Drone drop off for ‘last-mile’ delivery: How much? Would you use it?

The industry is poised to soar at a rapid clip. Dubai-listed Aramex recently joined leading global players in drone deliveries.

Service on trial

On Tuesday (February 14, 2023), Dubai-listed courier company Aramex tested its drone drop-off delivery and roadside bot in Dubai.

Using leading-edge GPS navigation system to create virtual maps, create various routes, and alter course in response to delays or impediments, the drones are powered by multidirectional sensors.

Behind the scene, a fleet management system helps take orders, manages dispatch, plans drone flights and delivers packages with great accuracy, according to Aramex.

The trials, dubbed a success, was carried out at the Rochester Institute of Technology (RIT) in collaboration with Kiwibot, a delivery robots company, and BARQ EV, a commercial drone delivery service provider in the UAE.

It’s an example of quick delivery service seen growing, thanks to key enablers. At the recently-concluded World Government Summit (WGS) 2023 in Dubai, drones were dubbed as a cost-effective delivery solution, and eco-friendly, too.

Investments 

Several teams are actively exploring ways drones for courier service. Investments in this area continue to grow. Innovations in drone delivery services are developing at a fast clip, driven by private companies.

Governments are developing regulations to support and regulate the use of drones for commercial purposes. Where these two factors are robust, the era of drone deliveries could flourish sooner than later.

In the Aramex trial, the Dubai Civil Aviation Authority (DCAA), Roads and Transport Authority (RTA), Dubai Silicon Oasis Authority (DSO), Dubai Future Foundation, and Dubai Smart City provided assistance for the tests.

“The expansion of our Future Delivery Program in the UAE is a testament to our drive to be at the forefront of last-mile delivery logistics and generate more value for our customers by providing a faster, safer, and greener means of delivering packages,” said Alaa Saoudi, Chief Operating Officer - Express at Aramex.

What the numbers show

The numbers are encouraging — and equally daunting. There were 159 billion parcels shipped worldwide in 2021, according to Pitney Bowes. The figure more than tripled in the previous seven years.

Last month (January 2023), US drone company Zipline, which is working with retail giant Walmart, has reported already making 500,000 deliveries by battery-powered autonomous drones to customers.

Dozens of Walmart stores now offer drone delivery in the US.

DroneUp, the largest drone delivery operation in the US, has also partnered with Walmart. There are 36 Walmart locations offering drone delivery today, 34 of which are DroneUp Hubs (in 6 states — Arizona, Florida, Virginia, Texas, Utah, and Arkansas), the company told Gulf News.

It’s a drop in the ocean. But with regulatory support — and weather permitting — it could significantly scale up. And with the pandemic-induced spike in demand for contactless delivery, drone drop offs have emerged as a viable option.

In Ghana, Nigeria and Rwanda, drones have been used to deliver essential goods such as blood, food, vaccines/medicines and personal protective equipment to remote or hard-to-reach areas.

Industry soaring

Several drop off trials have been carried out — or are planned.Major companies are currently investing in drone delivery, including Amazon, Google, and UPS, among others.

Industry officials cite several growth factors for drone delivery tech: geographical location, regulatory environment, market demand, and technological advancements.

A report published by ResearchAndMarkets.com valued the global drone delivery market at $528.34 million in 2020, and expected to grow at an compounded annual growth rate (CAGR) of 21.01 per cent till 2028.

Another report by Grand View Research projects the global drone package delivery market to reach $7.63 billion by 2027, at a much higher CAGR of 48.8 per cent.

These estimates are mere projections — actual growth may vary from pace to place, depending on market dynamics and other factors.

Challenges

There are speed bumps ahead that need to be addressed before drone delivery becomes a viable option for last-mile delivery.

Some of the challenges:

Cost: The cost of implementing a drone delivery service can be high, as companies need to invest in drones, infrastructure, and personnel to operate and maintain the service. For the operators, this can make it difficult to achieve profitability in the short term.

Regulatory issues: It’s one of the biggest challenges. There are many regulations that need to be followed for the safe and legal operation of drones, which can be different in different regions and countries. Companies need to comply with these regulations to operate their drone delivery services.

Weather conditions: Drones are sensitive to weather conditions — strong winds, rain, snow, and fog, which can affect their ability to fly and navigate safely. This can cause delays and disruptions in the delivery of goods.

Navigation and collision avoidance: Drones need to navigate through complex urban environments, avoiding obstacles such as buildings, power lines, and other drones. They also need to avoid collisions with other drones and objects to ensure safe delivery.

