Inside The UPS Man, a Biography of UPS Founder James E. Casey

0:01Hi, I'm Kelly Barner and this is the Art of Supply podcast. Every business story has a supply chain angle and those stories deserve to be told. This show digs deep into news headlines and interviews thought leaders, executives, and newsmakers to capture their perspective in their own words. With no agenda to lead us in any particular direction. We'll offer you objective coverage of geopolitics, innovation, and competition. Facts will always take precedence over hype. The rest is up to you. The only way we can find out what a person is capable of doing is to give that person the opportunity of trying and the responsibility of producing results.

0:53That is a quote from UPS co-founder James E. Casey, and he said that in 1948. Now, it sounds like the philosophy of a patient, generous boss. In a lot of ways, he was. But according to the author of a new book, the same man built a company where managers understood that they were to, quote, ignore the limits of the law if necessary to force out competitors and keep customers. That book is The UPS Man, James E. Casey and the Creation of Modern Logistics by Mark Levinson. Now, if you're with me on YouTube, nope, the show is also always on YouTube, here's my copy. Absolutely excellent. I will say this right up front, this is one of the best supply chain books that I've read.

1:45And I think everyone who works in supply chain or logistics should read it. Now, that's not because it flatters UPS or makes working in supply chains look glamorous. It does not do either of those things. And that's what makes it so real and so valuable. In this episode of Art of Supply, I'll cover how UPS mastered centralization and scale decades before anyone thought of calling it logistics and why they had no choice. The long, creative, and sometimes shaky relationship between UPS and the rules, including the Interstate Commerce Commission. And the gap between the UPS most of us know and the one Mark Levinson pieced together without the company's help in order to write this book.

2:36Now, before I read this book, and it's newly published, I would have assumed that UPS figured out everything we know about them gradually over time. I expected the operational strategies we associate with them to have come into place as competitors faced them or as margins narrowed. But they didn't. Some of the most critical innovations that make them a successful company were there from the very beginning. Now let's start with them in Seattle. So James Casey was the founder of the company we know today as UPS, but he started that from a very modest place. In 1907, he was 19. He and a friend borrowed$100 to start the American Messenger Company.

3:27Their first real innovation, so all the way back in the early 1900s, was consolidation. The King Brothers department store capped what it would pay at an average of 17.5 cents per parcel. So Casey combined their packages with other stores' deliveries at his own office. That one move turned a messenger service into a full delivery service. By 1917, Casey was planning a central depot to sort parcels from many stores instead of running each delivery from store direct to customer. Mark Levinson points out that hub and spoke is everywhere today, from airlines to container lines, but that was not how anything worked in 1917.

4:14It was truly innovative then, and it remains innovative today. So this is an example of one of those innovations that wasn't developed over time to help UPS compete. In fact, these early innovations were what allowed the company survive long enough to grow. Jim Casey designed a slanted revolving sorting table that fed root bins, and they loaded in in root order in order to cut the drive time. By the mid-1920s, a former GM and Ford engineer had joined UPS and designed a 180-foot conveyor system so that they could sort packages in California. Now, the reason all of these innovations and all of this efficiency matters so much is the oldest business story of all, thin margins.

5:06In 1921, the Oakland UPS operation ran 35 vehicles, and it earned not even$1 ,000 on about$115 ,000 in revenue. That's 0.8%. That is tight. Now, their ambition grew with their efficiency. In 1954, Jim Casey set a goal of two-day delivery of small packages to any city or town in the United States. He also made it cheaper than any other option and said that the company was going to make it real within 10 years. Mark Levinson's assessment is that those 1910s operating methods, refined constantly over time and using scientific management still remained valuable decades later. Now, that brings us to the part of the story I was the least prepared for.

6:02UPS's willingness to stretch the rules and in fact sometimes break the law shocked me. It definitely contrasts with the gentle, quiet image of Jim Casey that we might otherwise have. And frankly, it's not something I associate with the UPS brand at all. Mark Levinson puts this right on the table in his introduction, writing, quote, The long supply chains that routinely furnish us with everything from medicines to miter boxes would not be so easy to forge were it not for a very reserved man who had an obsessive fascination with parcels, an openness to new ideas, and at times, a willingness to bend the rules and override his own stated principles in order for his company to succeed.

