The News: UPS and Google Cloud are extending their collaboration deal to broaden UPS’s use of Google Cloud’s data analytics services and cloud infrastructure. The service expansion comes as the logistics and shipping company is eyeing the use of RFID chips on packages, which will greatly increase the amount of data it must track and analyze as part of its operations and package delivery processes. Read the full UPS Press Release here.

UPS Expansion of Its Google Cloud Data Analytics Deal Points to UPS Garnering Even More Insights from Its Growing Data Tsunami

Analyst Take: Three years ago, Google Cloud announced a deal with logistics and package delivery service UPS to provide powerful data analytics services to help UPS better plan its delivery routes to reduce fuel consumption by about 10 million gallons a year in its truck fleet and save about $400 million annually. UPS delivers about 25 million packages per day around the world and with a booming ecommerce landscape, there’s every reason to expect those numbers to continue to rise.

It clear that the program has been successful enough that UPS is now expanding that deal with Google Cloud to increase its use of data analytics as it begins to review initiatives that include the possible use of RFID chips on packages to better track their movement.

I believe this is exactly the kind of collaboration that companies like these should be expanding in a world where data generation is increasing every moment of every day. Using Google Cloud’s massive data analytics and cloud infrastructures, this is a smart move by UPS to dive even deeper into new and more broad analyses of the huge amounts of delivery, location, routing, and customer data the company is generating daily.

From deeper analytics will come deeper insights, which is where companies gain enormous value from their data, which can then be used to help them innovate and expand in additional new ways.

It appears as though UPS gained useful, clear and money-saving insights through its first collaboration with Google Cloud in 2019 and that the partnership helped UPS better plan delivery routes and increase efficiencies.

The latest deal expansion will add a higher level of predictive data analytical capabilities to UPS’s global logistics network infrastructure, while also improving customer experiences, generating operational efficiencies and reducing the company’s carbon footprint, according to UPS.

Additional Compute Resources is Both Forward-Looking and a Smart Strategy

What stands out in this latest services expansion is that UPS will gain the additional computing resources needed to trial package delivery improvement initiatives such as the use of common RFID chips, according to a March 29 report by The Wall Street Journal. RFID tags have been around for a long time and are used in a wide range of shipping and logistics environments, but until now they have not been widely used by UPS.

Presently, RFID chips are being used in trial initiatives by UPS to evaluate the technology, according to the Journal report. A broader use of RFID chips would potentially add a large amount of data to UPS’s systems, where is where the expanded Google Cloud services and analytics would add critical capabilities.

I believe this is a forward-looking and smart strategy for UPS and will allow it to find even deeper efficiencies in its operations. Other enterprises should be watching the progress of these efforts with interest to see how such initiatives could help them as well.

UPS is already using Google Cloud technologies in its UPS Harmonized Enterprise Analytics Tool (HEAT), which is an in-house business intelligence platform that uses advanced predictive analytics to provide precise forecasting and the ability to see and control how packages move through UPS’s network.

As we’ve mentioned numerous times before, smart partnerships like these are rapidly becoming a foundational business strategy. I’ll look forward to watching how the use of RFID chips plays out — and I’m sure I won’t be the only one paying attention.

Disclosure: Futurum Research is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.