In August, UPS Shuts Baltimore Facility
540 Jobs Will Be Lost

United Parcel Service (UPS) is closing its Baltimore customer center on Vero Road. This will lead to 540 workers losing their jobs. The closure is part of UPS’s plan to update its operations and save money.

UPS Shuts Baltimore Facility: Details of the Closure

The Baltimore facility will close on August 23, 2024. UPS told the Maryland Department of Labor about the closure on June 20. Earlier this year, in March, the same facility laid off 118 employees.

A UPS representative explained the situation to FreightWaves: “As part of our Network of the Future initiative, we’re modernizing our Baltimore facility at 3901 Vero Road and will temporarily close the facility on August 23, 2024. Our employees are extremely important to us, and we are working to place as many employees as possible in other positions at our onsite temporary hub or in nearby facilities. We remain committed to working with them throughout this transition and providing support. This temporary closure won’t impact customer service, and we have plans in place to continue servicing the Baltimore community. We expect the enhanced Baltimore facility to reopen in late 2025.”

UPS’s Modernization Plan

The Baltimore closure is part of a larger plan by UPS called the Network of the Future. This plan involves closing up to 200 facilities over five years. UPS expects to save $3 billion each year by 2028 with this plan.

To save money, UPS is combining smaller facilities into larger, more efficient ones. For example, in Worcester, Massachusetts, UPS is building a new facility to replace four smaller ones. In Albany, New York, UPS is upgrading a facility, which will allow them to close another one. In Harrisburg, Pennsylvania, UPS has already closed 15 centers, reducing costs and staff.

Financial Goals and Market Challenges

UPS has set big financial goals for 2026. These include earning between $108 billion and $114 billion in revenue and having a profit margin above 13%. They also aim to have $17.5 billion in free cash flow. UPS hopes to reach these goals by cutting costs, using more automation, and focusing on high-value market segments like healthcare and small businesses.

However, some analysts are doubtful. They think UPS’s revenue targets may be too high, especially with competition from companies like Amazon.

Growth in Small Package Deliveries

UPS is hopeful about the future of small package deliveries. They expect the number of daily packages in the U.S. to grow from 84 million to 88 million in 2024, and to 98 million by 2026. Internationally, they expect a 3.5% annual growth rate through 2026.

New Technologies and Global Expansion

Technology is a big part of UPS’s plan. They are investing in smart package technologies like autonomous vehicles and automated sorting systems. These technologies should increase their capacity by 30% to 35%.

UPS is also expanding globally. They are increasing capacity at their air terminal in Clark Airport, Philippines, and building a new air cargo facility in Hong Kong. These projects will help UPS handle more packages and improve delivery times.

Looking Ahead

As UPS shuts Baltimore facility, it’s a major step in their plan to modernize and save money. While this will affect 540 workers, UPS is committed to helping them through the transition. With ambitious financial goals and investments in new technology, UPS is preparing to meet future challenges and opportunities in the logistics industry.