Home Daily Blitz UPS Tests Drone Deliveries, Eyes Future Price Changes

UPS Tests Drone Deliveries, Eyes Future Price Changes

A drone demonstrates delivery capabilities from the top of a UPS truck during testing in Lithia, Florida, U.S. February 20, 2017. REUTERS/Scott Audette

The following is an excerpt from Luciana Lopez | February 21, 2017 | reuters.com |

Package delivery company United Parcel Service Inc said on Tuesday 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.

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 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.

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