AI Use Case: United Parcel Service

At logistics giant United Parcel Service (UPS), AI is pivotal in optimizing operations by reducing risk.

For instance, UPS recently addressed a top consumer concern through AI technologies: package theft. According to the Chamber of Commerce, 26 percent of consumers say they’ve had a package stolen, with most of those deliveries taken from residential areas.

To combat this, UPS created DeliveryDefense, AI software that uses historic data—such as location, loss frequency, delivery attempts, and return volume—and machine learning algorithms to assign each location a “delivery confidence score,” rated on a scale of one to 1,000.

“If we have a score of 1,000 to an address that means that we’re highly confident that that package is going to get delivered,” says Mark Robinson, president of UPS Capital, to CNBC. “At the other end of the scale, like 100 . . . would be one of those addresses where it would be most likely to happen, some sort of loss at the delivery point.”

This predictive capability allows UPS to proactively mitigate risks by rerouting at-risk packages to secure locations, such as The UPS Store or UPS Access Points, reducing the likelihood of theft.

Even if your company doesn’t deliver goods, it’s worth considering how AI can help you mitigate other kinds of operational risks. Proactively tackling these problems can enhance customer satisfaction and trust, which are critical to competing in today’s market.