Ford and UPS Form Logistics Partnership to Cut Car and Truck Delivery Times

Ford Motor Co. and United Parcel Service announced a logistics partnership expected to significantly reduce car and truck delivery times from an average of 15 days to 9 days. The partnership will utilize information technology to optimize routes and inventory management, allowing auto buyers to track their vehicles online. This initiative aims to reduce waste and improve precision in the current distribution system.

Key Takeaways:

• The partnership between Ford and UPS will cut car and truck delivery times by 40% from the current average of 15 days.
• The new distribution network will use information technology to determine the most efficient routes for getting vehicles from the factory floor to the dealer lot.
• The partnership will allow auto buyers to track their purchased vehicles via the Internet in the same way UPS customers follow their packages online.
• Ford hopes to cut down on the transfers of cars and trucks between rail cars at the mixing centers, making it easier for the railroad to move.
• The role of the mixing centers will change, and Ford plants will build batches of vehicles by geographic destination and load those vehicles into blocks of rail cars headed for the same place.
• Norfolk Southern will continue to handle most of Ford's shipments through its four Ford vehicle mixing centers, with those centers located in Fostoria, Ohio, Shelbyville, Ky., near Chicago, and Kansas City, Mo.
• Automobiles and car part shipments accounted for $740 million of Norfolk Southern's $5.2 billion in revenues in 1999.
• The partnership's success or failure may hinge upon the companies' ability to make sure their computers talk to and understand one another.
• A common challenge of integrating different corporate computer networks is maintaining high-quality data throughout the resulting new system.

Statistics:

• Average car and truck delivery time is expected to be reduced by 40% to 9 days.
• Norfolk Southern operates four Ford vehicle mixing centers in Fostoria, Ohio, Shelbyville, Ky., near Chicago, and Kansas City, Mo.
• Automobiles and car part shipments accounted for $740 million of Norfolk Southern's $5.2 billion in revenues in 1999.
• Ford signed the Norfolk-based railroad, Norfolk Southern Corp., to a 12-year contract in 1996 worth an estimated $3 billion to develop and operate the centers as distribution hubs for its North American supply network.

Sources:

• "Ford, UPS said forming logistics partnership" by unknown author. I am unable to verify the publication source but was mentioned in the provided text.

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