6:49Now, to follow along in this part of the story, I think it helps to share a little bit of background on the Interstate Commerce Commission, or ICC. They play a huge role in UPS's growth across the nation in this book. The ICC was approved on February 4th, 1887, and it made railroads in the United States, the first industry that were subject to federal regulation. By 1940, their authority covered all common surface carriers, including trucking companies and express agencies. So two similar sounding terms with very different meanings are important here. A common carrier has to serve anyone who wants to ship whatever it is authorized to carry.

7:36while a contract carrier is allowed to serve only specific customers under private negotiated contracts. Mark Levinson points out in the book that regulators predominantly saw their job as preventing chaos. So for instance, keeping truckers from driving each other out of business by protecting established companies' profits would have been something that they considered important. And by the 1930s, UPS was an established company, so they became part of this effort to ensure that consistency and stability existed. UPS figured out from a very early point how to make these regulations work for them against the competition.

8:22When California started regulating truckers in 1917, UPS couldn't just copy the model that had worked for them in Seattle in their early days. So in 1919, Casey bought an option on a failing Oakland company for less than$20 ,000. He basically just wanted the operating rights that predated the new rules and therefore grandfathered the company in terms of how they could function in the area. In 1926, the California Railroad Commission ruled that parcel delivery was, quote, essentially different from other trucking, and that continued to allow UPS to operate in a very special space. To quote the book on this, henceforth, in case after case, UPS would win permission to do things that other trucking companies could not.

9:17In 1934, a federal appeals board under the National Recovery Administration made the exact same call. They also ruled UPS a unique type of trucking company that therefore wasn't required to pay trucking wages. Now, when the Motor Carrier Act of 1935 put interstate trucking under the ICC, it barred running common and contract carriers on the same route unless the ICC found it in the public interest. Mark Levinson calls that provision, quote, a loophole big enough to drive a truck through. And I would even add to that, it was a loophole specifically designed to allow a UPS-shaped brown truck to drive through.

10:06Then there are some parts of the story that go past bending the rules or go past shaping regulation. In 1938, UPS secretly bought a Bay Area delivery company through its own law firm, then used it to buy out a rival owner. Fred Jacobson, who had refused to sell his company to UPS. UPS revealed that it was the real owner of the company that acquired Jacobson's firm. 15 years after the deal went through, talk about playing a long game and being able to keep secrets. And this wasn't the only secret. In 1958, UPS made a secret deal with a Philadelphia competitor, Hourly Messengers, to divide the market up.

10:56Mark Levinson characterizes this as a blatant violation of antitrust law. In 1971, retired Supreme Court Justice Tom Clark ruled that UPS had monopolized retail parcel delivery in San Francisco, and he named Jim Casey, 82 years old at that point, as the person who had largely shaped its policies. Then, after this statement, UPS settled the case privately. So Justice Clark's 50-page opinion was never published publicly. The irony is how this chapter of their story ends. For nearly 50 years, UPS told regulators that parcel delivery was different from other trucking. But having won that argument so conclusively, they couldn't credibly claim in an antitrust case that other truckers were real competition for them.

11:52The Motor Carrier Act of 1980 stripped the ICC of most of its authority over truckers' rates and routes. So after decades of using regulation to keep rivals out of its markets, UPS now had to compete head-to-head. And there was a new competitor they hadn't been watching. When Federal Express started flying documents in April of 1973, UPS still saw the parcel post as their main rival. FedEx, quote, barely registered. But that would not always remain the case. UPS bought their first plane in 1981, and they opened their Louisville hub in 1982. The ICC was abolished by the ICC Termination Act of 1995, after its staff shrank from about 2 ,000 in 1970 to fewer than 400.

12:44So UPS existed long enough, not just for the technology and consumer demand to change, but the whole regulatory space evolved as well. Now, given the juicy nature of some of these stories, I have to ask the question, why most of us have never heard of many of these stories? Now, UPS refused Mark Levinson access to their corporate archives when he reached out to say that he was writing the book. And he comments on that dynamic many times, most intensely early in the book. And he's fair and he calls himself out whenever information had to come from hearsay because he didn't have a better documented source to look to.

