UPS to launch drone business and SME e-commerce delivery operation

UPS is launching an international delivery service for small and medium size retailers in order to capture a slice of surging cross-border e-commerce, forecast to total $1trn by 2020, while it has also announced the launch of a new drone business.

The UPS Economy service will connect key e-commerce destinations across the world, said a spokesperson for the US parcels and logistics giant.

It will be available initially to customers in the US, Canada, China, Hong Kong and the UK, expanding to other key global markets “in the near future”.

UPS said that cross-border online sales will make up 20% of global e-commerce in 2022: “Our customers are seeking growth opportunities by doing what UPS did decades ago – they’re going global,” said Nando Cesarone, president of UPS International.

“The opportunities are even greater in today’s dynamic international trade environment with cross-border e-commerce set to grow two times faster than domestic e-commerce.”

With an eye on the export ambitions of the UK in a post-Brexit world, the UPS spokesperson added: “The UPS Economy service benefits UK. businesses in the B2C and B2B space that are looking to export to key e-commerce destinations across the world, but have been waiting for a more affordable way to ship internationally.

“Exporting opens doors to new customers, and helps businesses diversify revenue to offset economic shifts.”

Added Cesarone: “And while the ‘last mile’ gets a lot of attention in our industry, we know small businesses look carefully at the first mile.

“With the same driver, same pick-up service and competitive rates, we’re making that first mile easier and more economical for even the smallest of our customers.

“This service enables small businesses to compete like micro-multinationals.”

Drones

The express also today announced that it has applied to the U.S. Federal Aviation Administration (FAA) for Part 135 certification to operate commercial drone flights in the UPS network under a subsidiary business called UPS Flight Forward Inc.

The new subsidiary is a recently incorporated business that could receive Part 135 certification as early as this year, putting UPS on track to have one of the first fully certified revenue-generating drone operations in the US.

When approved, UPS Flight Forward will be one of the first fully-certified US drone operations to complete routine flights.

UPS said the certification “lays the foundation for drone flights beyond an operator’s visual line of sight and for flights occurring day or night”.

Such flights are highly restricted in the US and approved only by exception.

“UPS is committed to using technology to transform the way we do business,” said Scott Price, UPS chief transformation and strategy officer. “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.”