United Parcel Service tests drone deliveries, eyes future price changes
Published: 2017-02-22 00:03:52.0 BdST Updated: 2017-02-22 00:03:52.0 BdST
Package delivery company United Parcel Service Inc has said it will consider raising prices across the board in coming years to offset pressure on margins, particularly from the rising costs of delivering packages to e-commerce customers.
"We... always have to be diligent about getting the right return," particularly as costs rise, Richard Peretz, the company's chief financial officer, said at an investor event on Tuesday.
His comments came a day after the company tested home delivery by drone in Lithia, Florida, the first step in what it hopes will be more automated - and cheaper - deliveries in rural areas.
UPS is grappling with lower margins for e-commerce, which have dented earnings. Businesses typically get more packages per stop than residences, making the delivery to individual homes more expensive.
Drones could be one way to reduce those costs.
In Monday's test, a drone launched from the roof of a UPS vehicle flew autonomously toward its destination, dropped a package and then returned to the vehicle as the driver continued on a delivery route.
"We see this as an exploration into this new technology," John Dodero, vice president of industrial engineering at UPS, said ahead of the test.
The company is also considering how changes in global trade, particularly with Mexico, will impact its business as US President Donald Trump vows to renegotiate the North American Free Trade Agreement (NAFTA), which took effect in 1994.
The US-Mexico supply chain is "critical," said David Abney, the company's chief executive. NAFTA "is a little bit old. It's not reflective of 21st-century agreements," he said.
But Abney added that the company believes "global trade certainly drives jobs, and we think that southern border is very important to our customers and the country."
UPS has tested drones before and is considering other uses for the technology, such as in inventory control and helping inspect planes and vehicles within hangars and warehouses.
But UPS has no timeline for when drones might be put into wider use, Dodero said, partly because federal authorities are still developing regulations on how to use the technology.
The company also said it would expand US pickup and delivery to six days for ground shipments and offer Saturday delivery in the largest metropolitan areas.
UPS sees revenue growth of 4 percent to 6 percent over 2018 and 2019, Peretz said, with adjusted diluted earnings per share up 5 percent to 10 percent. It is planning $1 billion to $1.8 billion in annual share repurchases over the same time.
Any unauthorised use or reproduction of bdnews24.com content for commercial purposes is strictly prohibited and constitutes copyright infringement liable to legal action.
- Bose headphones spy on listeners: lawsuit
- Inspired by Pokemon Go, Facebook pushes augmented reality
- Facebook shareholders propose reports on 'fake news', pay equality
- China live streaming: Would-be internet stars boost billion-dollar market
- Cyber attack on Union Bank of India similar to Bangladesh heist: WSJ
- Google promises to open merchant account in Bangladesh
- Computer hack sets off 156 emergency sirens across Dallas
- YouTube tweaks ad strategy to curb content stealing
- The World’s Most Innovative Research Institutions – 2017
- Facebook will not be blocked, says telecoms state minister Tarana
- Govt picks 285 colleges, 40 high schools for nationalisation
- Messi's 500th Barcelona goal sinks Real Madrid in thriller
- Before heavy rains, fog-like clouds dazzle Dhaka
- Bangladesh, Poland agree to work on migration and maritime economy sectors
- Saudi Arabia restores perks to state employees, boosting markets
- Jatiya Party presidium member Bablu marries Ershad’s niece
- Bangladesh to introduce rota virus, HPV vaccines in 2018
- Beware of dengue, chikungunya in intermittent rains
- Chevron announces sale of Bangladesh operations
- Man beaten to death in front of Dhaka’s Sakura bar