UPS drones: Delivery's next frontier

The Advanced Technology Group at UPS decides which tech is worth investing in, and drones are the latest effort paying off for the company.

UPS drones: Delivery's next frontier
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In part three of our five-part series about UPS, TechRepublic's Karen Roby talked with Bala Ganesh, vice president of Advanced Technology Group at UPS, to discuss the company's drone airline. The following is an edited transcript of their conversation, which was conducted in December 2019. 

Download the entire series: Inside UPS: The logistics company's never-ending digital transformation (free PDF) 

Karen Roby: If you happen to be anywhere near the airspace around Louisville, KY, chances are good you'll see a UPS jet flying overhead. Hundreds of flights take off and land here at Worldport every day. But that's not the only flying the company does. Just recently, a drone subsidiary was added. 

It's unlikely you'll see a UPS drone flying overhead anytime soon unless you happen to be at a few key locations where the autonomous flying vehicles are currently in use. The shipping giant's journey with drones started about four years ago. A humanitarian-type project overseas was performed to first test out the technology. The measure proved successful, so company leaders looked closer to home to advance the program. 

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A UPS drone takes off from a medical campus in North Carolina.

Image: UPS

Bala Ganesh: So the first use case we tested in the US was flying, again, prescription supplies from mainland Massachusetts to an island off the coast. Now think about it... right here at that time you had to wait for a ferry once a day to get those supplies across. So this was a huge change. Again, think about the customer needs, where now you could, on demand, get an asthma inhaler if you need it just as you need it instead of having to wait for that next day when the ferry comes.

Karen Roby: Once the customer need was proven, UPS tested the technology within its own network, using a driver augmentation model. Drones were launched off of modules docked on top of package cars proving especially useful in rural areas. Around the same time the FAA established a framework that allowed for drones to be used in a more sustainable fashion, and UPS was asked to partner with the government agency to help determine ideal use cases.

Bala Ganesh: Long story short, the idea is they let you do tests, which previously were not allowed, in a limited fashion, wherein it helped you test certain things, and it also helped the FAA learn because we were giving them data about what works, what didn't work.

Karen Roby: The first use case involved drones shuttling samples around a medical campus in North Carolina. The time savings realized by using drones instead of cars was significant.

Bala Ganesh: It worked--it cut down the time from 30... 60 minutes down to 5 to 7 minutes; plus, there was a need. A customer says this is important, this could be a life-changing event, we are willing to pay for this because this is something that's useful to us.

SEE: Special feature: Autonomous vehicles and the enterprise (free PDF) (TechRepublic)

Karen Roby: The pilot program proved it could be a revenue-generating business, and the FAA eventually granted UPS the first full certification for a drone airline.

Bala Ganesh: Now we're flying 10 flights a day. It's revenue generating. We are evaluating other locations. We have announced publicly to start expanding, to start thinking through how we can take this forward.

Karen Roby: The process of taking technology forward can be a challenge for companies of all sizes. Technology changes so fast, and the right projects have to be pushed ahead or dropped quickly to keep up. The Advanced Technology Group at UPS is tasked with making those decisions every day, when it comes to the question of what's next for the shipping giant.

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UPS became the first commercial drone delivery service in the US.

Image: UPS

Bala Ganesh: A lot of this is dependent on moving quickly, testing things, and putting things on hold. Either killing it or continuing to work on something that's more promising. A lot of times, what we do upfront is trying to make that quick evaluation. We have what we call our quick yes-no, go/no-go decisions that we come across, where we do a quick analysis of what the customer needs are, see the technology maturity, and then based on that, make a quick call. Is it worth it to take it into a test phase?
If it is worth it to take it to a test phase, we do a quick analysis that says, "Should we build it? Should we buy it? Should we partner with somebody or in pieces?" to start putting those pieces together. Typically, it's a combination of some building some pieces of it, buying some stuff, and then putting it together with some partners. These partners could be companies, startups, or even universities.

Karen Roby: Ganesh says the FAA has to gain more confidence in drones before we'll be seeing them on a regular basis. He estimates the company will be using the unmanned vehicles in more situations, somewhere between 2021 and 2025.

Read our entire UPS series

Also see

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Image: Derek Poore