UPS (NYSE: UPS) announced a series of new initiatives, partnerships and products on Wednesday. The delivery company's plan is to upgrade its global logistics networks to modernize its business with more innovative and autonomous technologies.
Waymo
At the top of UPS's announcements was the company's newfound partnership with Google's (NASDAQ: GOOGL) autonomous car company Waymo. UPS is planning on testing self-driving car technology with Waymo's testing facilities in Phoenix, Arizona.
As part of the collaboration, Waymo's Chrysler Pacifica (NYSE: FCAU) minivans will be taking short drives delivering packages from UPS store locations to nearby sorting facilities. The vehicles will have a Waymo-trained driver on board to monitor the car's operations for safety.
The two companies plan on extending into a long-term partnership following the results of the testing.
Arrival
UPS Ventures, the company's venture capital branch, announced that it will begin investing in the technology company Arrival. Arrival has created Generation 2 Electric Vehicles--vehicles that surpass existing electric vehicles in cost, design and efficiency. Along with the investment, UPS announced a commitment to purchase 10,000 electric vehicles to be built for the delivery company.
The pair plan to develop a wide range of electric vehicles with Advanced Driver-Assistance Systems (ADAS). This technology is designed to increase safety and operating efficiency for self-driving cars. UPS plans to test ADAS features later in the year.
Drones
On top of innovations for automated vehicles, UPS announced the expansion of its drone operation, UPS Flight Foreword, into the healthcare sector. The company is working with Henry Schein, a global distributor of medical and dental supplies, focusing testing the delivery of essential healthcare products for shipments where traditional transportation may be less efficient, like remote communities or area impacted by natural disasters.
UPS's drones have been approved by the Federal Aviation Administration to operate over people, at night and out of the operator's line of sight. The company was initially approved to operate a delivery program with WakeMed Hospital in Raleigh, North Carolina.
The company also announced that it is expanding its services to the University of California at San Diego Health. Launching in February, UPS will be partnering with Matternet on a drone program that will be use to transport medical supplies between health centers and labs.
New Facilities and Programs
UPS announced a commitment of approximately $1.4 billion to facility enhancement and automation in Pennsylvania as part of the company's major capacity expansions in 2020. This expansion plan is in part to bring more automated sorting to the company's warehouses. The company is planning a new "super hub" in Harrisburg, as well as new highly automate package operations in Carlisle, Lehigh Valley and Philadelphia.
UPS is more than halfway through a three-year strategic investment in global network enhancements. Once complete, the company's new automated facilities will drive 30-35% improved productively when compared to manual processing. By 2022, nearly all eligible packages will be sorted with automated technologies.
The company is also issuing a new generation of it On-Road Integrated Optimization and Navigation (ORION) platform. The latest version includes Dynamic Optimization which recalculates individual package delivery routes to account for traffic conditions, as well as changing pickup times and delivery orders.
UPS also announced a new partnership with Square (NYSE: SQ) for the company's Digital Access Program, which will allow merchants access to UPS services.