United Parcel Service

United Parcel Service, Inc.
Type Public (NYSE: UPS)
Industry Courier
Founded 1907
Headquarters Sandy Springs, Georgia, U.S.
Key people Scott Davis, Chairman/CEO
Products Courier Express Services
Freight Forwarding Services
Logistics Services
Revenue increaseUS$45.3 billion (2009)
Operating income increaseUS$3.80 billion (2009)
Net income increaseUS$2.15 billion (2009)
Employees 408,000 (2009)[1]
Subsidiaries The UPS Store
UPS Supply Chain Solutions
UPS Capital
UPS Airlines
UPS Express Critical
UPS Freight
UPS Logistics
UPS Mail Innovations
UPS Professional Solutions
Website UPS.com

United Parcel Service, Inc. (NYSE: UPS), commonly referred to as UPS, is a package delivery company. Headquartered in Sandy Springs, Georgia, United States,[2][3] UPS delivers more than 15 million packages[4] a day to 6.1 million customers in more than 200 countries and territories around the world.

UPS is well known for its brown trucks, internally known as package cars (hence the company nickname "The Big Brown Machine"). UPS also operates its own airline (IATA: 5X, ICAO: UPS, Callsign: UPS) based in Louisville, Kentucky where its Worldport air hub is also located.

Contents

Company structure

UPS's primary business is the time-definite delivery of packages and documents worldwide. In recent years, UPS has extended their service portfolio to include less than truckload transportation (primarily in the U.S.) and supply chain services. UPS reports their operations in three segments: U.S. Domestic Package operations, International Package operations, and Supply Chain & Freight operations.

U.S. Domestic Package

U.S. Domestic Package operations include the time-definite delivery of letters, documents, and packages throughout the United States.

International Package

International Package operations include delivery to more than 200 countries and territories worldwide, including shipments wholly outside the United States, as well as shipments with either origin or distribution outside the United States.

Supply Chain & Freight

Supply Chain & Freight (UPS-SCS for UPS Supply Chain Services) includes UPS's forwarding and contract logistics operations, UPS Freight, and other related business units. UPS's forwarding and logistics business provides services in more than 175 countries and territories worldwide, and includes worldwide supply chain design, execution and management, freight forwarding and distribution, customs brokerage, mail and consulting services. UPS Freight offers a variety of less than truckload (“LTL”) and truckload (“TL”) services to customers in North America. Other business units within this segment include Mail Boxes Etc. (the franchisor of Mail Boxes Etc. and The UPS Store) and UPS Capital.

History

UPS Boat on Canal Grande, Venice, Italy

Competitors

Major domestic (United States) competitors include United States Postal Service (USPS) and FedEx. In addition to these domestic carriers, UPS competes with a variety of international operators, including Canada Post, FCML COURIERS, TNT N.V., Deutsche Post (owner of DHL), Royal Mail, LDH EXPRESS, Japan Post, India Post and many other regional carriers, national postal services and air cargo handlers (see Package delivery and Mail pages). However, their earliest competitor was the Distributional Overnight Western National Service (DOWNS), a service with roots in the pony express that has since disappeared.

Historically, the bulk of UPS' competition came from inexpensive ground-based delivery services, such as Parcel Post (USPS) or Choice Logistics. But in 1998 FedEx expanded into the ground parcel delivery market by acquiring RPS (originally Roadway Package System) and rebranding it as FedEx Ground in 2000. In 2003 DHL expanded its US operations by acquiring Airborne Express, significantly increasing its presence in the United States, and adding more competition in the ground delivery market. In response to this, UPS partnered with the US Postal Service to offer UPS Mail Innovations, a program that allows UPS to pick up mail and transfer it to a USPS center, or destination delivery unit (DDU), for final distribution. This process is also known as zone skipping, long used by Parcel Consolidators.

More recently, the continued growth of online shopping, combined with increasing awareness of the role transportation (including package delivery) has on the environment, has contributed to the rise of emerging competition from niche carriers or rebranded incumbents. For instance, the US Postal Service claims "greener delivery" of parcels on the assumption that USPS letter carriers deliver to each US address, six days a week anyway, and therefore offer the industry's lowest fuel consumption per delivery. Other carriers, like ParcelPool.com, which specializes in residential package delivery to APO-FPO addresses, Hawaii, Alaska, Puerto Rico and other US Territories, arose in response to increased demand from catalog retailers and online e-tailers for low-cost residential delivery services closely matching service standards normally associated with more expensive expedited parcel delivery.

