UPS, the world’s largest package delivery company, said that with “a combined network and enhanced IT platforms [of UPS and TNT], customers will have access to deeper product capabilities and broader reach through the expanded geographies served, giving them more choice and flexibility to support the growth and globalisation of their businesses”.
The combined company is targeting up to £450 million in cost savings over four years, as a result of merged technology and standardised processes, procurement efficiencies as well as an “optimised” operational infrastructure.
The integration will take place in phases, and “country by country”, UPS and TNT said. They vowed to start with customer alignment, then operational integration, and insisted there would be a focus on “retaining” as many staff as possible – though cuts are expected.
It is not yet known which systems will be merged, but areas of focus for the companies in terms of technology include their supply chains and logistics management.
Both firms have invested heavily in their supply chain over recent years, and both use SAP enterprise resource planning software extensively. UPS is a large user of IBM DB2 databases to support its supply chain data, and also continues to extend high tech tracking tools to customers.
“The complementary strengths of both organisations will create a customer-focused global platform that will be a leader in transportation technology and customer service,” the companies said in a joint statement.
Scott Davis, UPS chief executive, added: “With this combination, both UPS and TNT Express will significantly enhance their ability to serve our combined customers’ complex global logistics needs. The additional capabilities and broadened global footprint will support the growth and globalisation of our customers’ businesses.”