On this date in a Seattle basement, two teenagers launched one of the nation’s most iconic shipping companies
It was on this date in 1907 that two teenagers named Jim Casey and Claude Ryan, armed with a $100 loan, created the American Messenger Company. That business, started in a basement in Seattle, has grown into a nearly $50 billion package delivery giant. No longer called the American Messenger Company, most people today know it as Big Brown.
Earlier this month, Seattle honored UPS for its 110 years in business and declared August 28 “UPS Day” in the city. Now based in Atlanta, the company has transitioned from those early days of making home deliveries for drugstore customers or running other errands via bicycle, to a transportation powerhouse with over 108,000 vehicles and nearly 650 aircraft at its disposal. The company generated $51 billion in revenue in 2016, moving 4.9 billion packages and documents.
It’s a far cry from those humble beginnings. When Casey and Ryan started their business, they were not the first to specialize in message and parcel delivery – there were other established competitors. But their persistence and focus on providing the best service at the lowest rates helped the company prosper, according to a detailed history of the company on UPS’s website.
“UPS owes its proud and humble beginnings to Seattle,” David Abney, CEO and president, said earlier this month at a celebration in Seattle. “This company is rooted in the innovative, pioneering spirit that has always defined Seattle and its residents. The City of Seattle has been very gracious to declare August 28 as ‘UPS Day,’ and we deeply appreciate that Lt. Governor Habib and City leaders joined us today.”
Casey’s and Ryan’s business quickly caught on and more teenagers were hired as messengers. Casey’s younger brother George joined the company’s leadership. Today, UPS employs more than 434,000 around the world.
By 1913, America saw more use of the telephone, which diminished the need for messengers. Opportunity knocked and a merger was executed with a competing package delivery business owned by Evert McCabe. The American Messenger Company changed its name and focus. Now Merchants Parcel Delivery, the company started focusing on package delivery. McCabe’s business came with motorcycles and a Ford Model T was added to the mix, which opened up new opportunities. To control costs, packages for a specific neighborhood would be loaded onto a single vehicle for delivery.
In 1916, Charlie Soderstrom joined the company, bringing with him automobile knowledge, which helped Merchants expand its fleet.
Armed with a fleet of vehicles, company leaders began offering their services to retailers, becoming among the first dedicated carriers in the nation. By 1918, the company’s history notes, three Seattle department stores dropped their internal delivery services in favor of the new company.
1919 saw more changes as Merchants expanded operations, moving into Oakland, CA. With that came another name change and a familiar paint scheme. United Parcel Service was born and with it a new color choice – brown.
In 1922, the rapidly expanding business acquired a wholesale delivery service in Los Angeles that shipped products from manufacturer to distributor. Delivery to the public started, and common carrier service rights were acquired, opening up opportunities to deliver packages to private and commercial customers, in direct competition with the U.S. Postal Service.
“The offerings included daily pickups, cash-on-delivery payment acceptance, automatic return of undeliverable packages, and weekly billing, all at rates competitive with the post office. Common carrier services began slowly at UPS, spreading first throughout southern California,” the company’s history notes.
By 1929, air service had been added, but the Great Depression put an end to that expansion. By the end of the decade, UPS was offering retail delivery service along the Pacific U.S. Expansion followed after the U.S. stock market crash of 1929, with company headquarters moving to New York City.
The company continued to add department stores to its client list through the 30s and 40s, but the post-WWII demographic changes led to the growth of malls and fewer needs for department stores to delivery packages.
A rethinking of the business model was needed.
“UPS management sought to expand its breadth of services,” the company says. “In 1953 UPS began common carrier operations by providing package transportation services to the public in cities where the company did not require authorization by the state commerce commissioner or the Interstate Commerce Commission to do so. During the same year, Chicago became the first city outside of California in which UPS offered common carrier service. Amid the determined pursuit of common carrier service deregulation, the company reintroduced air service, offering two-day delivery to major East and West Coast cities in 1953.”
The push to achieve common carrier service status was not easy, though. The company submitted over 100 applications and it would take until 1975 before UPS was able to service every address in America.
The timeframe from the 1970s to 1990 saw the company expand internationally, offering services in Toronto in 1975 and reached the Middle East, Africa and Pacific Rim by 1989. Several acquisitions grew the company’s reach and air shipments became a larger part of the company’s business in the 1980s.
UPS Next Day air was introduced in all 50 states in 1985. UPS Airlines didn’t officially begin until 1988.
UPS moved to its current Atlanta headquarters in 1994 and started adopting – and creating its own – technologies to improve shipping and visibility of the supply chain. In 1992, the company introduced the Delivery Information Acquisition Device (DIAD). The handheld DIAD is carried by all UPS drivers and captures and uploads delivery information. It can even capture digital images of a signature to confirm delivery.
Drivers use the devices to stay in contact with operation centers, receive schedule changes, traffic updates and other information. The use of DIADs eliminated 59 million sheets of paper.
The company added more technologies in the 1990s, including shipping and tracking systems such as WorldShip, Quantum View, and CampusShip.
Late in the 1990s, UPS moved into specialty services for high-tech, automotive, and consumer goods industries and began acquiring companies with supply chain management and target industry expertise.
On November 10, 1999, UPS stock was available publicly for the first time.
The 2000s saw more change, including the dive into retail as UPS acquired Mail Boxes Etc. in 2001. Those 3,000 locations were rebranded UPS Stores.
More expansion followed, including non-stop delivery service between the U.S. and Guangzhou, China.
Throughout its tenure, sustainability has been a large part of the UPS story. The company utilized electric vehicles in New York City in the 1930s and today runs the world’s largest fleet of compressed natural gas vehicles.
It has also continued to expand. In 2004, UPS acquired Menlo Worldwide Forwarding and 2005 came a big purchase of Overnite, which allowed it to expand its ground freight services.
The past seven years have seen UPS continue on its current trajectory. More than 40 companies have been acquired, including Coyote Logistics in 2015, and continued technological advancements have been made. ORION or On-Road Integrated Optimization and Navigation made its debut in 2016. The software optimizes driver routes leading to more efficiency and improved customer service. The company has also rolled out its fifth generation DIAD V.
UPS may be 110 years old today, but it continues to move shipping forward with the same energy its teenage founders when they launched American Messenger Company back in 1907.
