While e-commerce is a huge plus for shoppers, giving us more options at better prices delivered right to our front door, online shopping is a huge logistics headache for the companies who have to deliver those packages. Cheap shipping in huge volume can hurt profit margins for delivery services, causing some to speculate about rising delivery prices in the future. To offset those price hikes, UPS is exploring technology options such as it’s “HorseFly” drone, which it revealed in a live demonstration on Tuesday. Unfortunately, while the drone’s initial demo went smoothly, a followup didn’t quite go as planned.
Does UPS’ Flying Deliveries Mean High Profits?
Until just a few years ago, drones were considered futuristic at best, and science fiction in most cases. But drone technology is now so common that consumers can purchase a basic drone at a toy store for a few dollars. The future is here. And UPS embraced that future when the company revealed its HorseFly drone in a demonstration for reporters at a blueberry farm in Tampa, FL.
The HorseFly octocopter would be an assist to drivers on the road rather than autonomous delivery vehicles leaving from a shipping warehouse, as in Amazon’s ambition for drones. A new version of the well-known brown UPS delivery vehicles would house the drone in a retractable roof. When it’s ready to deliver a package, the HorseFly is loaded up with that package by the driver of the truck and sent on a pre-mapped route. The drone can carry up to 10 lbs. and fly for 30 minutes on a single charge. Once the package is dropped off, the drone goes back to its dock where it then recharges.
Is it perfect?
By no means. But the HorseFly shows quite a bit of promise. The scheduled demo went off without a hitch in front of reporters, but then someone asked for a second demonstration. The drone aborted its launch and tried to land back on top of the UPS truck. However, the roof of the vehicle was still closing, causing the drone to fall and almost be crushed by the vehicle before being salvaged by human controls. UPS reps said they’ve never seen the glitch before, leaving the company quite a bit of testing to get done before the drones can be put in service.
But that testing will happen because it can mean a huge increase in profit margins. There are roughly 66,000 UPS drivers on the road every day. If each driver reduces his or her drive by just one mile per day, that’s an annual savings of $50 million for the company. As the drones improve, that number can rise significantly.
Watch the news report from Business Insider about UPS drones:
UPS is showing the world that it’s embracing technology rather than struggling with it, and making a commitment to find solutions other than just raising prices in order to secure profits. Investors seem to approve, as shares of United Parcel Service, Inc. (UPS) are UP on the demonstration, and should continue to rise.
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