From basement to giant

The American Messenger Company started in nineteen oh seven delivering telegrams and packages by bicycle from a Seattle saloon basement.By founder James E.

A stable but threatened model

Until the early nineteen fifties, UPS served only fourteen cities, delivering for downtown department stores and retailers.

The threat Casey saw coming

After World War II, suburban shopping centers grew.Customers could park free and load purchases into their cars instead of riding buses downtown and having deliveries made.

The pivot: becoming a common carrier

Casey decided UPS should remake itself from a retail delivery specialist into a carrier serving manufacturers, distributors, and wholesalers.

Selling change to employees

Rather than announcing layoffs as retail deliveries declined, Casey told managers and unionized workers that UPS believed in promotion from within, but growth was needed to create opportunities.

“A stagnant business offers no opportunity for anybody.”

Milking the old business

Casey did not wind down retail delivery as it became less profitable. Instead, UPS sorted manufacturer and wholesaler shipments in the same facilities and delivered them by the same drivers as retail parcels, preserving jobs…

Designing a protected niche

Casey wanted UPS to specialize in small parcels, averaging less than ten pounds.He testified before California regulators that parcel delivery was unique and different from other trucking.

Regulatory advantage

Regulators barred UPS from transporting items exceeding a specified size and weight.These restrictions, mandated at UPS's own request, gave it an enormous competitive advantage.Established trucking companies had to haul large freight, but UPS could specialize.

A private company stays hidden

As a privately held company, UPS had no need to promote itself to investors.Casey deliberately kept UPS out of the public eye.

“It pays to mind our own business and keep on sawing wood.”

New strategy demands visibility

UPS's new strategy required interaction with state and federal regulators who controlled routes, freight types, and rates.

Casey steps back, hires experts

Casey recognized he was out of his depth as a public figure.In nineteen fifty-six, UPS assigned its first public relations staffer.

Bernays's research and strategy

Bernays urged UPS to interview customers and prospective customers, who overwhelmingly responded that they had no impression of UPS and did not care to know more.

Casey admits the mistake

Casey acknowledged that hiding UPS from the public had been a serious mistake.We were somewhat akin to Rip Van Winkle on that one, he said.

“We were somewhat akin to Rip Van Winkle on that one.”

Building public awareness

Managers took more active roles in local business groups.Advertisements became more prominent.By the late nineteen sixties, UPS was a familiar name in much of the country, helping it win regulatory approval and attract new customers.

The subscription fee innovation

UPS proposed charging shippers a small weekly fee, two dollars in most of the country, in return for which a UPS truck would call to pick up outbound shipments five days a week.

Undercutting competitors profitably

The subscription fee revenue allowed UPS to set its per-item rates well below those charged by other carriers and still make a profit.

From eroding to dominant

In nineteen fifty-one, UPS's business was eroding as customers changed their shopping habits.Two decades later, after Casey stepped down as president but remained active on the board, UPS overtook the U.S.

Legacy: enabling modern commerce

Casey's innovations paved the way for the modern logistics industry and the ecommerce revolution. Our ability to obtain almost anything from anywhere with just a credit card and a couple of days' patience rests on…