UPS lays the groundwork for a commercial US drone service

UPS has announced that it is forming a subsidiary, UPS Flight Forward Inc., and applying for FAA Part 135 certification, in order to provide commercial-scale, revenue-generating drone deliveries within the US. Part 135 certification, among other things, allows for providers to go beyond line of sight transits (i.e., where an operator is continually in visual contact with the drone) and over populated areas. “UPS’s formation of a drone delivery company and application to begin regular operations under this level of certification is historic for UPS and for the drone and logistics industries, overall.” The service, if approved, would be one of the first within the US.

Although UPS has multiple drone testing or operations going on, both within its facilities and outside, the direction the company is taking derives from the WakeMed project starting this spring. WakeMed, a health system based in Raleigh, NC, is contracted with UPS to provide drone deliveries from various clinics to a central lab; the flights take about 30 min and avoid ground traffic congestion. That project was approved by FAA under its Part 107 rules as a specific use case.

Matternet's drone driving the UPS/WakeMed project. credit: Matternet

UPS works with Matternet, a Menlo Park, CA drone developer, for the flight vehicle and landing pod where the delivery is collected and the drone recharged. (Matternet has also been performing this operation in Lugano, Switzerland). According to Dan Gagnon, UPS VP for Healthcare and Life Sciences Logistics, WakeMed is in the process of expanding the number of locations being served, and WakeMed doctors are enjoying the faster response time provided by the service.

Gagnon goes on to say that there has been “keen interest” from other health systems in the US to set up a comparable service in their networks, as well as from drug wholesalers and some PBMs and retail pharmacy chains. “This interest isn’t surprising, when you consider how health providers are moving toward more outpatient services and more locations, and everyone is focusing on direct-to-patient services,” he says. However, interest from pharma companies specifically has been limited, but that could just be a matter of time. “No one would argue that today’s models will be where the industry winds up four or five years from now,” he says.