Payload and range limitations: Drones have limited payload capacity and range, which can limit the size and weight of goods that can be delivered, as well as the distance they can travel. This can affect the efficiency and scalability of drone delivery services.

Security and privacy: Drone delivery can raise security and privacy concerns, as drones can fly over private property and capture images and videos. Companies need to ensure that they have proper security measures in place to protect the goods being transported and the privacy of individuals.

However, while there are challenges to implementing drone delivery for last-mile delivery, advances in technology and improvements in regulatory frameworks are making this a more viable option for the future of logistics.

Leading the charge

There are several leading drone delivery companies that are currently offering or testing drone drop-off services. Some of the notable ones include:

Aramex:

The Dubai-listed courier company successfully tested drone drop offs and roadside bot in Dubai on Tuesday (February 14, 2023). The test was carried out at the Rochester Institute of Technology (RIT) with Kiwibot and BARQ EV, a commercial drone delivery service provider in the UAE.

Amazon Prime Air:

Amazon's drone delivery service is still in development, but the company has been actively working on developing the technology and has conducted numerous tests in different locations. Amazon's drone delivery service aims to deliver packages weighing up to 5 pounds within 30 minutes of order placement.

DroneUp:

DroneUp, one of the largest drone delivery operations in the US, has partnered with Walmart, which has 36 locations offering drone delivery today; 34 of which are DroneUp Hubs (in 6 states — Arizona, Florida, Virginia, Texas, Utah, and Arkansas), according to the company.

UPS Flight Forward:

UPS has been working on developing its drone delivery service, known as UPS Flight Forward, since 2019. The company has partnered with Matternet to conduct drone deliveries of medical supplies and samples on a hospital campus in North Carolina.

Wing Aviation:

Wing Aviation is a subsidiary of Alphabet, Google's parent company. The company has been conducting drone deliveries in various locations, including Australia, Finland, and the United States. Wing's drone delivery service can deliver goods weighing up to 3.3 pounds to customers within minutes.

Zipline:

Zipline is a drone delivery company that specializes in delivering medical supplies, such as blood and vaccines, to remote areas. The company has been operating in Rwanda since 2016 and has expanded to Ghana, where it has been delivering COVID-19 vaccines to remote areas.

Flirtey:

Flirtey is a drone delivery company that has been conducting tests of its technology in various locations. The company has partnered with various companies, including 7-Eleven, to conduct drone deliveries of snacks and other goods.

Flytrex:

The company is tesing the use of autonomous drones for last-mile delivery of groceries and household essentials alongside use retail giant Walmart. In 2020, they announced a partnership. The pilot program was launched in Fayetteville, North Carolina, and it involved delivering select items from Walmart stores to customers' homes.

A peek into the future

In the era of snail mail, e-commerce is difficult of imagine. In the era of horses, there was no need for freeways. In the era of drones, however, a quick last-mile delivery isn't hard to conceive.

The reason: drones offers a more efficient, inexpensive and are a faster way to move goods, especially over short distances. Some potential developments that could shape the future of drone delivery:

Expansion of drone delivery services: As more companies invest in drone delivery technology, it's likely that we'll see the expansion of these services across different industries and geographies. We can expect to see drone delivery being used for everything from food and grocery deliveries to medical supply transportation.

Increased efficiency and speed: Advances in technology, such as longer flight times, faster speeds, and improved navigation systems, could make drone delivery even faster and more efficient than it already is.

Integration with other technologies: Drones could be integrated with other technologies like autonomous vehicles and robotics, making the delivery process even more seamless and efficient.

New business models: Drone delivery could lead to the emergence of new business models, such as subscription-based services, where customers pay a fee to have their goods delivered by drone on a regular basis.

Improved sustainability: Drone delivery has the potential to reduce carbon emissions and improve sustainability, as it eliminates the need for traditional delivery vehicles, which can be a significant source of pollution.

Further development of regulatory frameworks: As drone delivery services become more common, regulatory frameworks will need to be developed to ensure the safe and legal operation of these services. This could lead to changes in airspace regulations and licensing requirements for operators.

Overall, the future of drone delivery looks promising, with the potential to revolutionise the way goods are transported and delivered. As with every industry, there will always be challenges. The biggest of which is public acceptance. If it's the way the people want their goods delivered, and regulators facilitate the process, it may not be long before drone drop-offs become a ubiquitous part of our daily lives.