Would UPS and FedEx be in a good position to become bitcoin escrow services?  They already know the time a package was delivered. They are trusted by most buyers and sellers to deliver the goods.

Which escrow method would work the best for this? pay to address (you pay UPS at checkout instead of the merchant), multi-sig, or pay to script.  Which method is available now with current wallet software?

Process for pay to address would be: Payment is made to UPS address instead of seller pay to address.  Merchant creates tracking numbers which get linked to the transaction.  Merchant ships packages.  An autonomous UPS process sends transaction total minus shipping and escrow fee to merchant when they do the final package delivery scan. 

Just because the package shipped doesn't mean you received what you paid for, so there would be arbitration involved but for majority of transactions delivery equals A+ seller.