UPS expands deal with Google Cloud to increase data analysis

UPS expands deal with Google Cloud to increase data analysis
Published - Mar 29, 2022 @ 12:58 PM (EET)

As the logistics company rolls out new data initiatives, United Parcel Services (NYSE:UPS) is set to announce an expansion of its 2019 deal with Alphabet's Google Cloud


UPS has been using Google Cloud resources for various functions, and as part of the expansion, the American multinational company will receive increased network, storage, and compute capacity.


Moreover, the logistics giant will continue to use Google's artificial intelligence and machine-learning tools to analyze incoming data, which are expected to surge through new features like adding radio-frequency identification chips (RFID) on packages.


Google's Harmonized Enterprise Analytics Tool (HEAT) platform provides insight into how packages move through the logistics process and enhances how UPS gives customers control over their deliveries.  The platform works together with UPS's On-Road Integrated Optimization and Navigation system.


According to Jordan Speer, a supply-chain research manager at International Data Corp, the Covid-19 pandemic, supply-chain disruptions, and the rise in e-commerce have spurred logistics companies to seek more detailed data on things like locations of trucks and delivery routes.


The value of the deal or the size of the cloud capacity increase is still unknown as both companies declined to comment on the matter.


DATA ANALYSIS


According to the Wall Street Journal, UPS has more data to analyze now that it is equipping packages with identification chips, having delivered more than 25 million packages a day in 2021.


President of Google Cloud for North America, Kirsten Kliphouse, said that the timing is right to expand the relationship between Google Cloud and UPS, partly due to the increased data points coming from UPS's operations and the need for deeper analysis.


CONSENSUS RATING


With a Moderate Buy consensus rating, the Street is cautiously optimistic about UPS stock.  The average UPS price target of $241.35 implies an upside potential of 9.91% to current levels. 


Over the past six months, shares have increased 24%.

                                                        


The Google deal "is a great conclusion to many things we've been doing in digital transformation." - Perez


In addition, Chief Information and Engineering Officer Juan Perez will be leaving UPS this week after 32 years.  He will be joining software company Salesforce.com Inc. on April 4 in his new role as CIO.


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