United Parcel Service of America Inc. (UPS) said today it would accelerate the full U.S. rollout of its driver navigation system, known by the acronym of ORION, to the end of 2016 from the first quarter of 2017.
Laurie Mallis, a UPS spokeswoman, said the results have been so successful up to now that the company decided to move up the timetable for full domestic implementation. Mallis said these plans were put in place before the company surprised virtually everyone last month by announcing that its fourth-quarter results would come in below expectations.
By the end of 2015, ORION, which stands for "On-Road Integrated Optimization Navigation," would be implemented on about 70 percent of UPS's 55,000 domestic routes, the company said.
ORION's routing system uses data from customers, drivers and vehicles to reduce miles driven on delivery routes. It is built to calculate the most efficient driving path, taking into consideration all scheduled package delivery and pick-up stops required on the route for the specific day. For each 120-stop route a UPS driver operates in a day, ORION analyzes more than 200,000 routing options. UPS began implementing ORION in 2012 following a decade of development. UPS has dubbed ORION the world's largest operations research project. It has said that the number of route combinations available to a UPS driver in a day is far greater than the number of nanoseconds the earth has existed.
UPS expects ORION to yield between $300 million and $400 million in annual savings when it is fully implemented in the U.S. It is expected to reduce miles driven by 100 million miles annually at full implementation. It will cut greenhouse gas emissions by about 100,000 metric tons per year, equal to removing 21,000 passenger cars from the road, the company said.
Mitch Nichols, UPS senior vice president of transportation and engineering, said in a statement today that ORION has already reduced the number of miles driven per route by six to eight miles. UPS has said that reducing a driver's road time by just one mile per day saves it as much as $50 million a year.
ORION will be deployed on routes outside the U.S. starting after 2017, UPS said.