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UPS Expands Drone, Other Operations For Healthcare Companies; Broadens E-Commerce Reach For Smaller Businesses

FreightWaves

UPS Inc. (NYSE: UPS) said late on October 21 that it expanded its commercial drone operations to include deliveries for large healthcare providers, created an Internet-of-Things platform for time-critical healthcare shipments and broadened its e-commerce ties with digital shipping companies such as Stamps.com (NASDAQ: STMP). 

The Atlanta-based company said it has inked agreements with retail pharmacy giant CVS Health (NYSE: CVS) to deliver products such as prescriptions by drone. It will also work with drug wholesaler AmerisourceBergen (NYSE: ABC) to deliver specific drugs, supplies and medical records to medical campuses served by the healthcare concern. In addition, health insurance firm Kaiser Permanente will use the UPS drone network to deliver drugs and supplies to Kaiser's U.S. campuses, UPS said.

Earlier this month, UPS' drone airline, "UPS Freight Forward," received federal government authority to operate with virtually no limit on size or scope of operations. The company had said it would rapidly scale up its drone operation once it received the authority it sought. Until now, its drone operations were limited to serving the WakeMed Hospital in North Carolina. Besides the expansion with industry partners, UPS said Oct. 21 that it will deploy drones across the University of Utah Health hospital campuses.

As part of its expanded healthcare logistics portfolio, the company said it has launched "UPS Premier," which will use advanced IoT sensors to improve the tracking of time- and temperature-sensitive packages. UPS will use the offering as a jumping-off point to retrofit its network with IoT systems to better track healthcare packages, the company said. In a related move, UPS has created a unit dedicated to healthcare and life sciences logistics.

Under the company's new e-commerce push, it will offer discounted shipping rates and other services to small- to mid-sized businesses that rely on digital platforms like Stamps.com to process labels for parcel shipments. The Stamps.com collaboration is aimed at penetrating its 740,000 e-commerce customers, many of whom want to offer similar services as bigger players but lack the resources to do so. UPS has made courting the "SMB" segment a very high priority, as have rivals FedEx Corp. (NYSE: FDX), DHL Express and the U.S. Postal Service (USPS).

The collaboration with UPS signals a change for Stamps.com, which in February 2019 ended  a long-time exclusivity agreement with USPS, in which it acted as a reseller for USPS services. Stamps.com said at the time that it was looking to enter into relationships with other companies in the parcel segment.

The UPS announcement marks the second time this year that the company has disclosed sweeping changes to its portfolio just before disclosing its quarterly financial results. The last time was in late July. UPS releases its third-quarter results before the financial markets open on October 22.

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