1
                                               Registration No. 333-08369-01
                                               Filed Pursuant to Rule 424(b)(2)

PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED MARCH 22, 2000)

                                  $52,365,000

                                 (UPS(R) LOGO)

                          UNITED PARCEL SERVICE, INC.

                      FLOATING RATE SENIOR NOTES DUE 2051
                          ---------------------------
     We will pay interest on the notes quarterly on March 21, June 21, September
21, and December 21 of each year, beginning on September 21, 2001. Interest on
each note will be reset on the 21(st) day of every month, of each year,
beginning on July 21, 2001, based on the 1 Month LIBOR Rate less 0.45%. We will
issue the notes only in denominations of $1,000 and integral multiples of
$1,000.

     We have the option to redeem all or a portion of the notes beginning on
June 21, 2031, at the redemption prices listed in this prospectus supplement
plus accrued and unpaid interest to the redemption date.

     The holders of the notes may require us to repay all or a portion of the
notes on June 21 of every third year, beginning on June 21, 2011, at the
repayment prices listed in this prospectus supplement plus accrued and unpaid
interest to the repayment date.

     If there is a "tax event", we have the right to shorten the maturity of the
notes to the extent needed so that the interest we pay on the notes will be
deductible for United States Federal income tax purposes. On the new maturity
date, we will pay 100% of the principal amount of the notes plus accrued and
unpaid interest to the new maturity date.



                                                              PER NOTE      TOTAL
                                                              --------   -----------
                                                                   
Public Offering Price.......................................    100%     $52,365,000
Underwriting Discount.......................................      1%     $   523,650
Proceeds (before expenses) to United Parcel Service, Inc....     99%     $51,841,350


     The initial public offering price set forth above does not include accrued
interest, if any. Interest on the notes will accrue from June 29, 2001 and must
be paid by the purchaser if the notes are delivered after June 29, 2001.

     Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus supplement or the accompanying
prospectus. Any representation to the contrary is a criminal offence.

     We expect the notes will be ready for delivery in book-entry form only
through The Depository Trust Company on or about June 29, 2001.
                          ---------------------------
                               Joint Bookrunners
         UBS WARBURG                              SALOMON SMITH BARNEY
            The date of this prospectus supplement is June 26, 2001.
   2

                               TABLE OF CONTENTS

                             PROSPECTUS SUPPLEMENT



                                                              PAGE
                                                              ----
                                                           
The Company.................................................   S-1
Ratio of Earnings to Fixed Charges..........................   S-1
Description of the Notes....................................   S-1
  General...................................................   S-1
  Interest..................................................   S-2
  Optional Redemption.......................................   S-3
  Repayment at Option of Holder.............................   S-3
  Conditional Right to Shorten Maturity.....................   S-4
  Notes Used as Qualified Replacement Property..............   S-5
Book-Entry System...........................................   S-5
  The Depository Trust Company..............................   S-6
  Book-Entry Format.........................................   S-7
  Certificated Notes........................................   S-7
Underwriting................................................   S-9
Validity of the Notes.......................................   S-9


                                   PROSPECTUS



                                                              PAGE
                                                              ----
                                                           
Where You Can Find More Information.........................     2
The Company.................................................     3
Ratio of Earnings to Fixed Charges..........................     3
Use of Proceeds.............................................     3
Description of Debt Securities..............................     4
Plan of Distribution........................................    18
Validity of Offered Debt Securities.........................    19
Experts.....................................................    19

   3

                                  THE COMPANY

     We are the world's largest express carrier, the world's largest package
delivery company and a leading global provider of specialized transportation and
logistics services. We deliver packages each business day for approximately 1.8
million shipping customers to six million consignees. In 2000, we delivered an
average of more than 13.6 million pieces per day worldwide, generating revenues
of over $29.7 billion.

     We focus on the movement of goods, information and funds, and seek to
position ourself as the world's premier enabler of global commerce. Our primary
business is the time-definite delivery of packages and documents throughout the
United States and in over 200 other countries and territories. In addition, we
provide logistics services, including integrated supply chain management, for
major companies worldwide. We are the industry leader in the delivery of goods
purchased over the Internet.

     The address and telephone number of our principal executive offices are 55
Glenlake Parkway, N.E., Atlanta, Georgia 30328, (404) 828-6000.

     Unless the context requires otherwise, references in this prospectus
supplement to "UPS", "we", "us", and "our" refer to United Parcel Service, Inc.
and its subsidiaries.

                       RATIO OF EARNINGS TO FIXED CHARGES

     The following table sets forth the ratio of earnings to fixed charges for
our company, including our subsidiaries, on a consolidated basis.



                                                                                       THREE MONTHS
                                                                                          ENDED
                                                        YEAR ENDED DECEMBER 31,         MARCH 31,
                                                    --------------------------------   ------------
                                                    1996   1997   1998   1999   2000   2000    2001
                                                    ----   ----   ----   ----   ----   ----    ----
                                                                          
Ratio of earnings to fixed charges................  8.2    4.9    8.9    6.7    15.3   10.1     7.9


     For purposes of calculating the ratio of earnings to fixed charges,
earnings is defined as income before income taxes and fixed charges (excluding
capitalized interest). Fixed charges include interest (whether capitalized or
expensed), amortization of debt expense and any discount or premium relating to
any indebtedness (whether capitalized or expensed) and the portion of rent
expense considered to represent interest.

                            DESCRIPTION OF THE NOTES

     The following description of the terms of the notes supplements the general
terms and provisions of the debt securities contained in the accompanying
prospectus. If there are any inconsistencies between the information in this
section and the information in the prospectus, the information in this section
controls.

GENERAL

     The notes:

     - will be limited to $52,365,000 aggregate principal amount and will be
       issued under the indenture (as defined below);

     - will mature on June 21, 2051;

     - will not be entitled to any sinking fund;

     - will be subject to defeasance and covenant defeasance;

     - will be issued only in registered, book-entry form, in denominations of
       $1,000 and any integral multiple thereof; and

                                       S-1
   4

     - will be repayable at the option of the holders and redeemable at our
       option prior to maturity on the terms and conditions described below.

     When we refer to the indenture, we are referring to the indenture dated as
of January 26, 1999, as supplemented by the First Supplemental Indenture
thereto, dated as of March 27, 2000, under which we will issue the notes. The
indenture does not, and the notes will not, limit the amount of indebtedness
that we (or our subsidiaries) may incur or issue, and do not contain any
financial or similar restrictions on us, except as described in the prospectus
under the caption "Description of Debt Securities -- Covenants."

INTEREST

     The notes will bear interest at the "1 Month LIBOR Rate" (as defined below)
less 0.45%. Interest will accrue from June 29, 2001 and is payable quarterly in
arrears on March 21, June 21, September 21, and December 21 of each year (these
dates are called "interest payment dates"), beginning on September 21, 2001;
provided that if any such date is not a business day, payment of interest
accrued through the applicable interest payment date will be made on the first
following business day. The 1 Month LIBOR Rate will be reset monthly on the
21(st) day of every month, beginning on July 21, 2001 (each of these dates is
called an "interest reset date"). Interest is payable from the date of issue of
the notes or from the most recent date to which interest on such note has been
paid or duly provided for, until the principal amount of the note is paid or
duly made available for payment. We will pay interest to the person in whose
name the note (or one or more predecessor notes) is registered at the close of
business 15 calendar days before the interest payment date. The initial interest
rate on the notes will be 3.30125%.

     As used in this prospectus supplement, business day means, with respect to
any note, any day, other than a Saturday or Sunday, that is neither a legal
holiday nor a day on which commercial banks are authorized or required by law,
regulation or executive order to close in The City of New York.

     "1 Month LIBOR Rate" means the rate for deposits in U.S. dollars for the
1-month period which appears on "Telerate Page 3750" at approximately 11:00
a.m., London time, on the second London banking day prior to the applicable
interest reset date; provided that the interest rate in effect from the date of
issue to the first interest reset date will be based on the 1 Month LIBOR Rate
on the second London banking day prior to the date of issue. If this rate does
not appear on the Telerate Page 3750, the calculation agent will determine the
rate on the basis of the rates at which deposits in U.S. dollars are offered by
four major banks in the London interbank market (selected by the calculation
agent) at approximately 11:00 a.m., London time, on the second London banking
day prior to the applicable interest reset date to prime banks in the London
interbank market for a period of one month commencing on that interest reset
date and in a principal amount equal to an amount not less than $1,000,000 that
is representative for a single transaction in such market at such time. In such
case, the calculation agent will request the principal London office of each of
the aforesaid major banks to provide a quotation of such rate. If at least two
such quotations are provided, the rate for that interest reset date will be the
arithmetic mean of the quotations, and, if fewer than two quotations are
provided as requested, the rate for that interest reset date will be the
arithmetic mean of the rates quoted by major banks in The City of New York,
selected by the calculation agent, at approximately 11:00 a.m., New York City
time, on the second London banking day prior to the applicable interest reset
date for loans in U.S. dollars to leading European banks for a period of one
month commencing on that interest reset date and in a principal amount equal to
an amount not less than $1,000,000 that is representative for a single
transaction in such market at such time. A London banking day is any day in
which dealings in U.S. dollars are transacted in the London interbank market.

     "Telerate Page 3750" means the display page so designated on the Telerate
Service (or such other page as may replace such page on that service for the
purpose of displaying London interbank offered rates of major banks). The
interest rate on the notes will in no event be higher than the maximum rate
permitted by New York law as the same may be modified by United States law of
general application.

     The calculation agent will, upon the request of the holder of any note,
provide the interest rate then in effect. The calculation agent is Citibank,
N.A. until such time as we appoint a successor calculation agent.
                                       S-2
   5

All calculations made by the calculation agent in the absence of manifest error
shall be conclusive for all purposes and binding on us and the holders of the
notes. We may appoint a successor calculation agent with the written consent of
the trustee.

     All percentages resulting from any calculation of the interest rate with
respect to the notes will be rounded, if necessary, to the nearest one-hundred
thousandth of a percentage point, with five one-millionths of a percentage point
rounded upwards (e.g., 9.876545% (or .0987654) being rounded to 9.87655% (or
 .0987655) and 9.876544% (or .09876544) being rounded to 9.87654% (or .0987654)),
and all dollar amounts in or resulting from any such calculation will be rounded
to the nearest cent (with one-half cent being rounded upwards).

     Interest on the notes will be computed and paid on the basis of a 360-day
year and the actual number of days in each monthly interest payment period.

