UPS is the world’s largest package delivery company operating in 220 countries and employing 481,000 people.
But it also sees itself as a technology company, adapting traditional methods of moving goods with new ways of doing things. As a technology company, it is competing with Google’s parent Alphabet in the development of unmanned drones.
UPS (NYSE:UPS) has been testing unmanned drones for several years. Its first efforts were delivering time and temperature sensitive drugs in remote parts of Ghana and Rwanda where patchy road and air links make delivery slow and difficult. Last year, it used drones to deliver blood and tissue samples between hospitals in Raleigh, North Carolina. In the fall, it received wider approval from the US Federal Aviation Authority (FAA) for a ‘drone airline’ to use unmanned planes to more widely deliver goods.
The certification lets the company fly as many drones as it wants, carry cargo that weighs more than 55 pounds and fly at night.
Not to be outdone, UPS rival FedEx joined Alphabet (NDQ:GOOGL) spinoff Wing Aviation in a partnership with the Walgreens pharmacy chain. In October, it made the first scheduled commercial residential delivery in the U.S. to a home in Christiansburg, Virginia.
Wing was spun out of Alphabet’s experimental X division in 2018 and is part of Alphabet’s “Other Bets” portfolio. It received FAA approval last year for the delivery of small packages following more than 70,000 test flights and 3,000 deliveries in Australia.
Soon after the Wing test, UPS unveiled a partnership with CVS Health Corp. A drone made two short flights to homes near a CVS store in Cary, North Carolina. The prescriptions were lowered via a cable while the drone hovered about 20 feet about each address.
UPS said one of the packages was delivered to a customer with limited mobility, which makes it difficult for them to make the trip to a nearby store. A UPS drone operator who was on hand to take over the flights if needed.
UPS and Alphabet are examples of companies that adapt to new technology to streamline their own operations, or those of their customers. By improving productivity, they are improving profitability.
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