E-retailers should note that UPS allows package recipients to receive delivery at an address that is different from what the retailer places on the label. To avoid this, UPS requires their shippers to place two locks on their account, one each for domestic and international shipments, if proof of delivery at the billing address is necessary to protect against chargebacks. It is worth noting that FedEx, by default, does not allow consignee address changes for international packages, and so, does not require merchants to place blocks their shipping accounts.

Characteristic features

Brand mark

United Parcel Service logo (1919-1937)

United Parcel Service logo (1937-1961)

United Parcel Service logo (1961–2003)

United Parcel Service logo (2003-present)

In April 2003, UPS unveiled a new logo, the fourth the company has used, replacing the iconic package and shield originally designed in 1961 by Paul Rand. The original logo first saw use in 1916 when the company was American Messenger Company. In 1935, the logo was redesigned to reflect the company's new name United Parcel Service.[6] All four designs for the logo shared the shield theme, and UPS employees often refer to the brand mark as "the shield."

Brown

The brown color that UPS uses on its vehicles and uniforms is called Pullman Brown. The color is also mentioned in their advertising slogan: "What can Brown do for you?"[7] Originally founder James E. Casey wanted the trucks to be yellow, but one of his partners, Charlie Soderstrom stated they would be impossible to keep clean, and that Pullman railroad cars were brown for just that reason.[8]

Font

UPS commissioned brand consultancy FutureBrand to develop their own font, UPS Sans, for use in marketing and communication material. UPS Sans was created by slightly altering certain parts of FSI FontShop International’s font FF Dax without permission. This has resulted in an agreement between FSI FontShop International and FutureBrand to avoid litigation.[9]

Vehicles

Package cars

UPS package car from rear quarter. US variant, Corpus Christi, Texas

The UPS package car (or van) is a major symbol of the U.S. business world, with its iconic status referenced in an early-2000s ad campaign following UPS' sponsorship of Dale Jarrett in the NASCAR Sprint Cup Series: the ads were about how the company would prefer to race the truck over a stock car despite the futility of doing so, as "people love the truck".

The classic UPS package car is built on a General Motors or Ford chassis, has a manual transmission, manual steering, and no radio or air conditioning. The older ones are easily recognizable due to their round headlights and turn signals set onto a sculpted fiberglass hood. These are either Grumman Olson or Union City Body P-500, P-600, or P-800 step vans (a recent redesign changed the look, replacing the round turn signals with ovoid LED ones). The cars lack manufacturer's name or badges, thus parking tickets received against UPS for vehicles in delivery service have been dismissed in court; the enforcement officer having incorrectly identified the make on the ticket.

Newer package cars in North America have either a Freightliner Trucks or Navistar International chassis; automatic transmissions and power steering are slowly appearing in package cars. UPS also operates Dodge Sprinter box vans as well as Dodge Grand Caravan minivans.

UPS has ordered Modec electric vans for its UK and German fleets. Energy costs play a huge part in the potential profitability of package delivery companies like UPS, DHL and FedEx [10].

When package cars reach the end of their useful service life (typically 20–25 years or more), they are almost always dismantled and crushed for spare parts; the only exception being when they are repainted white for internal use. UPS vehicles that have been assigned an ADA (Automotive Destruction Authorization) must be crushed under supervision of UPS Automotive personnel.

When using non-proprietary trucks, such as Ford E-Series vans, Dodge Caravans, or Dodge Sprinters, UPS will often remove the vehicle badging as to not provide free advertising to the manufacturer.

UPS UK van that was involved in a road accident in Skegness, United Kingdom.

Other trucks

A UPS trailer parked in Durham, North Carolina

UPS commonly refers to its tractor-trailers as "feeders". The tractors are painted the same shade of brown as the package cars, while the company-owned trailers are painted gray. Most tractors usually tow two 28-foot (8.5 m) trailers in tandem (also known as "pups"), or a single 45, 48 or 53-foot (16 m) trailer. They have three different types of feeders — Flatbed, Drop Frame and Trailer On Flat Car (TOFC). The latter are put onto railroad cars. Tractors are usually made by International or Mack, but a few Ford, Sterling, and Freightliner tractors are in the fleet. Past makes in the fleet include Chevrolet, GMC, and Diamond REO. In keeping with the "no free advertising" the same is done with the "feeder" trucks. The make and model badges are removed from the vehicle.