OPTIONAL REDEMPTION

     The notes may be redeemed at any time after June 21, 2031, at our option,
in whole or in part, in amounts of $1,000 or an integral multiple thereof at the
following redemption prices (in each case expressed as a percentage of the
principal amount), if redeemed during the 12-month period beginning on June 21
of any of the following years:



YEAR                                                       REDEMPTION PRICE
----                                                       ----------------
                                                        
2031.....................................................       105.00%
2032.....................................................       104.50%
2033.....................................................       104.00%
2034.....................................................       103.50%
2035.....................................................       103.00%
2036.....................................................       102.50%
2037.....................................................       102.00%
2038.....................................................       101.50%
2039.....................................................       101.00%
2040.....................................................       100.50%


and thereafter at 100% of the principal amount, in each case, together with
accrued and unpaid interest, if any, to the redemption date (subject to the
rights of holders of record on relevant record dates to receive interest due on
an interest payment date).

     We must mail notice of any redemption at least 30 days but not more than 60
days before the redemption date to each holder of notes to be redeemed. Unless
we default in payment of the redemption price, on and after the redemption date,
interest will cease to accrue on the notes or portions thereof called for
redemption.

     In the event of any redemption of less than all the outstanding notes, the
particular notes (or portions thereof in integral multiples of $1,000) to be
redeemed shall be selected by the trustee by such method as the trustee
considers fair and appropriate.

REPAYMENT AT OPTION OF HOLDER

     The notes will be repayable at the option of the holder thereof, in whole
or in part, on the repayment dates and at the repayment prices (in each case
expressed as a percentage of the principal amount) set forth in the following
table:



DATE                                                          REPAYMENT PRICE
----                                                          ---------------
                                                           
June 21, 2011...............................................       99.00%
June 21, 2014...............................................       99.25%
June 21, 2017...............................................       99.50%
June 21, 2020...............................................       99.75%


                                       S-3
   6

and on June 21 of every third year thereafter at 100% of the principal amount,
through and including June 21, 2050, in each case together with accrued and
unpaid interest, if any, to the repayment date (subject to the rights of holders
of record on relevant record dates to receive interest due on an interest
payment date).

     In order for a note to be repaid, the paying agent must receive, at least
30 but not more than 60 calendar days prior to the optional repayment date, (1)
the note with the form entitled "Option to Elect Repayment" on the reverse of
the note duly completed or (2) a telegram, facsimile transmission or a letter
from a member of a national securities exchange or a member of the National
Association of Securities Dealers, Inc. or a commercial bank or trust company in
the United States which must set forth:

     - the name of the holder of the note;

     - the principal amount of the note;

     - principal amount of the note to be repaid;

     - the certificate number or a description of the tenor and terms of the
       note;

     - a statement that the option to elect repayment is being exercised
       thereby; and

     - a guarantee that the note to be repaid will be transferred to the DTC
       account of the paying agent not later than the fifth business day after
       the date of such telegram, facsimile transmission or letter.

     The repayment option may be exercised by the holder of a note for less than
the entire principal amount of the note but, in that event, the principal amount
of the note remaining outstanding after repayment must be in an authorized
denomination.

CONDITIONAL RIGHT TO SHORTEN MATURITY

     We intend to deduct interest paid on the notes for United States Federal
income tax purposes. However, there have been proposed tax law changes over the
past several years that, among other things, would have prohibited an issuer
from deducting interest payments on debt instruments with a maturity of more
than 40 years. While none of these proposals has become law, there can be no
assurance that similar legislation affecting our ability to deduct interest paid
on the notes will not be enacted in the future or that any such legislation
would not have a retroactive effective date. As a result, there can be no
assurance that a Tax Event (as defined below) will not occur.

     Upon the occurrence of a Tax Event, we, without the consent of the holders
of the notes, will have the right to shorten the maturity of the notes to the
minimum extent required, in the opinion of nationally recognized independent tax
counsel, such that, after the shortening of the maturity, interest paid on the
notes will be deductible for United States Federal income tax purposes or, if
such counsel is unable to opine definitively as to such a minimum period, the
minimum extent so required to maintain the Company's interest deduction to the
extent deductible under current law as determined in good faith by our Board of
Directors, after receipt of an opinion of such counsel regarding the applicable
legal standards. In such case, the amount payable on such notes on such new
maturity date will be equal to 100% of the principal amount of such notes plus
interest accrued on such notes to the date such notes mature on such new
maturity date. There can be no assurance that we would not exercise our right to
shorten the maturity of the notes on the occurrence of such a Tax Event or as to
the period by which such maturity would be shortened. In the event that we elect
to exercise our right to shorten the maturity of the notes on the occurrence of
a Tax Event, we will mail a notice to each holder of notes by first-class mail
not more than 60 days after the occurrence of such Tax Event, stating the new
maturity date of the notes. Such notice shall be effective immediately upon
mailing.

     We believe that the notes should constitute indebtedness for United States
Federal income tax purposes under current law and, in that case, an exercise of
our right to shorten the maturity of the notes should not be a taxable event to
holders for such purposes. Prospective investors should be aware, however, that
our exercise of our right to shorten the maturity of the notes will be a taxable
event to holders for

                                       S-4
   7

United States Federal income tax purposes if the notes are treated as equity for
United States Federal income tax purposes before the maturity is shortened,
assuming that the notes of shortened maturity are treated as debt for such
purposes.

     "Tax Event" means that we shall have received an opinion of a nationally
recognized independent tax counsel to the effect that, as a result of one of the
following events occurring on or after June 29, 2001, there is more than an
insubstantial increase in the risk that interest paid by us on the notes is not,
or will not be, deductible, in whole or in part, by us for United States Federal
income tax purposes:

     - any amendment to, clarification of, or change (including any announced
       prospective amendment, clarification or change) in any law, or any
       regulation thereunder, of the United States,

     - any judicial decision, official administrative pronouncement, ruling,
       regulatory procedure, regulation, notice or announcement, including any
       notice or announcement of intent to adopt or promulgate any ruling,
       regulatory procedure or regulation (any of the foregoing, an
       "Administrative or Judicial Action"), or

     - any amendment to, clarification of, or change in any official position
       with respect to, or any interpretation of, an Administrative or Judicial
       Action or a law or regulation of the United States that differs from the
       theretofore generally accepted position or interpretation.

NOTES USED AS QUALIFIED REPLACEMENT PROPERTY

     Prospective investors seeking to treat the notes as "qualified replacement
property" for purposes of section 1042 of the Internal Revenue Code of 1986, as
amended (the "Code"), should be aware that section 1042 requires the issuer to
meet certain requirements in order for the notes to constitute qualified
replacement property. In general, qualified replacement property is a security
issued by a domestic corporation that did not, for the taxable year preceding
the taxable year in which such security was purchased, have "passive investment
income" in excess of 25 percent of the gross receipts of such corporation for
such preceding taxable year (the "passive income test"). For purposes of the
passive income test, where the issuing corporation is in control of one or more
corporations, all such corporations are treated as one corporation (the
"affiliated group") for the purposes of computing the amount of passive
investment income for purposes of section 1042.

     We believe that less than 25 percent of our affiliated group's gross
receipts is passive investment income for the taxable year ended December 31,
2000. In making this determination, we have made certain assumptions and used
procedures which we believe are reasonable. We cannot give any assurance as to
whether we will continue to meet the passive income test. It is, in addition,
possible that the IRS may disagree with the manner in which we have calculated
our affiliated group's gross receipts (including the characterization thereof)
and passive investment income and the conclusions reached herein. Prospective
purchasers of the notes should consult with their own tax advisors with respect
to these and other tax matters relating to the notes.

     The notes are a new issue of securities with no established trading market.
No assurance can be given as to whether a trading market for the notes will
develop or as to the liquidity of a trading market for the notes. The
availability and liquidity of a trading market for the notes will also be
affected by the degree to which purchasers treat the notes as qualified
replacement property.

                               BOOK-ENTRY SYSTEM

     We have obtained the information in this section concerning The Depository
Trust Company ("DTC") and its book-entry system and procedures from sources that
we believe to be reliable, but we take no responsibility for the accuracy of
this information.

     The notes initially will be represented by one or more fully registered
global notes. Each global note will be deposited with, or on behalf of, DTC or
any successor thereto and registered in the name of Cede & Co. (DTC's nominee).
                                       S-5
   8

     You may hold your interests in the global notes in the United States
through DTC, either as a participant in such system or indirectly through
organizations which are participants in such system. So long as DTC or its
nominee is the registered owner of the global securities representing the notes,
DTC or such nominee will be considered the sole owner and holder of the notes
for all purposes of the notes and the indenture. Except as provided below,
owners of beneficial interests in the notes will not be entitled to have the
notes registered in their names, will not receive or be entitled to receive
physical delivery of the notes in definitive form and will not be considered the
owners or holders of the notes under the indenture, including for purposes of
receiving any reports that we or the trustee deliver pursuant to the indenture.
Accordingly, each person owning a beneficial interest in a note must rely on the
procedures of DTC or its nominee and, if such person is not a participant, on
the procedures of the participant through which such person owns its interest,
in order to exercise any rights of a holder of notes.

     Unless and until we issue the notes in fully certificated form under the
limited circumstances described below under the heading "-- Certificated Notes":

     - you will not be entitled to receive physical delivery of a certificate
       representing your interest in the notes;

     - all references in this prospectus supplement or in the accompanying
       prospectus to actions by holders will refer to actions taken by DTC upon
       instructions from its direct participants; and

     - all references in this prospectus supplement or the accompanying
       prospectus to payments and notices to holders will refer to payments and
       notices to DTC or Cede & Co., as the registered holder of the notes, for
       distribution to you in accordance with DTC procedures.

THE DEPOSITORY TRUST COMPANY

     DTC will act as securities depositary for the notes. The notes will be
issued as fully registered notes registered in the name of Cede & Co. DTC is:

     - a limited-purpose trust company organized under the New York Banking Law;

     - a "banking organization" under the New York Banking Law;

     - a member of the Federal Reserve System;

     - a "clearing corporation" under the New York Uniform Commercial Code; and

     - a "clearing agency" registered under the provision of Section 17A of the
       Securities Exchange Act.

     DTC holds securities that its direct participants deposit with DTC. DTC
also facilitates the settlement among direct participants of securities
transactions, such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in direct participants' accounts,
thereby eliminating the need for physical movement of securities certificates.

     Direct participants of DTC include securities brokers and dealers
(including underwriters), banks, trust companies, clearing corporations, and
certain other organizations. DTC is owned by a number of its direct participants
and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and
the National Association of Securities Dealers, Inc. Indirect participants of
DTC, such as securities brokers and dealers, banks and trust companies, can also
access the DTC system if they maintain a custodial relationship with a direct
participant.

