every day two titans face off in a mad

00:04
dash to move more than 25 million
00:07
packages every second counts as a
00:10
complex system of jaw-dropping
00:11
automation but there was like a really
00:14
long that that thing needs an army of
00:16
trucks on the ground and a fleet of
00:18
planes in the sky it's the delivery
00:20
giant versus the leader in overnight in
00:24
a race against time and each other
00:27
Coke and Pepsi is a great way to look at
00:29
it with billions at stake which company
00:32
can do it faster cheaper smarter and
00:34
keep up with an e-commerce revolution
00:37
I'm prayin shacking it tonight we take
00:39
you inside
00:48
UPS and FedEx deliver nearly six and a
00:51
half billion packages a year practically
00:53
a package for every person on the planet
01:01
1377 aircraft 265 rams our FedEx made
01:05
Memphis their home base dubbing the 832
01:08
acre complex the Super Hub FedEx has
01:10
made Memphis International Airport the
01:12
busiest cargo Airport in America UPS is
01:15
also strategically located near the
01:17
heart of America Brown calls its mega
01:20
complex Worldport UPS chose Louisville
01:23
Kentucky as a hub because of location
01:25
here you're a two-hour plane flight from
01:27
75% of the United States but what's so
01:32
special about this spot CNBC went behind
01:34
the scenes with both that's what's known
01:36
as a unit load device to show you the
01:38
amazing journey from this to this UPS
01:44
might be best known for its brown
01:46
delivery trucks but it's also the
01:48
world's ninth largest airline
01:51
I'm inside a Boeing 757 that just came
01:54
in from Guadalajara Mexico we're
01:56
bringing all the cans out to go into the
01:59
world port for sorting
02:03
sorting its what both hubs were built
02:06
for routing packages from one plane to
02:08
another the sort as workers at both
02:11
companies call it is where you see the
02:13
shipping magic at work and world for ups
02:17
can sort up to four hundred and sixteen
02:18
thousand packages an hour and a night a
02:21
million during the peak season like
02:23
Christmas one point six million packages
02:26
as for FedEx it's not just a company
02:29
it's a verb you mind FedExing those bad
02:32
boys just a few minutes before 11 p.m.
02:35
on a Monday at the hub in Memphis
02:37
Tennessee for FedEx and some of the
02:39
10,000 workers are streaming in for the
02:41
night sort which can handle up to two
02:42
million packages in a single night and
02:44
as you can see they're in winter here
02:46
because Memphis is expecting snow it's
02:49
right about midnight and all the planes
02:51
are starting to scream then they have to
02:52
get them all within a very tight window
02:54
to make sure the sort goes off on time
02:56
this particular 777 came in from Charles
02:59
de Gaulle Airport in Paris
03:00
traveling to Paris Mexico and beyond
03:03
it's staggering to think that combined
03:05
the companies have about 90 billion in
03:07
revenue
03:11
especially when you consider both
03:13
companies humble beginnings in 1907 Jim
03:17
Casey founded the American messenger
03:19
company in Seattle by the time of the
03:22
United Parcel Service in 1919 men and
03:25
brown were delivering around 22 packages
03:27
per day 1959 a volume surge to seven
03:31
hundred and twenty-three thousand with
03:33
each generation exponential growth by
03:36
1982 UPS introduced next-day air service
03:39
and volume hits six point four million
03:41
the volume just keeps growing in 1973
03:45
former Marine and Vietnam vet Fred Smith
03:47
bottoms Federal Express on its first
03:50
night in business delivering a hundred
03:52
and eighty-six packages by year two
03:55
daily volume passes ten thousand twenty
03:58
years later shorter delivery times and a
04:00
shorter name the newly coined FedEx
04:02
delivers nearly two million packages per
04:04
day in 1998 FedEx launches ground and
04:08
home delivery and by 2010 FedEx is up to
04:11
eight million packages today when you
04:13
combine the two delivery giants it's
04:15
almost 25 million packages a day back on
04:19
the sword it's easy to see where today's
04:21
growth is Internet Retailer
04:24
