Drone Delivery: Benefits, Obstacles, and the Future of the New Ecommerce Trend

According to The Washington Post, during the pandemic period, the volume of parcel deliveries reached 70% in comparison to the 5% that it normally accounted for before Covid. And given that 70% of consumers expect their packages to be delivered on the same day, it completely explains why drone delivery has become a hot topic.

The same-day drone delivery even to the most remote places sounds exciting. And yet, the trend seems far from being a reality.

Why is that, which retailers take advantage of it, and what are the legal implications of last-mile delivery by drones — scroll down to find answers to these questions.?

What’s the fuss with the drone delivery trend?

Back in 2016 The Federal Aviation Administration (FAA) – a US legislative body responsible for air traffic regulation – predicted that by 2020 there will be 7 million drones flying in the sky. However, it wasn’t until this year that giants like Amazon and Zipline got the FAA approval for using drones for delivery purposes. It took years for Amazon to develop and test the technology and even after a rigorous FAA approval process, first deliveries are about to start only by the end of 2022.

That raises a question in my head: are drones overrated?

Not really, it’s just that the fast-paced world we live in still promotes instant gratification. If the trend isn’t on now, it’s not working. But that’s not true. To boost the website performance fivefold, migrating to a new ecommerce platform might be enough; but with delivery, things are much more complicated.?

Drone delivery market overview

Drone delivery is a model that can be a retailer’s answer to consumers’ high expectations. Modern drones can fly at the pace of 50 miles per hour and still be 90% cheaper than their on-land alternative – delivery trucks.

Despite many benefits associated with drone package delivery – lightning-fast speed, low cost in comparison to car delivery, and access to remote areas – the projected huge growth of this market stumbles upon the national regulations or rather a lack of thereof.

For now, only four major U.S. giants have received the FAA certification – Wing Aviation LLC, UPS Flight Forward, Amazon, and Zipline, meaning that it will take another few years for other smaller companies to be accredited and to form a competitive market.

For comparison’s sake, Europe seems to be far ahead in terms of regulations for the commercial use of drones. Manna, an Irish delivery company, has been performing from 2,000 to 3,000 deliveries per day since 2019. Having less ambitious plans than Amazon with its 55lbs delivery, Manna started operating within the limits of a 40,000 people city delivering coffee and fresh pastries. And now, it’s the primary drone delivery company in Ireland. Start small and scale fast, as I say.?

The prospects of drone delivery in the nearest future

For now, I see two primary reasons for the slow adoption of the drone delivery trend:

1. The drone delivery ecosystem is still in its evolutionary stage with high operational costs and the ongoing development of drones capable of carrying heavy weights. Plus, strict flight limitations and a long-lasted lack of government regulations pose a significant impediment to drone delivery development.
2. Consumers report a relatively low level of readiness for such type of technology varying from country to country. For instance, only 14% of German respondents say that they were ready for drone delivery in comparison to 22% in the United States.?

Such numbers may seem a bit shocking in the digital era of today. But actually, only a few years ago even online shopping was a matter of concern for a lot of people, so I do hope the demand for contactless delivery systems across supply chains will grow.

After all, drone delivery might bring so many benefits to the industry and the social initiatives in the world, like countering climate change or faster response to the consumers’ needs. For now, only a few retailers are capable of hopping on the trend because the market threshold is still high for ordinary ecommerce companies.?

But I’m positive that one day, drone delivery will become a golden industry standard to pave the future of last-mile delivery.

A full article with more insights and numbers can be found here: https://www.datadriveninvestor.com/2022/08/03/drone-delivery-benefits-obstacles-and-the-future-of-the-new-ecommerce-trend/#?

Let me know your thoughts on drone delivery in the comment section below: do you think its pros outweigh the cons?

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