UPS's medical drone empire is rapidly expanding — and now it will deliver CVS goods to your home
- UPS announced a slew of new customers to its rapidly-expanding drone-delivery service — including CVS Health, its first retail client for drone delivery.
- Through a new revenue-generating service for the University of Utah Health hospital campuses, UPS and drone company Matternet will move medical samples and other cargo.
- UPS Flight Forward will also service Amerisource Bergen and Kaiser Permanente in revenue-generating services.
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UPS's drone empire is rapidly expanding.
On Monday, the package giant established itself yet again as America's leader in drone deliveries with the announcement of four new customers — including its first retail customer, CVS Health.
"We're doing this in a pragmatic way," Bala Ganesh, vice president of UPS Advanced Technology Group, told Business Insider.
"We're first growing the portion of the business that has an approved regulatory framework – this is revenue-generating work in support of high-demand, value-added, critical instant delivery solutions on hospital campuses," Ganesh added.
Ganesh has long emphasized the importance of developing sustainable business cases around drone deliveries — meaning, revenue-generating businesses rather than flashy, short-term drone stunts. But the CVS partnership will be merely exploratory to start.
"Our project with CVS represents a big step forward to apply our learnings on the hospital campus setting to customers' homes," Ganesh said. "We will create new logistics and air delivery solutions no one has considered."
Here are the four new partnerships and what UPS will do for them:
- CVS Health: UPS Flight Forward, the company's drone airline, will develop "a variety of drone delivery use cases" in the business-to-consumer realm. That will include urgent deliveries of prescription and other goods to the homes of CVS customers. Exact services and locations haven't been disclosed yet.
- AmerisourceBergen: The wholesale pharmaceutical distributor will work with UPS Flight Forward to ship medications, supplies, and records via drone. Qualifying medical campuses served by AmerisourceBergen will be first in the trial, followed by other campuses.
- Kaiser Permanente: UPS Flight Forward will move healthcare goods via drone on Kaiser Permanente's medical campuses. This will be revenue-generating once flights begin, according to a UPS spokesperson.
- University of Utah Health hospital campuses: In partnership with Matternet, UPS will embark on a revenue-generating drone-delivery service to move medical samples and other goods. It's similar to UPS's first medical drone client — WakeMed Hospital in Raleigh, North Carolina.
Rivals are quickly gearing up in response
UPS announced earlier this month that it was the first drone company to score nationwide approval from the Federal Aviation Administration. That move raised eyebrows — showing that drone deliveries are commercially feasible even under rigorous regulations.
Its rivals have been quickly moving to match UPS's might.
On Oct. 18, Wing, owned by Google's parent company Alphabet, made its first commercial drone deliveries. Wing also has FAA certification. But the scope of its operation is limited to a town called Christiansburg, Virginia.
Wing has partnered with FedEx Express and Walgreens to deliver goods to customers' homes in the Southwest Virginia town, about 210 miles away from the state capital Richmond.
Meanwhile, Amazon has pledged to take its Prime Air drone-delivery service to the real-world this year. At a September event, Amazon's Worldwide Consumer chief Jeff Wilke said its latest drone model would be fulfilling orders "in months."
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