hewlett-packard Dell Walmart Amazon this
04:29
is one of our many areas UPS is Michael
04:33
Paul runs Worldport post to a nightly
04:35
cascade from Amazon how big are they to
04:38
your business bigger prize a lot of our
04:40
businesses are one of our strategic
04:42
shippers how big big will probably do
04:45
about twenty to forty percent of their
04:48
volume in the air and on the ground
04:53
reputations are on the line each and
04:55
every night we're taking a piece and
04:58
trying to find a way to get us home so
05:02
this is where the great sort happens for
05:05
four hours every night each next day
05:07
package travels to 155 plus miles of
05:10
conveyor belt getting bagged by zip code
05:12
apartment building even large individual
05:15
customers tonight
05:18
Kabira murray covers the letter c being
05:20
a sea person you do a ton of chicago
05:23
yeah what's the worst thing that can
05:25
happen you sent it to the wrong place
05:31
when we visited FedEx it was cyber
05:33
monday and the intensity became more
05:35
than a virtual headache a snowstorm
05:38
meant late arrivals and even more
05:40
pressure inside the sort
05:41
none of the planes here can take off
05:43
until the sort is complete and they're
05:45
loaded to go let's say about twice is
05:47
Freight let's say about twice as dressed
05:49
it's pretty good pretty intense tux
05:53
price and flips between the more than
05:55
250 cameras used to monitor and regulate
05:58
the store so when I extend that diverter
05:59
now I'm taking Freight from two belts
06:01
and put it on the one he should be done
06:03
by now over 200 planes are waiting on
06:06
the tarmac it's 3:00 in the morning
06:08
what's going on in the commands okay
06:10
we're wrapping up our sword at this time
06:12
40 minutes late
06:14
wasn't a total smooth night though right
06:15
it was not at what point in terms of
06:18
lateness would it have made you nervous
06:19
about getting things on time the next
06:21
day well this was pretty close to that
06:23
boundary with the first planes departing
06:25
so late distribution centers around the
06:27
country have to move even faster to make
06:29
their morning deadlines but then again
06:31
employees are trained to expect every
06:34
possible contingency well not everyone
06:37
what's the strangest thing that's
06:39
happened on these monitors based on what
06:41
you've done I think it might have to be
06:43
the sound of the box of fresh Maine
06:45
lobsters broke open somewhere on the
06:48
belt system and fifty eight pound
06:51
lobsters came straight at this bill and
06:53
people just scattered their smart data
06:55
grabbed and put a new jacket yeah
06:57
whether it's lobsters on the loose or
06:59
snow on the ground but our customers
07:02
don't care that it's leading and snowing
07:03
in Memphis they want their package and
07:05
they want to deliver it on time
07:06
coming up on inside the package wars
07:09
engineering speed with extreme otta me
07:17
go ahead push it up now tell you want to
07:20
stop
07:23
up up and away well in my dreams I'm
07:29
actually inside a thirteen million
07:30
dollar flight simulator belonging to UPS
07:33
they have eight of these eleven ton
07:35
machines to keep their pilots certifier
07:37
trainer Cato fluoro himself the UPS
07:39
pilot shows me the ropes you'll have to
07:42
be too ginger with it it's not your
07:43
dad's Cadillac besides preparing their
07:47
2600 pilots to fly under almost any
07:49
conditions it simulates taxiways and UPS
07:52
gates at airports worldwide I just don't
07:55
want to die ok ok so I see the runway
07:58
straight ahead ok let's just say UPS did
08:02
not offer me a job
08:04
I train ahead oh I do not like that
08:10
FedEx and UPS make massive investments
08:13
in technology using NASA light control
08:16
centers and custom-built computer
08:18
programs to manage traffic in the skies
08:20
both have one goal solve whether
08:22
mechanical problems to get packages to
08:24
their destination on time at UPS spare
08:28
pilots and planes are at the ready to
08:30
rescue deliveries that if late would
08:32
cost between 5 and 30 dollars a package
08:34
it adds up fast considering every plane
08:36
