Dive Brief:

• UPS is using Google Cloud Platform to design routing software, which saves the shipping company up to $400 million annually, according to a blog post from Google Cloud CEO Thomas Kurian.
• The logistics company uses the software to inform the driver where to go "every step of the way" and has cut fuel consumption by 10 million gallons each year. The software directs drivers throughout their 120 pick-up and delivery stops and even accounts for lunch breaks, said UPS CIO Juan Perez, during Google Cloud Next.
• UPS is also using Google's BigQuery for comprehensive forecasting with its one billion data points created daily, including the weight, shape, size, facility capacity and customer data, said Perez. The Google platform enables data analytics while running machine learning across the data points.

Dive Insight:

UPS delivers 21 million packages daily, but there is "only one route that is the best route" for delivery, said Perez. UPS and Google are working together to transform the shipping company's smart logistics network.

By using Google's platform UPS can forecast how to load delivery trucks or better position its network to accommodate a spike in traffic during the holidays, said Perez. The data needed for a complete picture of business is not limited to when drivers are delivering packages. It includes data around the loading docks and where packages are sorted.

Ultimately the company wants analytics for greater visibility and efficiency in its supply chain. UPS can answer the "what should be done" question by using tools like neural networks, recommendation engines and machine learning.

But UPS's choice to partner more deeply with Google comes as Amazon makes another leap into an industry outside of e-commerce. Retailers are hard-pressed to adopt Amazon Web Services because they fear storing their data on a competitor's cloud.

Last month Amazon was reportedly inviting companies to join Amazon Shipping, a service for companies to use Amazon's carriers to pick up packages from their warehouse.

UPS was indirectly listed as an Amazon competitor on its annual report, citing "companies that provide fulfillment and logistics services for themselves or for third parties, whether online or offline."

However, UPS benefits from Amazon's business just as brands and retailers rely on Amazon to sell their goods. Amazon also relies on other shipping companies to deliver its inventory and has to play nice to keep its business running.

While UPS undergoes its three-year $20 billion transformation, it's likely the company continue investing in cloud-enabled solutions. UPS spent $709 million on information technology in 2018, an increase from $560 million in 2017 "due to further development of technology enabled enhancements and capitalized software projects, according UPS' latest 10-K report.