     If you are not a direct participant or an indirect participant and you wish
to purchase, sell or otherwise transfer ownership of, or other interests in,
notes, you must do so through a direct participant or an indirect participant.
DTC agrees with and represents to DTC participants that it will administer its
book-entry system in accordance with its rules and by-laws and requirements of
law. The Securities and Exchange Commission has on file a set of the rules
applicable to DTC and its direct participants.

     Purchasers of notes under DTC's system must be made by or through direct
participants, which will receive a credit for the notes on DTC's records. The
ownership interest of each beneficial owner is in turn
                                       S-6
   9

to be recorded on the records of direct participants and indirect participants.
Beneficial owners will not receive written confirmation from DTC of their
purchase, but beneficial owners are expected to receive written confirmations
providing details of the transaction, as well as periodic statements of their
holdings, from the participants or indirect participants through which such
beneficial owners entered into the transaction. Transfers of ownership interests
in the notes are to be accomplished by entries made on the books of participants
acting on behalf of beneficial owners. Beneficial owners will not receive
physical delivery of certificates representing their ownership interests in
notes, except as provided below in "-- Certificated Notes."

     To facilitate subsequent transfers, all notes deposited with DTC are
registered in the name of DTC's nominee, Cede & Co. The deposit of notes with
DTC and their registration in the name of Cede & Co. has no effect on beneficial
ownership. DTC has no knowledge of the actual beneficial owners of the notes.
DTC's records reflect only the identity of the direct participants to whose
accounts such notes are credited, which may or may not be the beneficial owners.
The participants will remain responsible for keeping account of their holdings
on behalf of their customers.

     Conveyance of notices and other communications by DTC to direct
participants, by direct participants to indirect participants and by direct
participants and indirect participants to beneficial owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.

BOOK-ENTRY FORMAT

     Under the book-entry format, the trustee will pay interest or principal
payments to Cede & Co., as nominee of DTC. DTC will forward the payment to the
direct participants, who will then forward the payment to the indirect
participants or to you as the beneficial owner. You may experience some delay in
receiving your payments under this system.

     DTC is required to make book-entry transfers on behalf of its direct
participants and is required to receive and transmit payments of principal,
premium, if any, and interest on the notes. Any direct participant or indirect
participant with which you have an account is similarly required to make
book-entry transfers and to receive and transmit payments with respect to notes
on your behalf. We and the trustee have no responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in the notes or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.

     The trustee will not recognize you as a holder under the indenture, and you
can only exercise the rights of a holder indirectly through DTC and its direct
participants. DTC has advised us that it will only take action regarding a note
if one or more of the direct participants to whom the note is credited direct
DTC to take such action. DTC can only act on behalf of its direct participants.
Your ability to pledge notes to nondirect participants, and to take other
actions, may be limited because you will not possess a physical certificate that
represents your notes.

CERTIFICATED NOTES

     Unless and until they are exchanged, in whole or in part, for notes in
definitive form in accordance with the terms of the notes, the notes may not be
transferred except as a whole by DTC to a nominee of DTC; as a whole by a
nominee of DTC to DTC or another nominee of DTC; or as a whole by DTC or nominee
of DTC to a successor of DTC or a nominee of such successor.

     We will issue notes to you or your nominees, in fully certificated
registered form, rather than to DTC or its nominees, only if:

     - we advise the trustee in writing that DTC is no longer willing or able to
       discharge its responsibilities properly or that DTC is no longer a
       registered clearing agency under the Securities Exchange Act, and the
       trustee or we are unable to locate a qualified successor within 90 days;

                                       S-7
   10

     - an event of default has occurred and is continuing under the indenture;
       or

     - we, at our option, elect to terminate use of the book-entry system
       through DTC.

     If any of the three above events occurs, DTC is required to notify all
direct participants that notes in fully certificated registered form are
available through DTC. DTC will then surrender the global note representing the
notes along with instructions for re-registration. The trustee will re-issue the
notes in full certificated registered form and will recognize the registered
holders of the certificated notes as holders under the indenture.

                                       S-8
   11

                                  UNDERWRITING

     We have entered into an underwriting agreement and terms agreement with
respect to the notes with the underwriters listed below. Subject to certain
conditions, the underwriters have agreed to purchase the principal amount of
notes indicated in the following table:



UNDERWRITERS                                           PRINCIPAL AMOUNT OF NOTES
------------                                           -------------------------
                                                    
UBS Warburg LLC......................................         $27,365,000
Salomon Smith Barney Inc.............................          25,000,000
                                                              -----------
          Total......................................         $52,365,000
                                                              ===========


     Notes sold by the underwriters to the public will initially be offered at
the initial public offering price set forth on the cover of this prospect
supplement. If all the notes are not sold at the initial offering price, the
underwriters may change the offering price and the other selling terms.

     The notes are a new issue of securities with no established trading market.
We have been advised by the underwriters that the underwriters intend to make a
market in the notes, but they are not obligated to do so and may discontinue
market making at any time without notice. No assurance can be given as to the
liquidity of the trading market for the notes.

     In connection with the offering, the underwriters may purchase and sell the
notes in the open market. These transactions may include short sales,
stabilizing transactions and purchases to cover positions created by short
sales. Short sales involve the sale by the underwriters of greater aggregate
principal amount of notes than they are required to purchase in the offering.
Stabilizing transactions consist of certain bids or purchases made for the
purpose of preventing or retarding a decline in the market price of the notes
while the offering is in process.

     These activities by the underwriters may stabilize, maintain or otherwise
affect the market price of the notes. As a result, the price of the notes may be
higher than the price that otherwise might exist in the open market. If these
activities are commenced, they may be discontinued by the underwriters at any
time. These transactions may be effected in the over-the-counter market or
otherwise.

     We estimate that the total expenses of the offering, excluding underwriter
discounts and commissions, will be approximately $50,000. We have agreed to
indemnify the underwriters against certain liabilities, including liabilities
under the Securities Act of 1933.

     UBS Warburg LLC and Salomon Smith Barney Inc. and their affiliates have in
the past and may in the future provide us with financial advisory and other
services.

                             VALIDITY OF THE NOTES

     The validity of the notes will be passed upon for us by King & Spalding,
New York, New York, and for the underwriters by Gibson, Dunn & Crutcher LLP, New
York, New York.

                                       S-9
   12

                                   PROSPECTUS

                                 (UPS(R) LOGO)

                            (United Parcel Service)
                          UNITED PARCEL SERVICE, INC.
                                 $2,000,000,000

                                DEBT SECURITIES
                             ---------------------

     This prospectus relates to the issuance of senior unsecured debt securities
by United Parcel Service, Inc. pursuant to our debt shelf registration
statement. Under this shelf registration statement, we may issue debt securities
from time to time as described in this prospectus.

ISSUANCE OF DEBT SECURITIES:

     -     may be offered from time to time;

     -     may be denominated in U.S. dollars or other currencies or currency
           units;

     -     prices and terms will be determined at the time of sale; and

     -     the total aggregate principal amount (or, in the case of debt
           securities issued at a discount, the initial offering price) will not
           exceed US $2,000,000,000 (or the equivalent in foreign currencies or
           currency units).

FORMS THAT DEBT SECURITIES MAY TAKE:

     -     registered form; or

     -     global form.

     This prospectus is accompanied by a prospectus supplement that includes
additional information regarding an issuance of our debt securities. Sales of
our debt securities may not be consummated without both this prospectus and a
prospectus supplement.

THE PROSPECTUS SUPPLEMENT RELATING TO ANY ISSUANCE OF DEBT SECURITIES WILL
DESCRIBE THE TERMS OF THE SECURITIES BEING ISSUED, TYPICALLY INCLUDING THE
FOLLOWING:

     -     aggregate principal amount of the series of debt securities;

     -     denominations;

     -     maturity;

     -     interest rate;

     -     time of interest payments;

     -     any terms for redemption;

     -     any terms for sinking fund payments;

     -     any listing on a national securities exchange;

     -     initial public offering price;

     -     names of any underwriters or agents;

     -     terms of any underwriting arrangements;

     -     amounts to be purchased by underwriters or agents; and

     -     commissions or discounts of or to underwriters or agents.

                             ---------------------

     NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE DEBT SECURITIES OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

                 THE DATE OF THIS PROSPECTUS IS MARCH 22, 2000.
   13

     NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS OR
ANY PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY US OR ANY
UNDERWRITER OR AGENT. THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT DO NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY AND THEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM
IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF
THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER AND
THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
INFORMATION HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THEIR
RESPECTIVE DATES.
                             ---------------------

                      WHERE YOU CAN FIND MORE INFORMATION

     We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy materials that we have filed
with the SEC, including the registration statement of which this prospectus is a
part, at the following SEC reference rooms:


                                          
 450 Fifth Street,      7 World Trade Center    500 West Madison Street
         N.W.
     Room 1024               Suite 1300               Suite 1400
Washington, DC 20549  New York, New York 10048  Chicago, Illinois 60661


Please telephone the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. The SEC also maintains an internet site at http://www.sec.gov
that contains reports, proxy statements and other information regarding issuers
that file electronically with the SEC. You may find our reports, proxy
statements and other information at this SEC website.

     In addition, you can obtain our reports and proxy statements and other
information about us at the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York 10005.

     The SEC allows us to "incorporate by reference" into this document the
information that we file with it. This means that we can disclose important
information by referring you to those documents. The information incorporated by
reference is an important part of this prospectus and the accompanying
prospectus supplement, and information in documents that we file after the date
of this prospectus and before the termination of the offering will automatically
update information in this prospectus and the accompanying prospectus
supplement. We succeeded to UPS of America following a statutory merger that
became effective on November 15, 1999.

     We incorporate by reference into this prospectus:

     -     our current report on Form 8-K filed with the SEC on February 23,
           2000; and

     -     any future filings we make with the SEC under Sections 13(a), 13(c),
           14 or 15(d) of the Securities Exchange Act of 1934, until we sell all
           of the securities offered by this prospectus and the accompanying
           prospectus supplement.

     We also incorporate by reference into this prospectus and adopt as our own
the following:

     -     UPS of America's annual report on Form 10-K for the year ended
           December 31, 1998; and

     -     UPS of America's quarterly reports on Form 10-Q for the fiscal
           quarters ended March 31, 1999, June 30, 1999 and September 30, 1999.

     We will provide, without charge, to each person to whom a copy of this
prospectus is delivered, upon written or oral request, a copy of any and all of
the documents incorporated by reference in this prospectus, other than the
exhibits to such documents, unless such exhibits are specifically incorporated
by reference into the documents that this prospectus incorporates. Requests for
copies of such documents should be directed to United Parcel Service, Inc., 55
Glenlake Parkway, N.E., Atlanta, Georgia, 30328, attn: Corporate Secretary,
telephone number (404) 828-6000.
                             ---------------------
                                        2
   14

     Unless otherwise indicated, currency amounts in this prospectus and any
prospectus supplement are stated in United States dollars ("$," "dollars," "U.S.
dollars," or "U.S. $1").