carries thousands of packages UPS uses a
08:40
technology called next gem it lands
08:43
planes closer together
08:44
shaving minutes from flight times and
08:46
that means millions of dollars and
08:49
savings is why UPS uses technology to as
08:52
they put it D skilled jobs like loading
08:55
delivery trucks before packages even
08:57
arrive at the distribution center UPS is
09:00
preload assist system determines exactly
09:03
where each one belongs
09:05
and instantly blows loading info right
09:08
onto the packages or on bigger ones the
09:12
device simultaneously scans the barcode
09:15
and prints a loading code that tells
09:17
workers exactly what truck to put it on
09:19
and precisely where inside UPS is chief
09:23
information officer Dave bonds shows us
09:25
the company's global data center in
09:27
Mahwah New Jersey computers here use
09:29
advanced logarithms to issue drivers
09:32
their daily instructions ten years ago
09:34
could you do that same thing now ten
09:36
years ago we used to do this manually we
09:39
would train a number of our workers to
09:42
memorize the routes of our drivers and
09:44
on those routes drivers are discouraged
09:46
from making left turns
09:47
because models show they add more wait
09:50
time in traffic and increase the risk of
09:52
accidents optimizing right turns over
09:54
left we save money and have a safer
09:57
workforce for both companies the bar
09:59
code is key at the FedEx Ground hub in
10:02
Memphis belts move boxes at 500 feet per
10:05
minute and there's no need to slow down
10:07
for scanning the scan Tom oh you see
10:09
right here can Spangler CIO of FedEx
10:11
Ground explains we're reading all six
10:14
sides of the package we're reading the
10:16
barcodes on the bottom as well we also
10:18
do high-speed dimensioning so we capture
10:21
all the dimensions of the
10:23
the packages come off the truck and
10:25
they're all clumped together by the time
10:27
to get through this line there's
10:29
single-file they're spaced out and
10:30
they're scanned the average FedEx Ground
10:33
package is scanned 13 times once we
10:36
unload it we really don't want to touch
10:38
it again until the load point
10:40
so basically we're using all automation
10:43
they've even integrated scanners into
10:46
gloves can I shake your Bionic hands
10:48
yeah she could these are only the second
10:50
set of hands that have touched these
10:51
packages at the FedEx Ground facility
10:53
and this process of loading up a truck
10:55
happens more than a hundred thousand
10:57
times for the entire FedEx Network while
11:00
both companies have ways you can track a
11:02
package in transit FedEx is chief
11:04
information officer Robert Carter shows
11:06
us how they're not just tracking the
11:08
package they're tracking the contents as
11:10
well an innovation targeted at the
11:13
biomedical industry he actually inserted
11:15
into the package it can tell us where it
11:17
is it can tell us what temperature it is
11:19
it can tell us how fast it's moving it
11:21
can tell us whether or not light has
11:24
entered into the package which means
11:26
it's been open
11:27
despite all the technology and
11:30
innovation the delivery is still the
11:32
most important step to recent viral
11:35
videos illustrate the point for FedEx it
11:37
was a driver carelessly chucking her
11:39
computer monitor over a fence
11:41
FedEx responded quickly this goes
11:44
directly against all FedEx values but
11:47
replacing the monitor for free and
11:49
disciplining the employee can't offset
11:51
the bad press but a UPS it wasn't
11:53
obscene gesture at a security camera UPS
11:56
as the seasonal employee has since been
11:57
fired but from the public backlash it's
11:59
clear that delivering packages and
12:01
profits still requires a human touch
12:05
coming up pushing packages was just the
12:08
beginning
12:09
see why UPS wants to grab hold of your
12:11
smartphone
12:15
when it comes to last-minute delivery
12:17
you might say UPS has skin in the game
12:19
literally human skin what we have back
12:23
here is some very time-sensitive product
12:26
from Louisville Kentucky Mark V elite
12:29
the team of ups employees who need to
