UPS Among First to Deploy New Customs Security Technology

ATLANTA, Aug. 29, 2005 - UPS (NYSE:UPS) today announced it has become one of the first transportation carriers to deploy a trade processing system developed by U.S. Customs and Border Protection (CBP) that accelerates cross-border commerce while improving security at the nation’s borders.

The Automated Commercial Environment, or ACE, is part of a multi-year modernization effort by the CBP that automates the flow of information about packages approaching U.S. borders in trucks, making it easier for customs agents to decide what they wish to inspect. UPS worked with CBP to pilot the program in Blaine, Wash., the first land port to transition to the new system.

“Tying our UPS business information systems to ACE not only provides our customers with tangible benefits like faster customs clearances, it also supports the Department of Homeland Security’s dual mission to facilitate legitimate trade and secure our nation’s borders,” said David Barnes, senior vice president and CIO of UPS.

As part of the ACE program, an electronic manifest for trucks was introduced in Blaine last December to replace a paper-based process. Under the old system, UPS had to submit paper manifests to CBP with shipment information, which CBP then had to review manually to select goods for inspection. UPS finally would direct its internal information systems to “flag” the selected goods as they were passing through the port so they could be pulled and inspected by CBP.

“Since UPS moves hundreds of shipments across the border at that port every business day,” Barnes said, “a significant amount of paperwork was required under the old system. ACE changes all that, totally automating the truck manifest process"

With the new ACE system, UPS not only provides CBP with shipment information electronically through an EDI connection, it also provides information on the vehicle and the UPS driver. CBP now can verify quickly the legitimacy of vehicles and drivers as well as run the shipping data through electronic filters to make inspection selections. These selections can be determined before a shipment reaches the border. Goods not selected for inspection and that comply with U.S. laws can be expedited.

UPS worked closely with CBP during the pilot to test the system, successfully sending the first electronic truck manifest last February. UPS now is working with CBP to deploy ACE at all 11 of its land port operations.

The ACE system will be deployed to every land, sea and air port of entry where CBP has a presence over the next five years. To stay updated on CBP modernization activities, visit www.cbp.gov.

CBP has not yet deployed ACE for air transportation. But in 2002, UPS implemented a software program it developed called Target Search to assist the CBP officials inspecting shipments coming through Worldport, UPS’s largest international air hub in Louisville. Like the ACE system, Target Search provides electronic information to CBP officials so that they can effectively target and select shipments for inspection ahead of time, expediting the customs clearance process.

“Our involvement in the ACE program and our development of systems like Target Search are part of our strategy to synchronize global commerce,” Barnes said. “Programs like these that expedite trade particularly benefit UPS’s Trade Direct Cross Border, brokerage and small package customers.”

UPS is the world’s largest package delivery company and a global leader in supply chain services, offering an extensive range of options for synchronizing the movement of goods, information, and funds. Headquartered in Atlanta, UPS serves more than 200 countries and territories worldwide. UPS stock trades on the New York Stock Exchange (UPS) and the company can be found on the Web at UPS.com.

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Donna Barrett

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UPS

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