                             ---------------------

                                  THE COMPANY

     We are the world's largest express carrier, the world's largest package
delivery company and a leading global provider of specialized transportation and
logistics services. We deliver packages each business day for 1.7 million
shipping customers to six million consignees. In 1999, we delivered an average
of more than 12.92 million pieces per day worldwide, generating revenues of over
$27 billion.

     Our primary business is the delivery of packages and documents throughout
the United States and in over 200 other countries and territories. In addition,
we provide logistics services, including comprehensive management of supply
chains, for major companies worldwide. We are the industry leader in the
delivery of goods purchased over the Internet. We seek to position ourselves as
an indispensable branded component of e-commerce and to focus on the movement of
goods, information and funds.

     We consummated an initial public offering of our class B common stock in
November 1999. Immediately before the consummation of the initial public
offering, we consummated a merger whereby UPS of America became our direct
wholly owned subsidiary. The issuance of these debt securities is being made
utilizing a shelf registration statement originally filed with the Securities
and Exchange Commission by UPS of America. We have assumed and adopted that
registration statement and will be the issuer of any debt securities offered
pursuant to the shelf registration statement. Our class B common stock is listed
on the New York Stock Exchange.

     When used in this prospectus, unless the context requires otherwise, the
terms "United Parcel Service, Inc.", "UPS", "we", "us", and "our" refer to
United Parcel Service, Inc., a Delaware corporation, and "United Parcel Service
of America, Inc." and "UPS of America" refer to United Parcel Service of
America, Inc., a Delaware corporation and direct wholly owned subsidiary of
United Parcel Service, Inc.

     The address and telephone number of our principal executive offices are 55
Glenlake Parkway, N.E., Atlanta, Georgia 30328, (404) 828-6000.

                       RATIO OF EARNINGS TO FIXED CHARGES



                                                                                           NINE MONTHS
                                                                                              ENDED
                                                           YEAR ENDED DECEMBER 31,        SEPTEMBER 30,
                                                       --------------------------------   --------------
                                                       1995   1996   1997   1998   1999   1998     1999
                                                       ----   ----   ----   ----   ----   -----    -----
                                                                              
Ratio of Earnings to Fixed Charges (1)...............  7.6    8.2    4.9    8.9    6.7     8.7      4.7


---------------
(1) For purposes of calculating the ratio of earnings to fixed charges, earnings
    is defined as income before income taxes and fixed charges (excluding
    capitalized interest). Fixed charges include interest (whether capitalized
    or expensed), amortization of debt expense and any discount or premium
    relating to any indebtedness (whether capitalized or expensed) and the
    portion of rent expense considered to represent interest.

                                USE OF PROCEEDS

     Unless otherwise stated in a prospectus supplement, the net proceeds from
the sale of the debt securities offered under this prospectus and a related
prospectus supplement will be used for general corporate purposes, including
UPS's working capital needs, the funding of investments in, or extensions of
credit to, our operating subsidiaries, possible acquisitions and investments in
joint ventures and the possible

                                        3
   15

reduction of outstanding indebtedness. Pending any of these uses, we may
temporarily invest the net proceeds in investment grade securities.

                         DESCRIPTION OF DEBT SECURITIES

     The debt securities are to be issued under an indenture dated as of January
26, 1999, between UPS of America and Citibank, N.A., which acts as trustee,
which indenture we assumed pursuant to a supplemental indenture. In this
prospectus "indenture" will refer to the indenture and the supplemental
indenture. A copy of the indenture is filed as an exhibit to the registration
statement of which this prospectus is a part. The indenture and its associated
documents contain the full legal text of the matters described in this section.
The indenture and the debt securities are governed by New York law. A copy of
the indenture may be obtained from us as described under "Where You Can Find
More Information" on page 2.

     This section summarizes the material terms of the debt securities that may
be issued under this debt program. Because this section is a summary, it does
not describe every aspect of the debt securities. This summary is subject to and
qualified in its entirety by reference to all the provisions of the indenture,
including definitions of terms used in the indenture. In this summary, we
describe the meaning for only the more important terms. We also include
references in parentheses to sections of the indenture. Whenever we refer to
particular sections or defined terms of the indenture in this prospectus or in a
prospectus supplement, the sections or defined terms are incorporated by
reference in this prospectus or in the prospectus supplement. You must look to
the indenture for the most complete description of what we describe in summary
form in this prospectus.

     This summary also is subject to and qualified by reference to the
description of the particular terms of the debt securities described in the
prospectus supplement. The prospectus supplement relating to each series of debt
securities will be attached to the front of this prospectus. There also may be a
further prospectus supplement, know as a pricing supplement, which contains the
precise terms of debt securities you are offered.

     The term "Securities," as used under this caption, refers to all Securities
issued under the indenture, including the debt securities.

GENERAL

     The indenture provides that Securities in separate series may be issued
from time to time, without limitation as to aggregate principal amount. We may
specify a maximum aggregate principal amount for the Securities of any series.
(Section 3.01) The Securities are to have terms and provisions that are not
inconsistent with the indenture, including terms as to maturity, principal and
interest as we may determine. The Securities will be unsecured obligations and
will rank on a parity with all of our other unsecured and unsubordinated
indebtedness. The provisions of the indenture described below provide us with
the ability, in addition to the ability to issue Securities with terms different
from those of Securities previously issued, to "reopen" a previous issue of a
series of Securities and issue additional Securities of that series.

     The applicable prospectus supplement will set forth the price or prices at
which the Securities to be offered will be issued and will describe the
following terms, as applicable, of the Securities:

          (a)  the title of the Securities of the series;

          (b)  any limit upon the aggregate principal amount of the Securities
     of the series that may be authenticated and delivered under the indenture;

          (c)  the person or entity to whom any interest on the Securities of
     the series will be payable;

          (d)  the date or dates on which the principal, premium, if any, or
     other form or type of consideration to be paid upon maturity on any
     Securities of the series will be payable;

                                        4
   16

          (e)  the rate or rates at which any Securities of the series will bear
     interest, if any, or any method by which the rate or rates will be
     determined, the date or dates from which any interest will accrue, the
     interest payment dates on which any interest will be payable and the record
     date for any interest payable on any interest payment date;

          (f)  the place or places where the principal, premium, if any,
     interest or other form or type of consideration to be paid upon maturity on
     any Securities of the series will be payable;

          (g)  the period or periods within which, the price or prices at which
     and the terms and conditions upon which any Securities of the series may be
     redeemed, in whole or in part, at our option and, if other than by a
     resolution by our Board of Directors or its Executive Committee, the manner
     in which any election by us to redeem the Securities will be evidenced;

          (h)  our obligation, if any, to redeem or purchase any Securities of
     the series pursuant to any sinking fund or analogous provisions or at the
     option of the Holder of the Securities, and the period or periods within
     which, the price or prices at which and the terms and conditions upon which
     any Securities of the series will be redeemed or purchased, in whole or in
     part, pursuant to any obligation and any provisions for the remarketing of
     any Securities;

          (i)  if other than denominations of $1,000 and any integral multiple
     of $1,000, the denominations in which any Securities of the series will be
     issuable;

          (j)  if the amount of principal of or any premium or interest on any
     Securities of the series may be determined with reference to an index,
     formula or other method, the manner in which these amounts will be
     determined;

          (k)  if other than the currency of the United States of America, the
     currency, currencies or composite currencies in which the principal of or
     any premium or interest on any Securities of the series will be payable and
     the manner of determining the equivalent in the currency of the United
     States of America for any purpose;

          (l)  if the principal of or any premium or interest on any Securities
     of the series is to be payable, at our election or the election of the
     Holder of the Securities, in one or more currencies or composite currencies
     other than that or those in which Securities are stated to be payable, the
     currency, currencies or composite currencies in which the principal of or
     interest on Securities as to which an election is made will be payable, the
     periods within which and the terms and conditions upon which an election is
     to be made and the amount so payable, or the manner in which the amount
     will be determined;

          (m)  if other than the entire principal amount of any Securities, the
     portion of the principal amount of the Securities of the series that will
     be payable upon declaration of acceleration of the maturity of the
     Securities;

          (n)  if the principal amount payable at the stated maturity of any
     Securities of the series will not be determinable as of any one or more
     dates prior to the stated maturity, the amount that will be deemed to be
     the principal amount of the Securities as of any such date for any purpose
     under the Securities or under this prospectus, including the principal
     amount of the Securities that will be due and payable upon any maturity
     other than the stated maturity or that will be deemed to be outstanding as
     of any date prior to the stated maturity;

          (o)  if applicable, that the Securities of the series, in whole or any
     specified part, will be defeasible and that some of our covenants will be
     defeasible and, if other than by a resolution of our Board of Directors or
     Executive Committee, the manner in which any election by us to defease any
     Securities or covenants will be evidenced;

          (p)  if applicable, that any Securities of the series will be issuable
     in whole or in part in the form of one or more global securities and, in
     that case, the respective depositories for the global securities, the form
     of any legend or legends that will be borne by any global security and any

                                        5
   17

     circumstances in which any global security may be exchanged in whole or in
     part for Securities registered, and any transfer of a global security in
     whole or in part may be registered, in the name or names of persons or
     entities other than a depository for a global security;

          (q)  whether, and the terms and conditions relating to when, we may
     satisfy some of our obligations with respect to the Securities with regard
     to payment upon maturity, or any redemption or required repurchase or in
     connection with any exchange provisions by delivering to the holders
     principal, premium, if any, interest or other form or type of consideration
     to be paid upon maturity on any Securities;

          (r)  any addition to or change in the events of default that apply to
     any Securities of the series and any change in the right of the trustee or
     the requisite holders of the Securities to declare the principal amount due
     and payable;

          (s)  any addition to or change in the covenants that apply to
     Securities of the series;

          (t)  the terms and conditions pursuant to which the Securities may be
     converted into or exchanged for other of our debt securities;

          (u)  terms with respect to book-entry procedures; and

          (v)  any other terms of the Securities of the series, which terms will
     not otherwise be inconsistent with the indenture and as authorized and
     approved by us.

     Securities, including original issue discount securities, may be sold at a
substantial discount below their principal amount. We may describe special
United States federal income tax considerations, if any, applicable to
Securities sold at an original issue discount in the applicable prospectus
supplement. In addition, we may describe special United States federal income
tax or other considerations, if any, applicable to any Securities that are
denominated in a currency or currency unit other than United States dollars in
the applicable prospectus supplement.