12:31
keep a freezer at negative 103 degrees
12:33
Fahrenheit to preserve a product made by
12:35
advanced bio healing a company based in
12:37
La Jolla California what is it a skin
12:40
replacement therapy used in foot
12:41
surgeries made from circumcised foreskin
12:45
we have minutes to remove it from our
12:47
freezer the seconds to place it in the
12:50
shipper it's shipped in a container ups
12:53
design layered with dry ice and set next
12:56
day to operating rooms across the
12:58
country and if we do not maintain the
13:00
integrity of the product from the
13:01
freezer to the shipper we're
13:04
compromising that patient's outcome and
13:06
I I don't have tell you but I don't want
13:08
that to happen ever it's just one
13:12
example of UPS expanding into healthcare
13:15
housed in warehouses the size of three
13:18
football fields this is what UPS calls
13:20
in adjacent business meaning adjacent to
13:23
their gigantic super hub they call
13:25
Worldport in Louisville Kentucky alone
13:27
healthcare-related adjacent businesses
13:29
have a million square feet of fda
13:32
certified warehouse space everything
13:34
from pain medication to parchment x-ray
13:36
machines literally blocks from a runway
13:38
so if there's an emergency they can get
13:40
product out the door immediately both
13:42
one company you're dealing with right
13:44
from that source of manufacture all the
13:46
way through to that retail store or
13:48
doctor's office in the US
13:53
the commercials are ubiquitous and you
13:56
yes actually has a president of
13:58
logistics his name is Brad Mitchell and
14:00
his job is to take advantage of the ever
14:02
globalizing world he saves companies
14:04
money while making money for UPS I get
14:07
the snow suit
14:08
one chilly freezer chamber after chamber
14:12
after chamber at a time it's four below
14:15
Fahrenheit ice packs everywhere you're a
14:17
company that makes something has to be
14:19
stored at a particular temperature ups
14:21
can do that they bundle up a bunch of
14:23
different companies that have the same
14:24
needs can ship all over the world saving
14:26
each company money within one building
14:30
we go from health care to high-tech and
14:32
one major company that outsourced to UPS
14:35
is sprint phones come from Kyocera
14:38
motorola in asia the received customized
14:42
package and then shipped to businesses
14:45
and individuals this facility can manage
14:48
five to six thousand units per hour
14:50
always UPS technology all with UPS
14:53
personnel UPS is sorting shipping and
14:57
storage cut Sprint's warehousing cost by
14:59
30% the shipping business is huge but it
15:03
isn't showing huge growth not the case
15:05
with opportunities to do more for more
15:07
companies the investment community
15:09
saying what's your next opportunity for
15:11
growth and we really saw that moving up
15:13
a supply chain
15:15
the analyst community agrees and also
15:18
sees a difference here between FedEx and
15:20
UPS gets delivered order covers both
15:23
companies for Lazard Capital Management
15:25
it's a business in its youth globally
15:27
UPS does seem to have a bit of a lead
15:29
there you see how their advertising
15:34
it is going to be the dominant way that
15:36
the company markets itself as it goes
15:38
forward it's more than shipping skin
15:41
it's reducing customs delays processing
15:44
returns customer invoices as well as
15:47
what you see here the do-it-all approach
15:49
explain to me how big this business is
15:51
within the framework of ups that's
15:53
getting close to 20 percent of the total
15:55
revenue base in the company it's one of
15:58
the priciest cars in the planet and
16:00
Braun actually has a hand in bentleys
16:03
business too we will handle anything
16:04
from the smallest branded nuttin boat up
16:07
to an engine Bentley is based in Crewe
16:10
England since 1994 UPS has been their
16:13
parts people for all of North America
16:15
call North manages their evolving
16:17
relationship we had a little issue with
16:19
the wind screens these are hard to ship
16:21
because the damage prone we were able to
16:24
design a special box that actually helps
16:26
