UPS used artificial intelligence and machine learning to help its network capacity match shrinking volume levels in the second quarter, Chief Executive Officer Carol Tomé said on an earnings call last week.

Technological advances are helping the delivery giant respond more nimbly to demand trends. The suite of technologies has allowed UPS to quickly adjust package flows in its U.S. operations as shippers face a massive loss of packages at the height of the company’s contract negotiations with the International Brotherhood of Teamsters.

“When we saw traffic start to slow and get diverted to other competitors, we were able to use our tools to move traffic from non-automated centers to automated centers,” Tomé said. This helped the company reduce labor hours by nearly 10%, in line with a 9.9% drop in average daily package volume in the United States.

Technological advances are helping UPS and its vast package delivery network become more flexible in the face of unexpected changes, such as customers shifting packages to other carriers because of strike concerns. The company’s network planning tools can “do in an afternoon what used to take teams of engineers months to do,” Tohme said.

UPS relies on these tools to quickly find ways to make its package-sorting operations more efficient and reduce costs. Chief Financial Officer Brian Newman said the company reduced costs in its U.S. division by $889 million in the second quarter with the help of technology improvements.

The greater reliance on automated centers is an example of how UPS is cutting costs. Due to a sharp drop in package volume, UPS has reduced the number of non-automated warehouses by 18% and reduced the number of operating personnel by 7% year-over-year, according to an investor presentation.

UPS also made progress in deploying its smart package program across its U.S. network, which includes placing RFID tags on packages and wearable devices on workers to eliminate manual scanning and increase processing. Tomé said that by the end of the second quarter, nearly 50% of its U.S. warehouses had adopted the technology. The company expects the deployment to be completed by the end of October.

Tomé said the next phase of the smart package initiative would have the company’s delivery vehicles, rather than employees, scanning packages. “There is no finish line when it comes to increasing efficiency,” she said.

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