FORM, EXCHANGE AND TRANSFER

     The Securities of each series will be issuable only in registered form,
without coupons and, unless we specify otherwise in the applicable prospectus
supplement, only in denominations of $1,000 and integral multiples of $1,000.
(Section 3.02)

     At the option of the Holder, subject to the terms of the indenture and the
limitations applicable to Global Securities, Securities of each series will be
exchangeable for other Securities of the same series of any authorized
denomination and of a like tenor and aggregate principal amount. (Section 3.05)

     Subject to the terms of the indenture and the limitations applicable to
Global Securities, Securities may be presented for exchange as provided above or
for registration of transfer (duly endorsed or with the form of transfer
endorsed thereon duly executed) at the office of the Security Registrar or at
the office of any transfer agent we designate for such purpose. No service
charge will be made for any registration of transfer or exchange of Securities,
but we may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. Transfer or exchange will
be effected by the Security Registrar or the transfer agent, as the case may be,
being satisfied with the documents of title and identity of the person making
the request. We have appointed the trustee as Security Registrar. (Section 3.05)
We may at any time designate additional transfer agents or rescind the
designation of any transfer agent or approve a change in the office through
which any transfer agent acts, except that we will be required to maintain a
transfer agent in each Place of Payment for the Securities of each series.
(Section 10.02)

     If the Securities of any series (or of any series and specified tenor) are
to be redeemed in part, we will not be required to:

     -     issue, register the transfer of or exchange any Security of that
           series (or of that series and specified tenor, as the case may be)
           during a period beginning at the opening of business
                                        6
   18
           15 days before the day of mailing of a notice of redemption of any
           Security that may be selected for redemption and ending at the close
           of business on the day of such mailing or

     -     register the transfer of or exchange any Security so selected for
           redemption, in whole or in part, except the unredeemed portion of any
           Security being redeemed in part. (Section 3.05)

GLOBAL SECURITIES

     Some or all of the Securities of any series may be represented, in whole or
in part, by one or more Global Securities that have an aggregate principal
amount equal to that of the Securities represented thereby. Each Global Security
will be registered in the name of The Depository Trust Company, New York, New
York or its nominee identified in the applicable prospectus supplement, will be
deposited with DTC or its nominee or a custodian and will bear a legend
regarding the restrictions on exchanges and registration of transfer thereof
referred to below and any other matters as may be provided for pursuant to the
indenture. Unless otherwise described in the prospectus supplement relating to
each series, the Securities of each series offered, sold or delivered in the
United States will be issued in the form of one or more fully registered global
notes that will be deposited with, or on behalf of, DTC and registered in the
name of the DTC nominee.

     DTC has advised us as follows:

     -     it is a limited-purpose trust company which was created to hold
           securities for its participating organizations and to facilitate the
           clearance and settlement of securities transactions between DTC
           participants in securities through electronic book-entry changes in
           accounts of DTC participants;

     -     DTC participants include securities brokers and dealers (including
           the underwriters for the Securities), banks and trust companies,
           clearing corporations and certain other organizations;

     -     access to DTC's system is also available to others such as banks,
           brokers, dealers and trust companies that clear through or maintain a
           custodial relationship with a participant, either directly or
           indirectly ("indirect participants"); and

     -     persons who are not DTC participants may beneficially own securities
           held by DTC only through DTC participants or indirect participants.

     Unless otherwise provided in the applicable prospectus supplement, payments
of principal, any premium or interest on or related to the Securities of each
series registered in the name of DTC's nominee will be made by the trustee to
DTC's nominee as the registered owner of the Global Security. Under the terms of
the indenture, UPS and the trustee will treat the persons in whose names the
Securities of each series are registered as the owners of the Securities for the
purpose of receiving payment of principal, any premium or interest on the
Securities and for all other purposes. Therefore, neither we, the trustee nor
the Paying Agent has any direct responsibility or liability for the payment of
the principal, any premium or interest on the Securities to owners of beneficial
interests in a Global Security. DTC has advised us and the trustee that its
present practice is, upon receipt of any payment of principal, any premium, or
interest, to immediately credit the accounts of the DTC participants with the
payment in amounts proportionate to their respective holdings in principal
amount of beneficial interests in such Global Security as shown on DTC's
records.

     Notwithstanding any provision of the indenture or any Security described in
this prospectus, no Global Security may be exchanged in whole or in part for
Securities registered, and no transfer of a Global Security in whole or in part
may be registered, in the name of any Person other than DTC or any nominee of
DTC unless:

     -     DTC has notified us that it is unwilling or unable to continue as
           depositary for a Global Security or has ceased to be qualified to act
           as depositary as required by the indenture;

                                        7
   19

     -     there shall have occurred and be continuing an Event of Default with
           respect to the Securities represented by a Global Security; or

     -     there shall exist circumstances, if any, in addition to or in lieu of
           those described above as may be described in the applicable
           prospectus supplement.

     All securities issued in exchange for a Global Security or any portion of a
Global Security will be registered in the names as DTC may direct. (Sections
2.04 and 3.05)

     As long as DTC, or its nominee, is the registered Holder of a Global
Security, DTC or its nominee, as the case may be, will be considered the sole
owner and Holder of the Global Security and the Securities represented thereby
for all purposes under the Securities and the indenture. Except in the limited
circumstances referred to above, owners of beneficial interests in a Global
Security will not be entitled to have such Global Security or any Securities
represented thereby registered in their names, will not receive or be entitled
to receive physical delivery of certificated Securities in exchange therefor and
will not be considered to be the owners or Holders of such Global Security or
any Securities represented thereby for any purpose under the Securities or the
indenture. All payments and deliveries of principal of and any premium, Maturity
Consideration and interest on a Global Security will be made to DTC or its
nominee, as the case may be, as the Holder thereof. The laws of some
jurisdictions require that certain purchasers of securities take physical
delivery of such securities in definitive form. These laws may impair the
ability to transfer beneficial interests in a Global Security.

     Ownership of beneficial interests in a Global Security will be limited to
DTC participants and to persons that may hold beneficial interests through DTC
participants. In connection with the issuance of any Global Security, DTC will
credit, on its book entry registration and transfer system, the respective
principal amounts of Securities represented by the Global Security to the
accounts of its DTC participants. Ownership of beneficial interests in a Global
Security will be shown only on, and the transfer of those ownership interests
will be effected only through, records maintained by DTC, with respect to DTC
participants' interests, or any DTC participant, with respect to interests of
persons held by DTC participants on their behalf. Payments, transfers, exchanges
and other matters relating to beneficial interests in a Global Security may be
subject to various policies and procedures adopted by DTC from time to time.
None of us, the trustee or any agent of us or the trustee will have any
responsibility or liability for any aspect of DTC's or any DTC participant's
records relating to, or for payments made on account of, beneficial interests in
a Global Security, or for maintaining, supervising or reviewing any records
relating to such beneficial interests.

     Secondary trading in notes and debentures of corporate issuers is generally
settled in clearinghouse or next-day funds. In contrast, beneficial interests in
a Global Security will trade in DTC's same-day funds settlement system, in which
secondary market trading activity in those beneficial interests would be
required by DTC to settle in immediately available funds. There is no assurance
as to the effect, if any, that settlement in immediately available funds would
have on trading activity in such beneficial interests. Also, settlement for
purchases of beneficial interests in a Global Security upon the original
issuance thereof may be required to be made in immediately available funds.

PAYMENT AND PAYING AGENTS

     Unless otherwise indicated in the applicable prospectus supplement, payment
of interest on a Security on any Interest Payment Date will be made to the
Person in whose name the Security, or one or more Predecessor Securities, is
registered at the close of business on the Regular Record Date for payment of
interest. (Section 3.07)

     Unless otherwise indicated in the applicable prospectus supplement,
principal of and any premium, Maturity Consideration and interest on the
Securities of a particular series (other than a Global Security) will be payable
or deliverable at the office of the Paying Agent or Paying Agents as we may
designate for that purpose from time to time, except that at our option payment
of any interest may be made by check mailed to the address of the Person
entitled to the payment as that address appears in the Security

                                        8
   20

Register. Unless otherwise indicated in the applicable prospectus supplement,
the corporate trust office of the trustee in The City of New York will be
designated as our sole Paying Agent for payments and deliveries with respect to
Securities of each series. Any other Paying Agents initially designated for the
Securities of a particular series will be named in the applicable prospectus
supplement. We may at any time designate additional Paying Agents or rescind the
designation of any Paying Agent or approve a change in the office through which
any Paying Agent acts, except that we will be required to maintain a Paying
Agent in each Place of Payment for the Securities of a particular series.
(Section 10.02)

     All consideration paid or delivered to a Paying Agent for the payment or
delivery of the principal of or any premium, Maturity Consideration or interest
on any Security that remain unclaimed at the end of two years after such
principal, premium, Maturity Consideration or interest has become due and
payable or deliverable will be repaid to us, and the Holder of the Security
thereafter, as an unsecured general creditor, may look only to us for payment or
delivery thereof. (Section 10.03)

COVENANTS

  Limitation on Secured Indebtedness

     We will not create, assume, incur or guarantee, and will not permit any
Restricted Subsidiary to create, assume, incur or guarantee, any Secured
Indebtedness without making provision whereby all the Securities shall be
secured equally and ratably with, or prior to, any Secured Indebtedness,
together with, if we shall so determine, any other Indebtedness of us or any
Restricted Subsidiary then existing or thereafter created that is not
subordinate to the Securities, so long as the Secured Indebtedness shall be
outstanding unless the Secured Indebtedness, when added to:

     -     the aggregate amount of all Secured Indebtedness then outstanding
           (not including in this computation Secured Indebtedness if the
           Securities are secured equally and ratably with (or prior to) any
           Secured Indebtedness and further not including in this computation
           any Secured Indebtedness that is concurrently being retired) and

     -     the aggregate amount of all Attributable Debt then outstanding
           pursuant to Sale and Leaseback Transactions entered into by us after
           January 26, 1999, or entered into by a Restricted Subsidiary after
           January 26, 1999 or, if later, the date on which it became a
           Restricted Subsidiary (not including in this computation any
           Attributable Debt that is concurrently being retired)

would not exceed 10% of Consolidated Net Tangible Assets. (Section 10.06)

  Limitation on Sale and Lease Back Transactions

     We will not, and will not permit any Restricted Subsidiary to, enter into
any Sale and Leaseback Transaction unless the sum of:

     -     the Attributable Debt to be outstanding pursuant to any Sale and
           Leaseback Transaction;

     -     all Attributable Debt then outstanding pursuant to all other Sale and
           Leaseback Transactions entered into by us after January 26, 1999, or
           entered into by a Restricted Subsidiary after January 26, 1999 or, if
           later, the date on which it became a Restricted Subsidiary; and