At one time, UPS used electric trucks, made by White Motors, for deliveries in Manhattan, NYC. There were only a few hundred of them, but they were notable for their "spooky silence" when running.

UPS Airlines

From the launch of UPS Airlines in 1988 to today, UPS has had two color schemes for its aircraft fleet.

The first was introduced in 1988 and is still seen on some of their aircraft today as the new design is phased in. It consisted of a mostly white fuselage. A brown stripe was located on the window line (or where it would have been on its Boeing 757 and 767 freighters). The words United Parcel Service were located above the stripe on the front half of the fuselage. On the 747 aircraft, the United Parcel Service letters were much larger and were located further back. A brown vertical stabilizer featured the then-current UPS shield.

Today's color scheme was introduced alongside the new brandmark design in 2003. The brown stripe was phased out to be replaced by an arching design over the wing coming to a point on the top of the fuselage. This brown segment was trimmed by a gold outline; this is the same color gold as on the new shield. Replacing the company name on the fuselage is, in black: "Worldwide Services", with the words "synchronizing the world of commerce" underneath. The redesigned logo is featured on a brown vertical stabilizer.

Bicycles

In 2008, UPS started hiring bike delivery people in Vancouver, Washington; Portland, Salem, Corvallis, Eugene, and Medford, Oregon.[11]

Trains

UPS contracts with several railroad companies in the United States to provide intermodal transport for their cargo.

Other codes

Operating subsidiaries and alliances

ANA/UPS - All Nippon/United Parcel Deal

All Nippon Airways, a Star Alliance member, and UPS have formed a cargo alliance and code-share to transport member cargo, similarly to an airline alliance.[13][14]

Personnel structure

Larger UPS package vehicles custom made by Grumman Olson
Smaller UPS package vehicles on a Dodge Sprinter chassis
A UPS MD-11F aircraft (N276UP) taxies at Honolulu International Airport in Hawaii

UPS employs approximately 425,300 staff, with 358,400 in the U.S. and 67,300 internationally. Approximately 240,000 UPS drivers, package handlers and clerks are represented by the International Brotherhood of Teamsters. The company has had only one nationwide strike in its history, which occurred in 1997, lasting 16 days.[15]

Chief executives

System design

UPS' Parcel Network is based on a hub and spoke model. UPS operates centers that feed parcels to hubs where parcels are sorted and forwarded to their destinations. Centers typically are the point of entry for parcels and send the parcels to one or more hubs. A hub is a location where many centers send packages to be sorted and sent back out to other centers or hubs. For example, a parcel being shipped from Wilmington, North Carolina to San Francisco, California is picked up by a driver and taken to the 23rd Street center in Wilmington, where it is loaded on a trailer and driven to Raleigh, North Carolina. At Raleigh, the package would join packages from all over North Carolina and be forwarded to the Chicago Area Consolidated Hub in Hodgkins, Illinois. After arriving there, it would be loaded onto a trailer and sent by rail (trailer on flat car in most cases) to the North Bay, California hub in San Pablo, California, where it would then be forwarded to the delivery center, loaded onto the delivery vehicle, and transported to its final destination.

UPS' air network runs similarly to the ground network through a hub-and-spoke system, though air hubs are typically located at airports so packages and planes can quickly be unloaded, sorted, and loaded again. Centers feed packages to facilities at airports (called gateways), which in turn send them to an air hub to be sorted and put on another plane to a final destination gateway, and then from there to a center. For instance, a package traveling from Seattle, Washington to Atlanta, Georgia, would be loaded onto an air container at Boeing Field just south of Seattle and flown to the UPS Air Hub at Chicago Rockford International Airport in Rockford, Illinois. From there it would be sorted to a container heading to Atlanta to Hartsfield-Jackson International Airport, and taken by truck from the airport to the delivery center.

