppliers to act cooperatively, but
integrating their supply chains and IT systems will take expertise like ours."
    Potentially, these suppliers could eventually share warehouses, truckloads
and IT systems for even greater efficiencies, Thompson projected.  "Vendor-
managed inventory and shared supply chains are already a reality for many
high-tech and consumer retail manufacturers.  The automotive industry can have
the same benefits."

    About the UPS Logistics Group
    The UPS Logistics Group, a subsidiary of United Parcel Service, Inc.,
provides global supply chain services.  Its key offerings are: supply chain
management, transportation services, supply chain technologies, and service
parts logistics.  For more information, contact http://www.upslogistics.com
    This press release contains statements that may constitute "forward-
looking statements" within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended.  Those statements include statements regarding the intent, belief or
current expectations of UPS and its management.  Such forward-looking
statements involve risks and uncertainties with respect to future events.