BEFORE THE

 

NATIONAL TELECOMMUNICATIONS AND INFORMATION ADMINISTRATION

 

UNITED STATES DEPARTMENT OF COMMERCE

 

WASHINGTON, D.C.

 

 

 

Response to Request for Comments:

 

Section 105(a) of the Electronic Signatures in Global and National Commerce Act

 

 

 

Comments of:

 

United Parcel Service

 

 

Communications with respect to this document should be addressed to:

 

Kirsten Envall

Public Affairs Manager

United Parcel Service

316 Pennsylvania Avenue, S.E.

Suite 300

Washington, D.C. 20003

(202) 675-3362


BEFORE THE

 

NATIONAL TELECOMMUNICATIONS AND INFORMATION ADMINISTRATION

 

UNITED STATES DEPARTMENT OF COMMERCE

 

WASHINGTON, D.C.

 

 

Response to Request for Comments:

 

Section 105(a) of the Electronic Signatures in Global and National Commerce Act

 

 

Comments of:

 

United Parcel Service

 

 

United Parcel Service (UPS) respectfully submits these comments in response to the March 2, 2001 Request for Comments on Section 105(a) of the Electronic Signatures in Global and National Commerce Act (ESIGN).  (Docket No. 010222048-1048-01)  Section 105(a) requests the Secretary of Commerce to conduct an inquiry and report to Congress on the effectiveness of delivery of electronic records to consumers as compared with the delivery of written records via the United States Postal Service and private express mail services. 

 

UPS is the world’s largest package distribution company.  In 2000, UPS delivered 3.5 billion packages and documents, and earned $29.8 billion in revenue.  On average, UPS delivers 13.6 million packages and documents each day, or approximately six to seven percent of the U.S. gross domestic product (GDP).  UPS serves every address in the United States and more than 200 countries and territories worldwide with approximately 359,000 employees.

 

UPS supports ESIGN and the concepts it advances, and believes that it will facilitate electronic commerce in ways not yet imagined.  UPS sees many potential opportunities as ideas and technology mature and ESIGN is fully implemented.  These opportunities may take many years to take shape, and we see our company as being at the forefront of their development -- incorporating them into our existing products and services and leading to the creation of new ones. 

 

UPS is an enabler of global commerce, providing the infrastructure that allows trade to move in an efficient and reliable manner.  We blend three flows of commerce in the marketplace: the movement of goods, information and funds to provide total supply chain solutions to our customers.  We use technology to enhance each of these three flows of commerce.  The delivery of physical goods is our core business, and we see that continuing as we move forward.  The development of the “virtual world” will not replace the physical delivery of goods, but rather will both coexist and enhance each other.  The development of electronic commerce has allowed UPS to offer “value added” services that enhance our core business of package delivery. 

 

The Movement of Goods

UPS’s core business is the movement of physical goods in a door-to-door transaction (as opposed to mailbox-to-mailbox).  We offer different levels of service, many with time-definite delivery and money-back-guarantees.  Our services range from Next Day Air Early A.M. (guaranteed delivery by 8:30 a.m.) to our regular ground service, and can meet a wide range of customer needs. 

 

The proliferation of the Internet has enhanced package volume at UPS and allowed new goods to enter our system both in terms of business-to-business and business-to-consumer transactions.  Zona Research found that during the 1998 holiday season, UPS delivered 55 percent of all goods ordered over the Internet.

 

The development of electronic document delivery has allowed UPS to develop new products that utilize technology.  UPS Document Exchange is a suite of products that enables users to immediately ship over the Internet anything that can be contained in a digital file, including documents, images and software.  UPS OnLine Courier is the most popular of these products.  It provides secure document delivery by providing up to 128-bit encryption, password only access, instant delivery notification and allows the sender to recall or cancel delivery of the file.  UPS OnLine Courier allows the transmission of files up to 70 MB in size. 

 

This electronic product provides significant time and cost savings versus physical delivery.  In addition, electronic documents are more portable than physical (paper) documents, and the amount of business conducted by mobile workers is growing.  UPS meets the needs for mobile, portable documents through access to UPS OnLine Courier from wireless or portable web-enabled devices. 

 

While the market demand for UPS Document Exchange and similar products has not yet developed, we see them as having real potential in the financial services, legal and medical fields.  We continue working to develop demand for this product.

 

Movement of Information

Almost as important as the movement of physical goods is the information about them.  UPS tracks every package moving through our system in real-time and makes that information readily available to our customers.  UPS invests approximately $1 billion a year in technology to build and enhance systems that provide thorough, timely and accurate information about each package moving through our system.  Technology allows UPS to provide information-based, value-added services to our customers, which compliment our core business of package delivery.

 

The UPS website, www.ups.com, receives approximately 40 million hits per day, 4 million of which are online tracking requests.  By tracking a UPS package on the Internet, the customer is able to receive instantaneous information about their package.  It is also much cheaper for UPS to provide tracking information via the website versus our telephone customer service lines. 

 

UPS provides customers with Web-enabled tools to help them solve their transportation and logistics needs.  Customers can download UPS OnLine Tools from the UPS website and imbed our services into their own website or desktop.  Some of the functionalities UPS OnLine Tools provides include: UPS Tracking, UPS Signature Tracking, UPS Rates and Service Selection, UPS Time in Transit, UPS Address Validation, and UPS Shipping.  There are approximately 50,000 users of UPS OnLine Tools.

 

Information can also create internal efficiencies at UPS, which in turn benefit our customers.  For international shipments entering the United States, UPS collects basic information about each shipment and electronically transmits that data to U.S. Customs.  Customs is able to analyze the information and determine which shipments to clear and which shipments to inspect – before the packages arrive in the U.S.  As a result, we are able to fulfill our obligations to Customs while maintaining our service commitments to our customers. 

 

Electronic information can also trigger other automated business processes (such as billing or inventory management), thereby reducing costs and improving responsiveness and quality.  UPS has pioneered efforts to equip business with the information that enhances inventory control and other business planning and business operations software. 

 

Movement of Funds

The UPS Capital Corporation, a wholly owned subsidiary of UPS, provides financial products and services that enable growing businesses to expand operations, market to new accounts, improve inventory, accelerate cash flow, lease new equipment, expand working capital, and reduce risk.  UPS Capital Corp. offers C.O.D. enhancement services, distribution finance, equipment leasing, electronic invoicing and payment, global trade finance and insurance solutions.  These financial services work in tandem with our package delivery and information-based services to provide total solutions to our customers.

 

 

* * * * * * * *

 

UPS seeks to integrate three flows of commerce to help customers solve their transportation and logistics needs: the movement of goods, information and funds.  The development of electronic commerce, including tools like electronic document exchange and electronic signatures, enables UPS to add value to existing products and services, and to develop new products and services that enhance these three flows of commerce.