UPS Store pricing for non-UPS products

Although The UPS Stores provide UPS shipping at regular UPS rates, The UPS Stores have been sometimes criticized for providing United States Postal Service (USPS) services at prices higher than consumers would have paid for the same services directly from the postal service. The UPS Store allows individuals to ship via USPS at varying rates that are not the retail rates the post office charges, however this is viewed as more of a convenience fee (akin to paying a slightly higher price for groceries at a convenience store such as 7-11). USPS rules allow third party stores to charge extra costs that they deem necessary. Instead of waiting on longer lines in the post office, customers are able to ship a package via USPS service in a UPS Store.“I think there’s a natural assumption on the part of the consumer that if you’re sending something through the U.S. Postal Service, even when it’s from another store, you’re not paying more, and if you are paying more, it’s just a pittance,” said Tod Marks, a senior editor at Consumer Reports.[17][18]

Over the years, the UPS Stores’ own corporate press releases and website have not indicated that stores charge extra costs for services above the normal rates charged by the USPS.[19][20][21] Cash register receipts that include postal product do, however, include wording that a surcharge may have been applied.

Fees for Canadians

The normal procedure for residential customers in Canada to import goods from the U.S. by mail is relatively simple; they are required to pay 5% GST on the item in Alberta, Saskatchewan, Manitoba, and Quebec and higher rates of HST (Harmonized Sales Tax) in eastern Canada, Ontario (13% HST), and British Columbia, plus a $5 CAN handling fee collected by the Canada Border Services Agency (CBSA) on behalf of Canada Post. This applies for mailed items greater than $20 CAN and gifts less than $60 CAN in value[22]. However, this does not apply to items shipped by couriers such as UPS.

When delivering packages in Canada, UPS brokers or clears the item through the CBSA and transfers a cost to the buyer.[23] These fees are not disclosed at the time of purchase by the seller as many sellers from the U.S. are themselves unaware of this.[24][25][26][27][28][29][30]

As a result, there have been two class-action lawsuits filed against UPS by Canadians. The first one filed in October, 2006 by Robert Macfarlane, a resident of British Columbia[31] alleges that the UPS brokerage is "so harsh and adverse as to constitute an unconscionable practice."[32]

The second filed by Ryan Wright and Julia Zislin in Ontario claims "that UPS failed to obtain consumers’ consent to act as a customs broker; to disclose the existence and/or amount of the brokerage fee; and to provide consumers with the opportunity or disclose to them how to arrange for customs clearance by themselves."[33]

It is possible for the recipient to avoid these brokerage fees if the parcel is being shipped by a UPS "express" (premium) service[23], that is, another service other than UPS Standard (Ground). Fees may also be avoided if the recipient clears the parcel themselves at a CBSA office.[34]

This distinction is not limited to Canada, or to UPS. As a rule, "mail" import procedures in all countries apply only to items imported by mail, i.e., originated by the exporter's local postal authority (for Canadians, commonly USPS) for delivery by the importer's local postal authority (Canada Post); they do not apply to shipments made by courier services such as UPS, FedEx, or DHL. For example, this distinction is specifically noted by U.S. Customs and Border Protection (CBP) in its website's page on Internet purchases imported into the United States; it also warns that imports by courier may come with "higher than...expected" brokerage fees that "sometimes exceed the cost of (the) purchase", and that prepaid shipping charges on imports by courier normally do not include duties or brokerage fees.[35] (The distinction may be sharper in the U.S. because CBP normally waives duties on mail imports of up to US$200 per day, but not on courier imports of any amount. Use tax, the U.S. equivalent of GST, is collected only by the states, not by CBP or shippers.) What makes this case unique is that UPS charges a substantial brokerage fee on ground shipments to Canada, when other Canadian small-package services apparently charge nothing (UPS "express" services) or a minimal fee (Canada Post).

Fuel economy

UPS Package Car.

In 2004 UPS announced that they would save fuel by minimizing left turns. Because drivers are idle at intersections while waiting to make left turns, UPS developed software that routes the day's packages with preference to right turns. Since UPS operates a fleet of over 88,000 ground vehicles, the fuel savings are considerable. In 2005, UPS eliminated 464,000 miles (747,000 km) from its travel and saved 51,000 US gallons (190,000 l) of fuel within Washington D.C. alone.[36]

See also: Travelling salesman problem

UPS is also utilizing hybrid electric vehicles (HEV) for local deliveries only. As of May 22, 2007 the company has 50 deployed in Atlanta, Dallas, Houston, and Phoenix. The 50 HEVs are expected to cut fuel consumption by 44,000 US gallons (170,000 l) per year.[37]

