UPS Drone Unit Makes First Revenue Deliveries For CVS

UPS Inc. (NYSE: UPS) said Tuesday that its commercial drone unit had made its first revenue deliveries of prescription drugs from a CVS Corp. (NYSE: CVS) pharmacy in North Carolina to customers' residences.

Benzinga · 11/05/2019 19:58

UPS Inc. (NYSE: UPS) said Tuesday that its commercial drone unit had made its first revenue deliveries of prescription drugs from a CVS Corp. (NYSE: CVS) pharmacy in North Carolina to customers' residences.

The first two deliveries occurred last Friday in Cary, North Carolina. The first flight went from the pharmacy to a private residence, UPS said. The second was to a customer in a nearby retirement community. The deliveries used the M2 drone system developed by UPS and its partner, drone systems developer Matternet.

The two customers agreed to take part in the deliveries after CVS had contacted various customers in the area. The drone traveled a short distance and remained in the line of sight of a drone operator at the CVS location, according to UPS Spokesman Kyle Peterson. Peterson did not disclose the specific distance the drone traveled, citing competitive issues.

One expected use of drones is to get items to rural areas where traditional deliveries would be costly for companies. However, the two deliveries took place in fairly densely populated areas, Peterson said. CVS paid UPS for the delivery services, he said.

In March, UPS and Matternet began drone operations across the WakeMed medical campus in Raleigh, North Carolina. They have operated 1,500 flights since the launch. In September, the UPS unit, UPS Flight Forward, received Federal Aviation Administration (FAA) certification to operate unlimited drone flights. Soon after, the unit announced agreements with CVS, drug distributor Amerisource Bergen Corp. (NYSE: ABC) and insurance company Kaiser Permanente.

UPS said the unit is working to expand delivery services beyond health care.

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