UPS upgrades service level for US-Mexico industrial shippers

$50M investment aimed at creating cross-border LTL service within parcel network

UPS is making it more attractive for industrial shippers to use its parcel network for shipping heavier items across the U.S.-Mexico border. The service enhancements include guaranteed delivery windows for air cargo shipments. (Photo: Jim Allen/FreightWaves)

United Parcel Service this summer will begin offering time-definite, heavy freight air service between the United States and Mexico on its own aircraft for the first time as part of an initiative to provide more tailored supply chain services to automotive and other industrial customers with operations in both countries.

The integrated logistics and parcel giant said Friday it has also invested nearly $50 million to build a freight-friendly cross-border product within the UPS Ground parcel transportation system and teams with more than 300 industry-specific experts who can help customers navigate the best logistics options amid increased trade complexity associated with higher tariffs, changing regulations, and rising fuel prices. 

UPS (NYSE: UPS) in August will begin offering one-day, two-day and three-day service options to and from Mexico that are designed to help manufacturers move high-value, time-sensitive parts with greater speed and predictability than previous offerings. UPS will also use trucks for some traffic.

UPS services between the United States and Mexico have traditionally focused on small package shipments, with remaining capacity allocated for freight. The difference now is that UPS is offering a service upgrade in which shippers can receive day-definite, guaranteed service, spokesman Jim Mayer explained in an email. 

UPS operates scheduled flights to-and-from Mexico City, Guadalajara and Monterrey. Depending on the service option selected and time-in-transit, volume also may move on ground from Mexico to U.S. gateways, such as El Paso and Dallas, Texas, where it will be loaded onto a UPS flight to destinations anywhere in the U.S. or Canada. In some cases, a movement may go by ground only, he said.

The new UPS Ground with freight pricing functions as a less-than-truckload solution for multi-package shipments over 150 pounds, using the more simple parcel network. It is designed for multi-package shipments that do not require a pallet. UPS has offered freight-pricing in UPS Ground within the domestic U.S. market, but is now extending that to cross-border movements. 

“Our automotive and industrial customers want an easy button for logistics,” said Matt Guffey, UPS chief commercial and strategy officer, in a news release. 

WeatherTech uses UPS to ship automotive accessories and CEO David MacNeil said the company is pleased with the shipping reliability, according to the news release.

The new investments in North American cross-border shipping dovetail with UPS’s strategy to deemphasize low-margin parcel business and focus on high-value goods and complex supply chains, such as automotive, that require premium services.

Heavy freight trend

UPS is the latest express carrier to place greater emphasis on capturing more general cargo as parcel volumes stagnate. FedEx two years ago launched Tricolor, a strategy to pursue premium heavy freight from freight forwarders and create more efficiency by segregating overnight parcel and deferred freight using separate aircraft on different schedules. But FedEx has opted to mix in fewer large freight shipments with its expedited priority parcels, instead holding certain aircraft to operate a deferred network. DHL Group is also dedicating more internal aircraft for use by its DHL Forwarding division and offering express heavy freight service through DHL Express.

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

Write to Eric Kulisch at ekulisch@freightwaves.com.

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Eric Kulisch

Eric is the Parcel and Air Cargo Editor at FreightWaves. An award-winning business journalist with extensive experience covering the logistics sector, Eric spent nearly two years as the Washington, D.C., correspondent for Automotive News, where he focused on regulatory and policy issues surrounding autonomous vehicles, mobility, fuel economy and safety. He has won two regional Gold Medals and a Silver Medal from the American Society of Business Publication Editors for government and trade coverage, and news analysis. He was voted best for feature writing and commentary in the Trade/Newsletter category by the D.C. Chapter of the Society of Professional Journalists. He was runner up for News Journalist and Supply Chain Journalist of the Year in the Seahorse Freight Association's 2024 journalism award competition. In December 2022, Eric was voted runner up for Air Cargo Journalist. He won the group's Environmental Journalist of the Year award in 2014 and was the 2013 Supply Chain Journalist of the Year. As associate editor at American Shipper Magazine for more than a decade, he wrote about trade, freight transportation and supply chains. He has appeared on Marketplace, ABC News and National Public Radio to talk about logistics issues in the news. Eric is based in Vancouver, Washington. He can be reached for comments and tips at ekulisch@freightwaves.com