Environmental record

UPS has 94,500 vehicles in operation.[38] In May 2008 UPS placed an order for 200 hybrid electric vehicles (adding to the 50 it has currently) and 300 compressed natural gas (which are 20% more fuel efficient, and add to the 800 it already has) vehicles with from Daimler Trucks North America.[39][40][41]

UPS received a "starting" rating of 39 points out of 100 totals on the environmental scorecard by the Climate Counts Group for their efforts to lessen the company's impact on the environment.[42] UPS has also been awarded the Clean Air Excellence Award by the United States Environmental Protection Agency because of the alternative fuel program they have developed.[43]

In October, 2009, UPS became the first small package carrier to offer customers the chance to buy carbon offsets to neutralize the greenhouse gas emissions generated by the transport of their packages. Although initially only available on UPS.com and to high-volume shippers, UPS hopes to roll out UPS carbon neutral to more customer groups in 2010.[44]

Facts and statistics

See also

References

  1. ↑ "United Parcel Service, Inc. - Google Finance". http://www.google.com/finance?q=NYSE:UPS. Retrieved 2010-04-04. 
  2. ↑ "Contact UPS: United States." United Parcel Service. Retrieved on May 19, 2009.
  3. ↑ "City Council Districts." City of Sandy Springs. Retrieved on July 4, 2009.
  4. ↑ "UPS Fact Sheet". http://www.pressroom.ups.com/mediakits/factsheet/0,2305,866,00.html. Retrieved 2007-08-19. 
  5. ↑ "UPS Completes Acquisition of Overnite". UPS Press Release. http://pressroom.ups.com/pressreleases/archives/archive/0,1363,4589,00.html. Retrieved 2007-08-17. 
  6. ↑ "The UPS Logo - A Brief History". UPS Pressroom. http://www.pressroom.ups.com/Fact+Sheets/The+UPS+Logo+-+A+Brief+History. Retrieved 2010-02-15. 
  7. ↑ http://www.pressroom.ups.com/pressreleases/archives/archive/0,1363,3917,00.html
  8. ↑ "UPS United Parcel Service JAMES CASEY TRANSFORMED A TINY MESSENGER SERVICE INTO THE WORLD'S LARGEST SHIPPER BY GETTING ALL WRAPPED UP IN THE DETAILS OF PACKAGE DELIVERY". CNN. 2003-04-01. http://money.cnn.com/magazines/fsb/fsb_archive/2003/04/01/341024/index.htm. 
  9. ↑ "FontShop and Unnamed Firm Reach Agreement". FSI Press Release. http://typophile.com/node/17362. Retrieved 2008-05-22. 
  10. ↑ http://www.4evriders.org/2008/11/europe-ups-orders-modec-electric-vans-for-uk-and-german-fleets/
  11. ↑ http://bikeportland.org/2008/11/14/ups-gears-up-for-holidays-with-bike-delivery/
  12. ↑ Roberts, Earl W; Stremes, David P (2009). Canadian Trackside Guide. Ottawa, Ontario: Bytown Railway Society. pp. Chapter 18 Page 27. 
  13. ↑ http://www.marketwatch.com/news/story/All-Nippon-Airways-UPS-work/story.aspx?guid={C217C64D-897F-421D-B04D-093357133808}
  14. ↑ http://www.japancorp.net/Article.Asp?Art_ID=20602
  15. ↑ "It's official: Teamsters end UPS strike". CNN. http://www.cnn.com/US/9708/20/ups.update.early/. Retrieved 2007-08-19. 
  16. ↑ "UPS Chairman & CEO Mike Eskew to Retire; Scott Davis Named as Successor". http://investor.shareholder.com/ups/news/releasedetail.cfm?ReleaseID=269116. 
  17. ↑ http://www.nytimes.com/2009/12/21/nyregion/21ups.html New York Times, In New York paying more to send US mail at UPS stores. Dec 21 2009
  18. ↑ http://www.upi.com/Business_News/2009/12/21/Often-unnoticed-rates-at-UPS/UPI-34571261406484/ UPI, Often unnoticed rates, Dec 21 2009