reduce these damages to near zero then
16:29
there are what you might call
16:31
partnerships of convenience ups says at
16:33
least 140 companies have relocated their
16:36
distribution facilities to Louisville
16:37
Kentucky benefiting from what they call
16:39
end of runway services Zappos can take
16:42
orders until 11:30 p.m. and still get
16:45
the shoes to customers by 8:00 a.m. the
16:47
next one meanwhile in Memphis FedEx is
16:50
making huge strides in doing the very
16:52
same thing ProFlowers is as close as
16:55
possible to planes at FedEx superhub to
16:57
service all those emergency flower
17:00
orders in perishables speed is
17:03
everything Clark Howard help create the
17:05
strategy
17:06
so if an order comes in in another part
17:08
of the country and it's too late to
17:09
fulfill it that's what this is for yeah
17:12
they're really the ProFlowers to it here
17:14
in Memphis it's just right next to the
17:15
FedEx hub is really the safety net for
17:17
all of our orders for fulfillment the
17:19
next day did you have that in mind when
17:21
you decided to open up here absolutely
17:25
the amazing story of whether bovine
17:28
heart tissue can make it from Australia
17:30
to a u.s. lamb to a patient in time for
17:32
surgery
17:33
FedEx is also selling its heroic seats
17:36
when it comes to healthcare logistics
17:40
what's in here well these are samples
17:42
that we would typically receive from say
17:44
a clinical site
17:45
Lisa Jennings CEO and president of circ
17:48
West labs is a cold blooded shipper
17:51
literally the company conducts lab work
17:53
for clinical trials and its proximity to
17:56
the FedEx superhub help secure a recent
17:58
deal with the American Heart Association
17:59
it kind of relaxed a little bit and
18:02
thought well gee you know Memphis may
18:03
really be the spot that we want to place
18:05
this trial because of FedEx headquarters
18:08
FedEx looks like it will try and match
18:10
ups as adjacent business strategy this
18:13
facility used to repair their own field
18:15
scanners and equipment is opening its
18:17
doors to outside business Carey Pappas
18:20
is president of FedEx tech connect if
18:22
you're a manufacturer of pcs or handheld
18:24
devices scanning equipment servers those
18:27
kind of things those would be definitely
18:29
in our target audience for what we're
18:31
looking for
18:31
Pappas admits FedEx is new to the
18:34
concept we have a handful of customers
18:37
that we've just signed again we're about
18:38
four or five months and so we're in our
18:40
infancy at this point but we're working
18:41
hard the delivery challenge is on the
18:48
package wars can get wet and wild with
18:51
the delivery Giants clawing for the
18:53
great PR that comes with the most
18:55
unusual delivery FedEx created
18:58
pandemonium delivering two giant pandas
19:01
from China to engross Scotland the eight
19:04
year old arrived on a Boeing triple7
19:06
dubbed the Panda Express
19:09
but ups had been there done that over a
19:11
decade earlier Brown even called it the
19:14
Panda Express on the company delivered a
19:16
pair to the Atlanta zoo
19:18
only after the zookeepers signed for
19:20
them of course
19:21
FedEx got us feather in its cap for
19:23
safely delivering nine bald eagles from
19:25
the San Francisco Zoo to a sanctuary in
19:30
Tennessee and after the Gulf oil spill
19:33
70,000 endangered sea turtle eggs were
19:35
FedEx out of harm's way
19:37
to Florida's Atlantic coast have a whale
19:40
of a delivery both companies have
19:42
handled that the largest fish in the sea
19:45
took flight with ups when the company
19:47
shipped two female 14-foot whale sharks
19:50
from Taipei Taiwan to Atlanta Georgia
19:52
not to be out swamp FedEx up the ante
19:56
shipping not one but seven beluga whales
19:59
they needed a temporary vacation spot
20:02
while Chicago's Shedd Aquarium was being
20:04
renovated PR events aside these
20:07
oversized deliveries require expertise
20:10
and both companies want you to see the
20:12
big guys trust them to get the package
20:14
there on time no matter what's inside
20:18
millions of people rely on both brands
20:20
every package is a person