UPS leans into delivery drone application ahead of 3Q earnings

Ahead of the release of its third-quarter results today, UPS announced a slew of new projects and technology offerings, including several new delivery drone projects for the medical and pharmaceutical industries.

Several of the announcements relate to UPS’ technology subsidiary, UPS Flight Forward (UPS FF). First is a new agreement between UPS FF and CVS Health Corp.’s subsidiary CVS Pharmacy to develop new operating models for drone delivery, including business-to-consumer operations. This is an expansion beyond UPS FF’s current healthcare campus-based operation, launched at WakeMed Hospital in Raleigh, N.C.

“We’re always looking to improve convenience for customers through faster, lower-cost and more efficient delivery models,” said Kevin Hourican, president of CVS Pharmacy, in a statement on the new agreement. “Given our focus on innovation, we’re excited to be the first retail health care company to explore drone delivery options with UPS.”

UPS FF is also expanding its healthcare campus drone operations beyond its launch location in North Carolina to Utah, where the drone airline will begin flights at the University of Utah Health campus in Salt Lake City. The statement on the new operations said the drone flights will focus on improving cost efficiency as the campus undergoes significant growth through new medical construction at the university’s Acute Care Center, rehabilitation hospital and Sugar House Health Center. Drone flights will involve medical personnel packing secure drone containers with medical items. The drones will then fly along predetermined flight paths to reach their delivery points.

The final announcement of expansions at UPS FF is another new partnership. The drone airline will work with pharmaceutical distributor AmerisourceBergen to transport pharma products, supplies and records to certain medical campuses AmerisourceBergen serves across the United States. According to the UPS statement on the partnership, the distributor currently uses courier vehicles for most of its transportation needs.

“UPS expects to rapidly scale the hospital campus drone delivery solution and to expand UPS Flight Forward services to other customer use-cases,” the statement added. With three back-to-back announcements, UPS is prioritizing its healthcare and life science logistics segment during an overall challenging environment for air cargo.