13:25Now, my opinion on this is that it certainly would have been interesting to have UPS's participation in the book. And I would have loved for Mark Levinson to have had access to their archives. But I also appreciate the fact that he followed and told the story as he found it, even, or you might say especially, when that story was unflattering to UPS. Now, there are a few places where the official story and the record actually don't match. Casey got married in 1924, then let thousands of later employees believe he had never been married. A 2007 book by a UPS communications insider flatly said that he was never married.

14:10The 1929 policy book, a guide given to drivers dictating etiquette requirements and uniform and behavioral requirements, included the statement, quote, we hire only white men under 40. Now, UPS hired its first black driver in 1953. So Levinson calls the company's 2017 claim that inclusion, quote, has always been part of the engine of our enterprise, flatly untrue. Now, the biggest myth of all involves the Teamsters. So I will just say from the moment I opened this book, I was waiting for the Teamsters to show up in the story. They're often cast as the villains. I mean, they certainly have a colorful approach to public negotiations and communications.

14:57And I was genuinely eager to hear how that relationship started. So what's interesting is that UPS and the Teamsters basically tell the same story about the origins of their relationship. In 1916, Jim Casey went to the Teamsters and asked them to organize his company. Mark Levinson, in his research, found no documentary evidence for this claim. Standard reference works do still repeat it, saying drivers joined with Jim Casey's, quote, tacit approval. Now, Mark Levinson's conclusion is that Jim Casey's UPS was, quote, far less union friendly than both the UPS and Teamsters mythologies portray it.

15:42UPS accepted a union shop in Los Angeles in 1941, only after a nearly month long strike. And in 1967, after 1 ,500 Philadelphia-area Teamsters walked out, UPS closed the entire operation in the Philly area for three years. The first national Teamsters contract came in June of 1979. That covered 70 ,000 workers in 220 locations. Now, UPS was facing one bargaining partner, quote, powerful enough to shut the entire company down. The Teamsters certainly kept UPS on its toes, first regionally and then nationally. Now, then there's the company's image. The idea for the color brown came from an early partner, Charles Soderstrom, who moved the company from a red and yellow color combination to a conservative brown.

16:43with every vehicle cleaned every night to make sure they were able to impress department store decision makers and also customers. When old package cars were kept for the Christmas rush just so they could move additional volume, they were deliberately painted green and did not have the UPS company name on them so as to, quote, not reflect badly on UPS. UPS has done an excellent job crafting their public image. The drivers and the trucks that Jim Casey was so controlled about still shape how consumers see the company, even in the digital age. So just to sum up a few of my takeaways from reading the book, UPS's operating model was not a late competition-driven innovation.

17:32Centralization and scale were what kept them alive long enough to go national. The company grew by working the rules and the regulators, and sometimes by breaking them. And a lot of that history has stayed out of public view through private settlements, closed archives, and a very carefully maintained public image. The bottom line is that the UPS man, the book, shows how one of the companies that defines our industry was built, including the parts it would rather we didn't see. Now, the next chapter of the Teamsters UPS story is already on the calendar. The current contract now covers more than 300 ,000 workers, and it runs through the end of July 2028.

18:20This is the largest private sector collective bargaining agreement in the United States. Sean O 'Brien was reelected Teamsters General President in July of 2026, so his second five-year term starts in March of 2027. He will, in fact, lead those negotiations. When that round starts, we should all listen carefully to how both sides tell the history of their relationship. The UPS story is impressive, but it's not squeaky clean. It is real and raw and fascinating, and Mark Levinson does an excellent job telling it. As he writes, quote, for Jim Casey, delivering parcels was a noble profession and it was to be done the right way.

19:10My advice, read the book. Then take a look at the next brown truck that pulls up to your door. The trucks are still squeaky clean, but the dirt of the history is absolutely there. And the reality is that is how growth happens in the real world of supply chain.

19:34art of supply is part of the art of procurement family of brands to ensure you never miss new content i invite you to sign up for our newsletter at artofsupply.com if this episode of the art of supply podcast made you think please spread the word you can support the show by giving us a thumbs up, a star rating, or review wherever you find your podcast audio. Join me next week for another deep dive into the art of supply.