UPS, with annual revenue of $33 billion, said the project should speed up package tracking and help create customized services.
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UPS expects to reduce repair costs by 35 percent and gain similar savings on the cost of spare equipment. The company said the project will create the largest Wi-Fi network in the world, connecting 55,000 devices when it is completed in 2007.
Faster data collection means that UPS can let customers know in advance that they can expect to receive a parcel and when it will arrive, UPS Chief Executive Mike Eskew said.
"Visibility has already allowed us to improve our service and cut costs (of customer queries) from $2 to one penny," he said. Drivers will also be able to transmit parcel data directly into customers' systems when they make deliveries using Bluetooth and Wi-Fi technologies.
Information about routes and how to pack a vehicle will be downloaded to the new data collection terminals. The company also plans for the terminals to connect via satellites using Global Positioning System, so it will be possible to tell drivers if they are in the right place for a particular delivery.
John Lamb of Silicon.com reported from London.