AmazonScience/document-haystack

1CUSTOMER FIRST, PEOPLE LED, 2INNOVATION DRIVEN3Customer First is about reducing friction in the customer experience and meeting customer needs. While we 4experienced some volume diversion during our Teamster labor negotiation, our commitment to service allowed us to 5win back and win new volume following the ratification of the contract. In 2023, we continued to build new solutions 6for shippers and recipients. For example, we launched Hyperlocal, a data driven solution that leverages our U.S. 7facilities to provide select customers with a fast, next-day delivery option, and enables UPS to capture new profitable 8B2C and B2B volume. We also expanded Delivery Photo, providing 92% of our global residential stops a photo that 9shows exactly where the package was delivered, providing peace of mind to recipients and reducing “where’ s my 10package” calls. Customer First is also about growing in the most attractive parts of the market, like SMBs, certain 11enterprise customers, healthcare and international. In terms of SMBs, DAP is a competitive strength and SMB growth 12driver that generated $2.9 billion in global revenue in 2023. Additionally, returns continue to be a growth area for 13UPS. To accelerate that growth, we acquired Happy Returns and quickly made it available in over 5,000 The UPS Store 14locations, making returns even more convenient for consumers and merchants. Looking at healthcare, our strategic 15objective is to become the number one complex healthcare logistics provider in the world, and we are making bold 16moves to get there. For example, our acquisition of MNX Global Logistics enables us to reach new customers and new 17healthcare markets, like the radio-pharmaceuticals sector, with global time-critical and cold chain solutions. We see 18significant opportunity for complex healthcare and expect to continue to grow in healthcare over the next few years. 19We track progress in Customer First by improvements in our Net Promoter Score (NPS). In the U.S., we finished the year 20with a NPS of 44 and moved closer toward our target NPS of 50.21Moving to People Led, we are focused on the employee experience and making UPS a great place to work. In 22September, our five-year labor agreement with the Teamsters was fully ratified with overwhelming support from our 23union-represented employees. This win-win-win agreement continues to reward our employees with the best pay and 24benefits in our industry, which helps us attract and retain talent and provide industry-leading service to our customers. 25Further, UPS retained the flexibility we need to stay competitive, serve our customers and keep our business strong. We 26measure our progress in People Led by how likely an employee is to recommend others to work at UPS. In 2023, 65% 27said they would recommend employment at UPS to family and friends, an improvement of 14 percentage points over 28the past five years. Our goal is for Likelihood to Recommend to reach 80% or higher.29Lastly, Innovation Driven is about driving more productivity from the assets we own. Throughout 2023, productivity 30initiatives like Total Service Plan enabled greater agility to match network capacity with changing volume levels. 31Additionally, our Network Planning Tools (NPT), which use AI and machine learning, enabled us to adjust load planning, 32scheduling and volume flows across the network based on real-time data. This technology is powerful, and NPT can 33do in an afternoon what used to take a team of UPS engineers months to do. We also more closely aligned our digital 34businesses, including Roadie, Ware2Go, Delivery Solutions and UPS Capital as we adopt a bolder approach to digital 35commerce. We are accelerating new solutions to meet the needs of our customers and expanding our addressable 36market to drive profitable growth. One example of a recent innovation is UPS Capital’ s Delivery Defense, which uses 37predictive analytics to enable merchants to assess the level of delivery risk associated with addresses. We measure 38Innovation Driven by delivering high returns on invested capital, and in 2023, we delivered an adjusted return on 39invested capital* of 21.9%.