     -     the aggregate of all Secured Indebtedness then outstanding (not
           including in this computation Secured Indebtedness if the Securities
           are secured equally and ratably with (or prior to) such Secured
           Indebtedness)

would not exceed 10% of Consolidated Net Tangible Assets, or an amount equal to
the greater of:

     -  the net proceeds to us or the Restricted Subsidiary of the sale of the
        Principal Property sold and leased back pursuant to any Sale and
        Leaseback Transaction; and

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     -  the amount of Attributable Debt to be outstanding pursuant to any Sale
        and Leaseback Transaction

is applied to the retirement of Funded Debt of us or any Restricted Subsidiaries
(other than Funded Debt that is subordinate to the Securities or is owing to us
or any Restricted Subsidiaries) within 180 days after the consummation of any
Sale and Leaseback Transaction. (Section 10.07)

  Consolidation, Merger and Sale of Assets

     We may not consolidate with or merge with or into any other Person or
convey, transfer or lease all or substantially all of our properties and assets
substantially as an entirety to any Person unless:

          (a)  either we are the continuing corporation or the Person, if other
     than us, formed by any consolidation or into which we are merged or the
     Person that acquires by conveyance, transfer, or lease, the properties and
     assets of us substantially as an entirety shall be a corporation,
     partnership or trust, shall be organized and validly existing under the
     laws of the United States of America, any State thereof or the District of
     Columbia and shall expressly assume, in form satisfactory to the trustee,
     the due and punctual payment or delivery of the Maturity Consideration and
     interest on all the Securities and the performance of every covenant in the
     indenture on the part of us to be performed or observed;

          (b)  immediately after giving effect to such transaction, and treating
     any Indebtedness that becomes an obligation of us or any Subsidiary in
     connection with or as a result of such transaction as having been incurred
     at the time of such transaction, no Event of Default, and no event that,
     after notice or lapse of time or both, would become an Event of Default,
     shall have occurred and be continuing; and

          (c)  we or such Person has delivered to the trustee an Officer's
     Certificate and an opinion of counsel, as to which opinion, counsel may
     rely on the Officer's Certificate as to factual matters, each stating that
     such consolidation, merger, conveyance, transfer or lease comply with the
     foregoing and that all conditions precedent provided for in the indenture
     or relating to the transaction have been complied with.

     Upon any consolidation or merger or any conveyance, transfer or lease of
the properties and assets of us substantially as an entirety, the successor
Person formed by a consolidation, or into which we are merged or the successor
Person to which any conveyance, transfer or lease is made, shall succeed to, and
be substituted for, and may exercise every right and power of us under the
Securities and the indenture with the same effect as if that successor had been
named as us therein; and thereafter, except in the case of a lease, we shall be
discharged from all obligations and covenants under the indenture and the
Securities. (Sections 8.01 and 8.02)

  Definitions

     "Attributable Debt" means, as of the date of its determination, the present
value (discounted semiannually at an interest rate of 7.0% per annum) of the
obligation of a lessee for rental payments pursuant to any Sale and Leaseback
Transaction (reduced by the amount of the rental obligations of any sublessee of
all or part of the same property) during the remaining term of such Sale and
Leaseback Transaction (including any period for which the lease relating thereto
has been extended), such rental payments not to include amounts payable by the
lessee for maintenance and repairs, insurance, taxes, assessments and similar
charges and for contingent rents (such as those based on sales). In the case of
any Sale and Leaseback Transaction in which the lease is terminable by the
lessee upon the payment of a penalty, the rental payments shall be considered
for purposes of this definition to be the lesser of:

          (1)  the rental payments to be paid under such Sale and Leaseback
     Transaction until the first date (after the date of such determination)
     upon which it may be so terminated plus the then applicable penalty upon
     such termination and

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          (2)  the rental payments required to be paid during the remaining term
     of any Sale and Leaseback Transaction (assuming such termination provision
     is not exercised).

     "Board of Directors" means either our board of directors or a committee of
that board duly authorized to act for it in respect of the indenture.

     "Board Resolution" means a copy of a resolution certified by our Secretary
or an Assistant Secretary to have been duly adopted by the Board of Directors
and to be in full force and effect on the date of the certification.

     "Capitalized Lease Obligation" means any obligation to pay rent or other
amounts under a lease of (or other agreement conveying the right to use) real or
personal property that is required to be classified and accounted for as a
capital lease obligation under generally accepted accounting principles, and,
for the purposes of the indenture, the amount of such obligation at any date
shall be the capitalized amount thereof at the applicable date, determined in
accordance with such principles.

     "Consolidated Net Tangible Assets" means at any date, the total assets
appearing on the most recently prepared consolidated balance sheet of us and the
Subsidiaries as of the end of our fiscal quarter, prepared in accordance with
generally accepted accounting principles, less all current liabilities as shown
on the balance sheet and Intangible Assets.

     "Funded Debt" means any indebtedness maturing by its terms more than one
year from its date of issue, including any indebtedness renewable or extendable
at the option of the obligor to a date later than one year from its original
date of issue.

     "Indebtedness" means

     (a)  any liability of any Person:

          (1)  for borrowed money, or under any reimbursement obligation
     relating to a letter of credit; or

          (2)  evidenced by a bond, note, debenture or similar instrument,
     including a purchase money obligation, given in connection with the
     acquisition of any businesses, properties or assets of any kind or with
     services incurred in connection with capital expenditures, other than a
     trade payable or a current liability arising in the ordinary course of
     business; or

          (3)  for the payment of money relating to a Capitalized Lease
     Obligation; or

          (4)  for Interest Rate Protection Obligations;

     (b)  any liability of others described in the preceding clause (a) that the
Person has guaranteed or that is otherwise its legal liability; and

     (c)  any amendment, supplement, modification, deferral, renewal, extension
or refunding of any liability of the types referred to in clauses (a) and (b)
above.

     "Intangible Assets" means at any date the value (net of any applicable
reserves), as shown on or reflected in our most recently prepared consolidated
balance sheet, prepared in accordance with generally accepted accounting
principles, of:

          (1)  all trade names, trademarks, licenses, patents, copyrights and
     goodwill;

          (2)  organizational and development costs;

          (3)  deferred charges (other than prepaid items such as insurance,
     taxes, interest, commissions, rents and similar items and tangible assets
     being amortized); and

          (4)  unamortized debt discount and expense, less unamortized premium.

     "Interest Rate Protection Obligations" of any Person means the obligations
of that Person pursuant to any arrangement with any other Person whereby,
directly or indirectly, that Person is entitled to receive from time to time
periodic payments calculated by applying a fixed rate of interest on a stated
notional

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amount in exchange for periodic payments made by such Person calculated by
applying a floating rate of interest on the same notional amount.

     "Liens" means any mortgage, lien, pledge, security interest, charge or
encumbrance.

     "Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof or any other entity.

     "Principal Property" means any land, land improvements, buildings and
associated factory, distribution, laboratory and office equipment (excluding any
products marketed by us or any Subsidiary) constituting a distribution facility,
operating facility, manufacturing facility, development facility, warehouse
facility, service facility or office facility (including any portion thereof),
which facility

     (a)  is owned by or leased to us or any Restricted Subsidiary,

     (b)  is located within the United States and

     (c)  has an acquisition cost plus capitalized improvements in excess of
0.50% of Consolidated Net Tangible Assets as of the date of that determination,
other than:

          (1)  any facility, or portion thereof, which has been financed by
     obligations issued by or on behalf of a State, a Territory or a possession
     of the United States, or any political subdivision of any of the foregoing,
     or the District of Columbia, the interest on which is excludable from gross
     income of the holders thereof (other than a "substantial user" of the
     related facility or a "related Person" as those terms are used in Section
     103 of the Internal Revenue Code pursuant to the provisions of Section 103
     of the Internal Revenue Code (or any similar provision hereafter enacted)
     as in effect at the time of issuance of the obligations;

          (2)  any facility that the Board of Directors may by Board Resolution
     declare is not of material importance to us and the Restricted Subsidiaries
     taken as a whole; and

          (3)  any facility, or portion thereof, owned or leased jointly or in
     common with one or more Persons other than us and any Subsidiary and in
     which the interest of us and all Subsidiaries does not exceed 50%.

     "Restricted Securities" means any shares of the capital stock or
Indebtedness of any Restricted Subsidiary.

     "Restricted Subsidiary" means (a) any Subsidiary:

          (1)  which has substantially all its property within the United States
     of America;

          (2)  which owns or is a lessee of any Principal Property; and

          (3)  in which the investment of us and all other Subsidiaries exceeds
     0.50% of Consolidated Net Tangible Assets as of the date of the
     determination; provided, however, that the term "Restricted Subsidiary"
     shall not include:

             (A)  any Subsidiary (x) primarily engaged in the business of
        purchasing, holding, collecting, servicing or otherwise dealing in and
        with installment sales contracts, leases, trust receipts, mortgages,
        commercial paper or other financing instruments, and any collateral or
        agreements relating thereto, including in the business, individually or
        through partnerships, of financing, whether through long- or short-term
        borrowings, pledges, discounts or otherwise, the sales, leasing or other
        operations of us and the Subsidiaries or any of them, or (y) engaged in
        the business of financing the assets and operations of third parties,
        and (z) in any case, not, except as incidental to such financing
        business, engaged in owning, leasing or operating any property which,
        but for this proviso, would qualify as Principal Property; or

             (B)  any Subsidiary acquired or organized after January 26, 1999,
        for the purpose of acquiring the stock or business or assets of any
        Person other than us or any Restricted Subsidiary, whether by merger,
        consolidation, acquisition of stock or assets or similar transaction
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        analogous in purpose or effect, so long as such Subsidiary does not
        acquire by merger, consolidation, acquisition of stock or assets or
        similar transaction analogous in purpose or effect all or any
        substantial part of the business or assets of us or any Restricted
        Subsidiary; and

          (b)  any other Subsidiary that is hereafter designated by the Board of
     Directors as a Restricted Subsidiary.

     "Sale and Leaseback Transaction" means any arrangement with any Person
providing for the leasing by UPS or any Restricted Subsidiary of any Principal
Property (whether the Principal Property is now owned or hereafter acquired)
that has been or is to be sold or transferred by us or a Restricted Subsidiary
to any Person, other than

          (a)  temporary leases for a term, including renewals at the option of
     the lessee, of not more than three years;

          (b)  leases between us and a Restricted Subsidiary or between
     Restricted Subsidiaries; and

          (c)  leases of Principal Property executed by the time of, or within
     180 days after the latest of, the acquisition, the completion of
     construction or improvement (including any improvements on property that
     will result in the property becoming Principal Property), or the
     commencement of commercial operation of the Principal Property.