  19. ↑ http://www.theupsstore.com/about/111609_press_release.html UPS Store press release Nov 16 2009
  20. ↑ http://www.theupsstore.com/about/110805_press_release.html UPS Stores press release, Nov 8, 2005
  21. ↑ http://www.theupsstore.com/products/shi.html UPS Store website, shipping information, Dec 21 2009
  22. ↑ "Importing Non-Commercial Goods by Mail". CBSA. http://www.cbsa-asfc.gc.ca/E/pub/cp/rc4051/rc4051-e.html. Retrieved 2007-08-19. 
  23. ↑ 23.0 23.1 "UPS Rates for Customs Clearance into Canada". UPS. http://www.ups.com/content/ca/en/shipping/cost/zones/customs_clearance.html. Retrieved 2007-08-19. 
  24. ↑ CBC Marketplace article
  25. ↑ UPS “Brokerage fee” class-action
  26. ↑ UPS Brokerage Fee
  27. ↑ Canadian Customs: What's The Deal.
  28. ↑ Why we hate UPS
  29. ↑ UPS brokerage fees shock horror!
  30. ↑ UPS Problems -- WARNING
  31. ↑ "UPS British Columbia Class Action Lawsuit". http://www.poynerbaxter.com/UPS.htm. Retrieved 2007-08-19. 
  32. ↑ "Statement of Claim" (PDF). p. 5. http://www.poynerbaxter.com/UPS/Statement%20of%20Claim.pdf#page5. Retrieved 2007-08-19. 
  33. ↑ "Ontario Class-action Lawsuit". http://www.classaction.ca/content/actions/ups.asp. Retrieved 2007-08-19. 
  34. ↑ "Avoiding Brokerage Fees". http://www.thegatesofdawn.ca/wordpress/posts/2009/01/26/avoiding-upsfedex-brokerage-fees/. Retrieved 2009-06-22. 
  35. ↑ "Internet Purchases". CBP. http://www.cbp.gov/xp/cgov/import/infrequent_importer_info/internet_purchases.xml. Retrieved 2007-08-19. 
  36. ↑ "UPS says turning right saves time, money". Deseret News. 2006-07-16. http://findarticles.com/p/articles/mi_qn4188/is_20060716/ai_n16540534. Retrieved 2007-10-15. 
  37. ↑ "UPS "Green Fleet" Expands with 50 Hybrid Electric Vehicles". UPS Press Release. http://ups.com/pressroom/us/press_releases/press_release/0,0,4894,00.html. Retrieved 2007-08-19. 
  38. ↑ UPS Pressroom: Fact Sheet
  39. ↑ http://www.canadiandriver.com/thenews/2008/05/14/ups-orders-500-vehicles-for-“green-fleet”.htm
  40. ↑ The FINANCIAL, News That Makes Money, Business News & Multimedia - UPS Places Largest Order for “Green” Trucks Ever with Daimler Trucks North America (DTNA)
  41. ↑ UPS orders more hybrid electric trucks - East Bay Business Times
  42. ↑ Climate Counts - UPS Score
  43. ↑ UPS Environmental Achievements Recognized by EPA; UPS Improves Air Quality through Environmental Programs
  44. ↑ "Interview: Scott Wicker, VP Sustainability, UPS on UPS's Per-Package Carbon Offsets Service". CarbonOffsetsDaily.com. October 13, 2009. http://www.carbonoffsetsdaily.com/carbonindustryinterviews/interview-scott-wicker-vp-sustainability-ups-on-ups%E2%80%99s-per-package-carbon-offsets-service-19424.htm. 

Further reading

External links

United Parcel Service (UPS)
Established 1907
Founders
James E. Casey (Primary)
George Casey · Evert McCabe · Charlie Soderstrom (Partners)
CEO
D. Scott Davis
Board of Directors
F. Duane Ackerman · Michael Burns · Stuart E. Eizenstat · Michael L. Eskew · William R. Johnson · Ann Livermore · Rudy Markham · John W. Thompson · Carol Tomé
Subsidiaries
and Divisions
The UPS Store · UPS Capital · UPS Airlines · UPS Ground · UPS Racing
Related

MaxiCode · LYNX Express · Annie E. Casey Foundation · Worldport
Annual Revenue: decrease$45.3 billion USD (2009) · Employees: 408,000 (2009) · Stock Symbol: UPS · Website: ups.com · Products: Freight Forwarding Services, Logistics Services
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