Consultant Insight: Last-mile drone deliveries grow

More and more, last-mile carriers are expanding their use of drones as they seek faster deliveries and less labor-intensive options.

Amazon Prime Air began operating drone deliveries in Lockeford, Calif., and College Station, Texas, on Dec. 22, 2022. The drone deliveries operate within four miles of delivery centers in each of the cities, according to Federal Aviation Administration (FAA) filing approvals.

Operations will be allowed only during daylight hours up to five days per week. In addition, the operating area in each city is divided into four sectors, with each sector having a maximum of 50 delivery flights per operating day. Only one aircraft in each sector can be airborne at any time.

[caption id="attachment_68221" align="alignright" width="366"] Cathy Roberson, Cargo Facts Consulting senior consultant and Air Cargo World columnist[/caption] Meanwhile, Walmart announced Dec. 15 that it expanded its drone delivery service into select markets in Texas, Arizona and Florida via its partnership with DroneUp.

In May, Walmart announced delivery-by-drone services to 34 sites by the end of 2022, providing the potential to reach 4 million households across six states — Arizona, Arkansas, Florida, Texas, Utah and Virginia — through DroneUp’s delivery network.

Walmart customers can order items weighing up to 10 pounds for a delivery fee of $3.99.

Participating Walmart stores will house a DroneUp delivery hub with a team of certified pilots operating within FAA guidelines. Once a customer places an order, the item is fulfilled from the store, packaged, loaded into the drone and delivered to the customer’s yard.

Walmart aims to build the capacity to deliver 1 million packages per year by drone.

Amazon and Walmart are not the only companies offering last-mile drone delivery services. Alphabet’s Wing provides such services to Walgreens, while CVS teamed up with UPS to deliver prescription drugs via drone to a Florida retirement community. UPS also delivers via drone to several U.S. hospitals. Meanwhile, FedEx has partnered with Elroy Air to develop its own drone service, including testing a 1,900-pound drone for delivering packages.

Europe adopts drone strategy The European Commission (EC) adopted Drone Strategy 2.0 on Nov. 29, which defines actions to be undertaken by 2030 to facilitate the deployment of drone technology in Europe. A study commissioned by the EU estimates that the drone sector could be worth 14.5 billion euros (US $15.3 billion) by 2030 and create more than 145,000 new jobs in member states.

The strategy put forth by the EC could serve as a template for other locations such as North America and, more specifically, the U.S., where the FAA has lagged in establishing clear and cohesive national rules and regulations for drone activity.

Drone deliveries rising More than 660,000 commercial drone deliveries have been made to customers worldwide over the past three years, according to consulting firm McKinsey. The firm forecasts close to 1.5 million deliveries in 2022, up from just under half a million in 2021.

See also: Flying forward: Integrating cargo drones beyond health care

Financial investment firm Ark Invest estimates the cost per drone delivery in the U.S. averages between 88 cents and 52 cents per package. It could benefit organizations struggling to attract last-mile workers or reduce last-mile costs for retailers interested in offering last-mile delivery services.

For retailers looking to offer fast last-mile delivery services, a survey from marketing firm Smarty found 48% of shoppers are willing to pay more for drone delivery if it means getting the items within an hour of order placement.