     "Secured Indebtedness" means Indebtedness of us or a Restricted Subsidiary
that is secured by any Lien upon any Principal Property or Restricted
Securities, and Indebtedness of us or a Restricted Subsidiary in respect of any
conditional sale or other title retention agreement covering Principal Property
or Restricted Securities; but "Secured Indebtedness" shall not include any of
the following:

          (1)  Indebtedness of us and the Restricted Subsidiaries outstanding on
     January 26, 1999, secured by then-existing Liens upon, or incurred in
     connection with conditional sales agreements or other title retention
     agreements with respect to Principal Property or Restricted Securities;

          (2)  Indebtedness that is secured by:

             (A)  purchase money Liens upon Principal Property acquired after
        January 26, 1999 or

             (B)  Liens placed on Principal Property after January 26, 1999,
        during construction or improvement thereof (including any improvements
        on property which will result in the property becoming Principal
        Property) or placed thereon within 180 days after the later of
        acquisition, completion of construction or improvement or the
        commencement of commercial operation of the Principal Property or
        improvement, or placed on Restricted Securities acquired after January
        26, 1999, or

             (C)  conditional sale agreements or other title retention
        agreements with respect to any Principal Property or Restricted
        Securities acquired after January 26, 1999, if (in each case referred to
        in this subparagraph (2)) (x) the related Lien or agreement secures all
        or any part of the Indebtedness incurred for the purpose of financing
        all or any part of the purchase price or cost of construction of the
        Principal Property or improvement or Restricted Securities and (y) the
        related Lien or agreement does not extend to any Principal Property or
        Restricted Securities other than the Principal Property so acquired or
        the Principal Property, or portion thereof, on which the property so
        constructed or any improvement is located; provided, however, that the
        amount by which the aggregate principal amount of Indebtedness secured
        by any Lien or agreement exceeds the cost to us or the Restricted
        Subsidiary of the related acquisition, construction or improvement will
        be considered to be "Secured Indebtedness;"

          (3)  Indebtedness that is secured by Liens on Principal Property or
     Restricted Securities, which Liens exist at the time of acquisition (by any
     manner whatsoever) of the Principal Property or Restricted Securities by
     UPS or a Restricted Subsidiary;

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          (4)  Indebtedness of Restricted Subsidiaries owing to us or any other
     Restricted Subsidiary and Indebtedness of us owing to any Restricted
     Subsidiary;

          (5)  In the case of any corporation that becomes (by any manner
     whatsoever) a Restricted Subsidiary after January 26, 1999, Indebtedness
     that is secured by Liens upon, or conditional sale agreements or other
     title retention agreements with respect to, its property that constitutes
     Principal Property or Restricted Securities, which Liens exist at the time
     the related corporation becomes a Restricted Subsidiary;

          (6)  Guarantees by us of Secured Indebtedness and Attributable Debt of
     any Restricted Subsidiaries and guarantees by a Restricted Subsidiary of
     Secured Indebtedness and Attributable Debt of us and any other Restricted
     Subsidiaries;

          (7)  Indebtedness arising from any Sale and Leaseback Transaction;

          (8)  Indebtedness secured by Liens on property of us or a Restricted
     Subsidiary in favor of the United States of America, any State, Territory
     or possession thereof, or the District of Columbia, or any department,
     agency or instrumentality or political subdivision of the United States of
     America or any State, Territory or possession thereof, or the District of
     Columbia, or in favor of any other country or any political subdivision
     thereof, if the related Indebtedness was incurred for the purpose of
     financing all or any part of the purchase price or the cost of construction
     of the property subject to the Lien; provided, however, that the amount by
     which the aggregate principal amount of Indebtedness secured by any Lien
     exceeds the cost to UPS or the Restricted Subsidiary of the related
     acquisition or construction will be considered to be "Secured
     Indebtedness";

          (9)  Indebtedness secured by Liens on aircraft, airframes or aircraft
     engines, aeronautic equipment or computers and electronic data processing
     equipment; and

          (10)  The replacement, extension or renewal, or successive
     replacements, extensions or renewals, of any Indebtedness, in whole or in
     part, excluded from the definition of "Secured Indebtedness" by
     subparagraphs (1) through (9) above; provided, however, that no Lien
     securing, or conditional sale or title retention agreement with respect to,
     the Indebtedness will extend to or cover any Principal Property or any
     Restricted Securities, other than the property that secured the
     Indebtedness so replaced, extended or renewed, plus improvements on or to
     any such Principal Property, provided further, however, that to the extent
     that replacement, extension or renewal increases the principal amount of
     Indebtedness secured by the Lien or is in a principal amount in excess of
     the principal amount of Indebtedness excluded from the definition of
     "Secured Indebtedness" by subparagraphs (1) through (9) above, the amount
     of the increase or excess will be considered to be "Secured Indebtedness."

     In no event shall the foregoing provisions be interpreted to mean or their
operation to cause the same Indebtedness to be included more than once in the
calculation of "Secured Indebtedness" as that term is used in the indenture.

     "Subsidiary" means any corporation of which, at the time of determination,
we and/or one or more Subsidiaries owns or controls directly or indirectly more
than 50% of the shares of voting stock.

     "Wholly owned," when used with reference to a Subsidiary, means a
Subsidiary of which all of the outstanding capital stock is owned by us or by
one or more wholly owned Subsidiaries.

     "Voting Stock," when used with reference to a Subsidiary, means stock of
the class or classes having general voting power under ordinary circumstances to
elect at least a majority of the board of directors, managers or trustees of the
Subsidiary provided that, for the purposes of the indenture, stock that carries
only the right to vote conditionally on the happening of an event shall not be
considered voting stock whether or not such event shall have happened.

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EVENTS OF DEFAULT

     The indenture defines an Event of Default with respect to any series of
Securities as being any one of the following events:

          (a)  default in the payment of any interest on the Securities of that
     series when due, and the continuance of that default for a period of 30
     days;

          (b)  default in the delivery or payment of the Maturity Consideration
     on the Securities of that series at the date on which the principal becomes
     due and payable as provided in the Security or in the indenture, whether at
     the Stated Maturity or by declaration of acceleration, call for redemption
     or otherwise;

          (c)  default in the deposit of any sinking fund payment, when and as
     due on the Securities of that series;

          (d)  default in the performance or breach of any of our covenants or
     warranties under the indenture (other than a covenant or warranty a default
     in performance or breach of which is specifically dealt with in the
     indenture) and the continuance of the default or breach for a period of 60
     days after written notice as provided in the indenture; or

          (e)  certain events involving our bankruptcy, insolvency or
     reorganization. (Section 5.01)

     The indenture provides that if an Event of Default specified therein shall
occur and be continuing with respect to the Securities of any series, other than
an Event of Default involving bankruptcy, insolvency or reorganization, either
the trustee or the Holders of 25% in principal amount, or if the Securities are
not payable at Maturity for a fixed principal amount, 25% of the aggregate issue
price, of the Outstanding Securities of that series, each series acting as a
separate class, may declare the principal of the Securities of that series, or
an other amount or property, as may be provided for in the Securities of that
series, to be due and payable. If an Event of Default described in clause (e)
above with respect to the Securities of any series at the time outstanding shall
occur, the principal amount of all the Securities of that series, or such other
amount or property, as may be provided for in the Securities of that series,
(or, in the case of any Original Issue Discount Security, such specified amount)
will automatically, and without any action by the trustee or any Holder, become
immediately due and payable. (Section 5.02). The Holders of not less than a
majority in aggregate principal amount of the Securities of a series may, on
behalf of all Holders of Securities of the series, waive any past default under
the indenture with respect to the Securities of the series, except a default in
the delivery or payment of the Maturity Consideration or interest on any
Security of the series, and default in respect of a covenant or provision of the
indenture that cannot be modified or amended without the consent of the Holder
of each Outstanding Security of the affected series. (Section 5.13)

     Subject to the provisions of the indenture relating to the duties of the
trustee in case an Event of Default shall occur and be continuing, the trustee
will be under no obligation to exercise any of its rights or powers under the
indenture at the request or discretion of any of the Holders, unless the Holders
shall have offered to the trustee reasonable indemnity. (Section 6.03) Subject
to such provisions for the indemnification of the trustee, the Holders of a
majority in aggregate principal amount of the Outstanding Securities of any
series will have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the trustee, or exercising any trust
or power conferred on the trustee, with respect to the Securities of that
series. (Section 5.12)

     No Holder of a Security of any series will have any right to institute any
proceeding with respect to the indenture, or for the appointment of a receiver
or a trustee, or for any other remedy under the indenture, unless

          (1)  the Holder has previously given to the trustee written notice of
     a continuing Event of Default with respect to the Securities of that
     series,

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          (2)  the Holders of at least 25% in aggregate principal amount, or if
     the Securities are not payable at Maturity for a fixed principal amount,
     the aggregate issue price of the Outstanding Securities of that series,
     have made written request to the trustee to institute a proceeding as
     trustee,

          (3)  the Holder or Holders have offered to the trustee reasonable
     indemnity against the costs, expenses and liabilities to be incurred in
     compliance with such request, and

          (4)  the trustee has failed to institute such proceeding, and has not
     received from the Holders of a majority in aggregate principal amount or,
     if the Securities are not payable at Maturity for a fixed principal amount,
     the aggregate issue price of the Outstanding Securities of that series, a
     direction inconsistent with the request, within 60 days after the notice,
     request and offer. (Section 5.07) However, these limitations do not apply
     to a suit instituted by a Holder of a Security for the enforcement of
     delivery or payment of the Maturity Consideration relating to, or interest
     on, the Security on or after the applicable due date specified in the
     Security. (Section 5.08)

     We will be required to furnish to the trustee annually a statement by
certain of our officers as to whether or not we, to our knowledge, are in
default in the performance or observance of any of the terms, provisions and
conditions of the indenture and, if so, specifying all known defaults. (Section
10.04)

DEFEASANCE AND COVENANT DEFEASANCE

     If and to the extent indicated in the applicable prospectus supplement, we
may elect, at our option at any time, to have the provisions of Section 13.02 of
the indenture, relating to defeasance and discharge of indebtedness, or Section
13.03 of the indenture, relating to defeasance of certain restrictive covenants
in the indenture, applied to the Securities of any series, or to any specified
part of a series. (Section 13.01)

