UPS Supply Chain Solutions

Alpharetta, GA NYSE: UPS (United Parcel Service)

Bob Stoffel, President

800-742-5727

www.ups-scs.com

3PL Turnover:

$8b Parent: $47.5b

Service Area:

Tier 1 - Global Supply Chain Manager (Service to 99% of World GDP)

3PL Assets:

37,000 employees

936 facilities, 35m sq. ft.

900 tractors, 2,450 trailers

SCS fleet now integrated with UPS Freight for truckload, LTL and Dedicated Contract Carriage (nearly 8,000 tractors and 125,500 trailers).

Information Systems:

Excellent

TMS – i2 Technologies, Roadnet

WMS – Operates all major systems

Services:

Air and ocean freight forwarding, customs brokerage, transportation management, warehousing and distribution, supply chain consulting, dedicated contract carriage, trade finance and insurance, equipment leasing, mail services

Industry Focus:

Automotive, computers and electronics, consumer goods, healthcare, retail, telecommunications

Key Customers:

Abbott Labs, DaimlerChrysler, Hitachi, Nestlé, Honeywell, Royal Philips, Seagate, Sony Ericsson, Toshiba

Armstrong & Associates’ Evaluation:

UPS and DHL/Exel are the best known U.S. brand names. Revenues for contract warehousing were $1.5 billion in 2006. Freight forwarding net revenues were $4.2 billion. UPS SCS had a break-even year in 2006. UPS SCS’ target is 8%, but it will take 2 to 3 more years. Management expects an EBITDA of 2–3% in 2007. In the meantime, UPS SCS contributes $1 billion+ per year in package business to its big brother. UPS handles 660,000 TEUs per year as a freight forwarder. UPS Capital Freight and Consulting continue to be important contributors.