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Global Management Studies
GMS 450
Armand Gervais

UPS Pre 1800s (Pre-industrial era) • No forms of motorized transportation existed Animal labour for land transport and wind for maritime transport International trade did exist through Silk Road (Very Limited) 1800-70The industrial revolution & transportation) Development of canal system The Suez Canal In 1830:2000 miles of canals in Britain and by 1850: 4250 miles Steam engine Railway in 1814 The first commercial rail line linked Manchester to Liverpool in 1830 (40 miles distance) 1870-1920ergence of modern transportation systems) Shift from Coal to Oil Increase in Ship sizes –> 70% drop in Freight rates Urban Public transport systems (Streetcars) 1920-70Fordist Era) • The Assembly line Internal combustion engine (Four stroke engine by Daimler) Petrol - convenient fuel 1970 The Post–Fordist Era) • Globalization of trade Air Transportation Efficient distribution systems 1907 - Founded by James Casey under the name American Messenger Co. 1913 - The first delivery by a Model T Ford vehicle 1930’s - UPS expanded to Oakland and California - The name United Parcel Service is adopted 1940’s to 1960’s- UPS expanded due to the shortage of fuel and rubber - Reducing the usage of personal cars - The consolidation of the service economy expanded the demand for parcel service 1975 - UPS was granted the right to be a common carrier for all 48 states - UPS expanded from coast to coast initially in Canada and Europe 1987- UPS was servicing almost every address in North America 1988 - UPS Airlines was launched 1990’s- Growth in logistics industry mainly due to the number of online transactions 1999 - UPS became a public traded company – NYSE:UPS $80 2001- UPS was offering direct air freight services to China (1000 nd flights/day) 2008 – Present- Current CEO Scott Davis - 2 largest freight airline in the world- 2400 distribution centers- 93000 vehicles and airplanes - Generates an income of around $50 billion/year - Employs 425,000 people (358,000 in the United States) - covers a service area over 200 nations - Handles 4 billion parcels/year (15.8 million per day) - Generates more than 6% of the American GDP and 2% of the global GDP each day • Hub and spoke system processes Packages arrive at hubs and are sorted by an automated system Closest hub to destination is determined Hubs less than 600km away are shipped by ground More than 600km is shipped by air Packages can be delivered anywhere in the world in 24 hours Weather tracking prevents delays Advantages • Air Fleet Size: 519 and growing Destinations Approximately 766 Air and Ground vehicles More businesses going online Sophisticated Distribution network Disadvantages: Overall Cost to the customer Dependent on strong economic growth Growing cost of fuel Competitive market THE GREAT LAKES/ ST LAWRENCE SEAWAY • St. Lawrence Seaway connects the Atlantic Ocean to the Great Lakes The first ship to sail the Upper Great Lakes dates back to 1679 1890 – 1950: proposals to create deep waterway passages along the St. Lawrence Seaway 1952: Canada decided to conduct the project on its own 1954: congress approves that the US would have a role in the seaway The seaway was completed and opened in 1959 Lake Ontario is the lowest of the 5 Great Lakes Welland Canal created from St. Catharines to Port Colborne stretches 44km consisting of 8 locks Welland Canal was created because there is no safe passageway through the Niagara Escarpment • Welland Canal was created and revised 4 times The first was built in 1829 that consisted of 40 wooden locks Work was done in 1854 to deepen the canal and reduced the locks to 27 1887 the third Welland Canal was completed and reduced locks to 26 Fourth and final canal 1913 to 1932 consisting of only 8 Locks completed in 1968 as first lock in western hemisphere • Why created - Way to access Great Lakes from St. Lawrence River Allow Montreal to be a major port for Canada Public interest in shipping via waterway Welland canal created to bypass Niagara Falls Needed hydroelectricity Financing of Transportation Infrastructure  APM TERMINALS 70 port and terminal facilities and 160 Inland Services Operations Port management and terminal operations to over 60 liner shipping and port customers 50% of the company’s port and terminal portfolio is fully owned Hold a 30% equity stake in the Port of Salalah, Oman  Advantages to private investors Increased efficiency and capacity with continuous improvement and innovation in transportation infrastructure Reduced terminal costs, high productivity, and increased access to cargoes Access to larger amounts of capital for investment Expert knowledge in project management Removes financial burden from Governments Removes cost and operating inefficiencies Removes the process of equalization Removes the need for cross-subsidies  Transport Canada invests most into. Financial Institutions International Organizations Retirement Funds Sovereign Wealth Funds Investment Banks  Benefits / negatives of private lenders No percent of ownership stake is given Helps raise capital for cost intensive projects Not limited to domestic sources of capital Higher cost of capital Lack of transparency can create political issues Foreign sources of capital may meet public backlash Forms of PPP(public/private partnerships Design-Bid-Build Winning contractor undertakes the construction phase Once completed, management and maintenance will be performed by the public sector Private Contract Fee Services Public transfers the responsibility of specific services to the private sector Design-Build Similar to the design-bid-build partnership, with the exception that they are combined in a single contract Public sector owns the infrastructure as well as bearing the responsibility Build-Operate-Transfer Known as a turnkey PPP, since, the public sector eventually takes over the infrastructure Design-Build-Finance Operate Responsibilities fall in the hands of the private sector, but ownership remains public Build-Own-Operate Responsibilities fall completely in the hands of the private sector Public sector involvement is limited Ad
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