Consultant Insight: COVID-19 driving interest in drones as a last-mile delivery option

[caption id="attachment_69752" align="alignright" width="298"] Cathy Roberson, Cargo Facts Consulting senior consultant and Air Cargo World columnist[/caption] “We're about to see the Golden Age of drone delivery,” according to a World Economic Forum headline . Indeed, judging by the number of articles on drones appearing in my inbox daily, the WEF may be onto something. Society has begun to see the benefits of drones, the forum noted, and that is driving increased adoption. In the COVID-19 environment we all are living in now, e-commerce growth is on the rise and stressing last-mile delivery networks. E-commerce expectations for the rest of this year are double-digit increases, and market research company eMarketer predicts an 18% increase in e-commerce sales while total U.S. retail sales, which include auto and fuel, will drop by 10.5% this year. Here in the U.S., where there are limited options for last-mile delivery services, drones are becoming a viable option. Indeed, the use of drones to help ease stressed last-mile delivery networks may be possible in some locations. For example, U.S. supermarket chain Rouses Markets plans to test an unmanned grocery delivery service with drones. Partnering with Deuce Drone, Rouses Markets will try drone shipments directly from its test store, utilizing the store as a fulfillment center. “Drone delivery offers the fastest, safest delivery store to door,” according to Rouses Markets. “We should be able to get groceries to customers in 30 minutes, or even less. Plus, it is more cost-efficient, meaning we can save customers time and money.” In "Retail Deliveries by Drones: How Will Logistics Networks Change?" a recent paper by two professors, the consensus was that “drone technology will disrupt and change the face of last-mile logistics and delivery networks.” At the same time, the professors caution that an increase in demand for drone deliveries may result in retailers increasing the number of delivery centers and thus establishing decentralized networks, which could lead to “congestion in the skies.” Still, the paper notes that drones’ faster delivery speeds are beneficial only when paired with additional delivery centers, as more delivery centers lead to faster delivery. As interest grows, the drone delivery trials will increase here in the United States. UPS and CVS, for example, have already partnered to use drones for prescription deliveries. Residents of The Villages in Florida, one of the country’s biggest retirement communities, receive deliveries fulfilled by a local CVS store. The drones drop the prescriptions at a central location, where a UPS Flight Forward employee delivers them by golf cart to customers. Meanwhile, FedEx has partnered with Walgreens and Google’s parent company Alphabet to deliver health care products, food and more to residents of the town of Christiansburg in southwest Virginia. The World Economic Forum believes that drones have become an important tool in fighting the COVID-19 pandemic, helping to create more resilient supply chains and socially distanced delivery services. But, integrating drones into supply chains will require collaboration and drive. This supply chain collaboration will include supply chain partners and must also receive the blessing of the U.S. Federal Aviation Administration (FAA). Thankfully, the FAA seems to have awakened to the benefits of drone deliveries and is loosening restrictions for trials. In late 2019, the FAA published plans to establish a marketplace of drone vendors; manage the drone ecosystem through assigned identification; and collect and manage relevant data. Before the FAA could create this marketplace, it selected the following companies to help establish technical requirements and standards: Airbus, AirMap, Amazon, Intel, One Sky, Verizon’s Skyward, T-Mobile and Google’s Wing. This is absolutely a good start, but the FAA will need to step up its efforts to establish guidelines and procedures, particularly as the number of trial requests continues to grow, the number of drone startups increases, and the traditional last-mile network struggles to meet rising demands.

Consultant Insight: COVID-19 driving interest in drones as a last-mile delivery option

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