  Defeasance and Discharge

     The indenture provides that, upon our exercise of our option to have
Section 13.02 of the indenture apply to any Securities, UPS will be deemed to
have been discharged from all obligations with respect to the Securities (except
for certain obligations to exchange or register the transfer of Securities, to
replace stolen, lost or mutilated Securities, to maintain paying agencies and to
hold moneys for payment in trust) upon the deposit in trust for the benefit of
the Holders of the Securities of money or U.S. Government Obligations, or both,
which, through the payment of principal and interest in respect thereof in
accordance with their terms, will provide money in an amount sufficient to pay
the principal of and any premium and interest on the Securities on the
respective Stated Maturities in accordance with the terms of the indenture and
the Securities. Defeasance or discharge may occur only if, among other things,
we have delivered to the trustee an Opinion of Counsel to the effect that, we
have received from, or there has been published by, the United States Internal
Revenue Service a ruling, or there has been a change in tax law, in any case to
the effect that Holders of the Securities will not recognize gain or loss for
federal income tax purposes as a result of the deposit, defeasance and discharge
and will be subject to federal income tax on the same amount, in the same manner
and at the same times as would have been the case if the deposit, defeasance and
discharge were not to occur. (Sections 13.02 and 13.04)

  Defeasance of Covenants

     The indenture provides that, upon our exercise of our option to have
Section 13.03 of the indenture apply to any Securities, we may omit to comply
with certain restrictive covenants, including those described under "Covenants,"
any that may be described in the applicable prospectus supplement, and the
occurrence of certain Events of Default, which are described above in clause (d)
(with respect to restrictive covenants) and under "Events of Default" and any
that may be described in the applicable prospectus supplement, will be deemed
not to be or result in an Event of Default, in each case with respect to the
Securities. In order to exercise its option, we will be required to deposit, in
trust for the benefit of the Holders of the Securities, money or U.S. Government
Obligations, or both, which, through the payment of principal and interest in
respect thereof in accordance with their terms, will provide money in an amount
sufficient to pay the principal of and any premium and interest on the
Securities on the
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respective Stated Maturities in accordance with the terms of the indenture
and the Securities. We will also be required, among other things, to deliver to
the trustee an Opinion of Counsel to the effect that Holders of the Securities
will not recognize gain or loss for federal income tax purposes as a result of
deposit and defeasance of certain obligations and will be subject to federal
income tax on the same amount, in the same manner and at the same times as would
have been the case if the deposit and defeasance were not to occur. In the event
we exercised this option with respect to any Securities and the Securities were
declared due and payable because of the occurrence of any Event of Default, the
amount of money and U.S. Government Obligations so deposited in trust would be
sufficient to pay amounts due on the Securities at the time of their respective
Stated Maturities but may not be sufficient to pay amounts due on the Securities
upon any acceleration resulting from the Event of Default. In that case, we
would remain liable for the payments. (Sections 13.03 and 13.04)

MODIFICATION OF THE INDENTURE

     The indenture provides that we and the trustee may, without the consent of
any Holders of Securities, enter into supplemental indentures for the purposes,
among other things, of adding to our covenants, adding additional Events of
Default, establishing the form or terms of Securities or curing ambiguities or
inconsistencies in the indenture or making other provisions, provided that any
action to cure ambiguities or inconsistencies not adversely affect the interests
of the Holders of any Outstanding series of Securities in any material respect.
(Section 9.01)

     Modifications and amendments of the indenture may be made by us and the
trustee with the consent of the Holders of a majority in aggregate principal
amount or, if the Securities are not payable at Maturity for a fixed principal
amount, the aggregate issue price, of the Outstanding Securities of each series
affected thereby, expect that no modification or amendment may, without the
consent of the Holder of each Outstanding Security affected thereby,

          (a)  change the Stated Maturity of the Maturity Consideration or any
     installment of Maturity Consideration or interest on, any Security,

          (b)  reduce the principal amount of or reduce the amount or change the
     type of Maturity Consideration or reduce the rate of interest on, or any
     premium payable upon the redemption of, or the amount of Maturity
     Consideration of an Original Issue Discount Security or any other Security
     that would be due and deliverable or payable upon a declaration of
     acceleration of the Maturity thereof upon the occurrence of an Event of
     Default, of any Security,

          (c)  change the Place of Payment where, or the coin or currency in
     which, any Maturity Consideration or interest on any Security are
     deliverable or payable,

          (d)  impair the right to institute suit for the enforcement of any
     payment on or with respect to any Security,

          (e)  reduce the percentage in principal amount or aggregate issue
     price, as the case may be, of Securities of any series, the consent of
     whose Holders is required for modification or amendment of the indenture or
     for waiver of compliance with certain provisions of the indenture or for
     waiver of certain defaults, or

          (f)  modify the requirements contained in the indenture for consent to
     or approval of certain matters except to increase any percentage for a
     consent or approval or to provide that certain other provisions cannot be
     modified or waived without the consent of the Holder of each Security
     affected thereby. (Section 9.02)

     A supplemental indenture that changes or eliminates any covenant or other
provision of the indenture which has been expressly included solely for the
benefit of one or more particular series of Securities, or that modifies the
rights of the holders of Securities of the series with respect to the covenant
or other provision, shall be deemed not to affect the rights under the indenture
of the Holders of Securities of any other series. (Section 9.02)

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     The Holders of a majority in aggregate principal amount of the Outstanding
Securities of a series may, on behalf of the Holders of all the Securities of
the series, waive compliance by us with certain restrictive provisions of the
indenture. (Section 10.08)

NOTICES

     Notices to Holders of Securities will be given by mail to the addresses of
the Holders as they may appear in the Security Register. (Section 1.06)

TITLE

     We the trustee and any agent of us or the trustee may treat the Person in
whose name a Security is registered as the absolute owner of a Security for the
purpose of making payment and for all other purposes. (Section 3.08)

GOVERNING LAW

     The indenture and the Securities will be governed by, and construed in
accordance with, the law of the State of New York. (Section 1.12)

REGARDING THE TRUSTEE

     Citibank, N.A. is the trustee under the indenture. We have other customary
banking relationships with Citibank, N.A. in the ordinary course of business.

                              PLAN OF DISTRIBUTION

     We may sell debt securities to one or more underwriters for public offering
and sale by them or may sell debt securities to investors directly or through
agents. Any underwriter or agent involved in the offer and sale of the debt
securities (the "offered debt securities") will be named in an applicable
prospectus supplement.

     Underwriters may offer and sell the offered debt securities at a fixed
price or prices that may be changed, or from time to time at market prices
prevailing at the time of sale, at prices related to prevailing market prices or
at negotiated prices. We also may offer and sell the offered debt securities in
exchange for one or more of our outstanding issues of debt securities. We also
may, from time to time, authorize underwriters acting as our agents to offer and
sell the offered debt securities upon the terms and conditions as shall be set
forth in any prospectus supplement. In connection with the sale of offered debt
securities, underwriters may be deemed to have received compensation from us in
the form of underwriting discounts or commissions and may also receive
commissions from purchasers of offered debt securities for whom they may act as
agent. Underwriters may sell offered debt securities to or through dealers, and
dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions, which may be changed from
time to time, from the purchasers for whom they may act as agent.

     Any underwriting compensation paid by us to underwriters or agents in
connection with the offering of offered debt securities, and any discounts, or
concessions or commissions allowed by underwriters to participating dealers,
will be set forth in an applicable prospectus supplement. Underwriters, dealers
and agents participating in the distribution of the offered debt securities may
be deemed to be underwriters, and any discounts and commissions received by them
and any profit realized by them on resale of the offered debt securities may be
deemed to be underwriting discounts and commissions, under the Securities Act.
Underwriters, dealers and agents may be entitled, under agreements with us, to
indemnification against and contribution toward certain civil liabilities,
including liabilities under the Securities Act, and to reimbursement by us for
certain expenses.

                                       18
   30

     If so indicated in an applicable prospectus supplement, we will authorize
dealers acting as our agents to solicit offers by certain institutions to
purchase offered debt securities from us at the public offering price set forth
in the prospectus supplement pursuant to delayed contracts providing for payment
and delivery on the date or dates stated in the prospectus supplement. Each
contract will be for an amount not less than, and the aggregate principal amount
of offered debt securities sold pursuant to contracts shall be not less nor more
than, the respective amounts stated in the prospectus supplement. Institutions
with whom contracts, when authorized, may be made include commercial and savings
banks, insurance companies, pension funds, investment companies, educational and
charitable institutions and other institutions, but will in all cases be subject
to our approval. Contracts will not be subject to any conditions except

          (1)  the purchase by an institution of the offered debt securities
     covered by its contracts shall not at the time of delivery be prohibited
     under the laws of any jurisdiction in the United States to which the
     institution is subject, and

          (2)  if the offered debt securities are being sold to underwriters, we
     shall have sold to the underwriters the total principal amount of the
     offered debt securities less the principal amount thereof covered by
     contracts.

     Agents and underwriters will have no responsibility in respect of the
delivery or performance of contracts.

     All offered debt securities will be a new issue of securities with no
established trading market. Any underwriters to whom offered debt securities are
sold by us for public offering and sale may make a market in such offered debt
securities, but the underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. No assurance can be
given as to the liquidity of or the trading markets for any offered debt
securities.

     Any underwriter may engage in over-allotment, stabilizing transactions,
short covering transactions and penalty bids in accordance with Regulation M
under the Exchange Act. Over-allotment involves sales in excess of the offering
size, which creates a short position. Stabilizing transactions permit bids to
purchase the underlying security so long as the stabilizing bids do not exceed a
specified maximum. Short covering transactions involve purchases of the offered
debt securities in the open market after the distribution is completed to cover
short positions. Penalty bids permit the underwriters to reclaim a selling
concession from a dealer when the offered debt securities originally sold by the
dealer are purchased in a covering transaction to cover short positions. Those
activities may cause the price of the offered debt securities to be higher than
it would otherwise be. If commenced, the underwriters may discontinue those
activities at any time.

     Certain of the underwriters or agents and their associates may be customers
of, engage in transactions with and perform services for us in the ordinary
course of business.

                      VALIDITY OF OFFERED DEBT SECURITIES

     The validity of the debt securities will be passed upon for UPS by Hunton &
Williams, New York, New York. Certain legal matters in connection with the debt
securities will be passed upon for the underwriters by Brown & Wood LLP, New
York, New York.

                                    EXPERTS

     The consolidated financial statements incorporated in this prospectus by
reference from United Parcel Service of America, Inc.'s Annual Report on Form
10-K for the year ended December 31, 1998 have been audited by Deloitte & Touche
LLP, independent auditors, as stated in their report, which is incorporated
herein by reference, and have been so incorporated in reliance upon the report
of such firm given upon their authority as experts in accounting and auditing.

                                       19
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                                  $52,365,000

                                 (UPS(R) LOGO)

                          UNITED PARCEL SERVICE, INC.

                      FLOATING RATE SENIOR NOTES DUE 2051

                      ------------------------------------

                             PROSPECTUS SUPPLEMENT

                      ------------------------------------

         UBS WARBURG                              SALOMON SMITH BARNEY

                                 JUNE 26, 2001

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