Drone Doorstep Deliveries – Technology is NOT Living upto the Hype

With the strong expansion of online retail during the last decade, the biggest firms involved in the online retail value chain begun to focus on improving their efficiency by perfecting their logistics chains. Especially, the tasks of handling and shipping, which have been seen as both a cost-burden and inhibitor for the growth for online retail, have urged online retailers and postage companies to innovate, finding new, more efficient ways to perform them.

The technological evolution on the field of unmanned aerial vehicles (UAV) has pushed the idea of shipping goods as one of their potential uses. Moreover, the significant investment in drones has been based on the ambitious assumptions that drones can be more efficient, delivering at considerably lower costs, higher speed, and with lower carbon footprint than conventional deliveries with a van and a driver. Nonetheless, the economics of delivery services are too complex to provide a clear cost advantage to drone deliveries.

Key Highlights

– The main developers of drone delivery services worldwide which include Amazon, Google, FedEx, UPS, DHL, Rakuten and JD.com, have drone delivery operations up and running, but their scale remains limited to pilot stage due to lengthy and strict regulatory processes or in other cases it is focused only on certain last-mile delivery areas where drone delivery is the last option. In both cases, online retailer and delivery providers appear to be either far from widely adopting drone deliveries, or they do not even aim for it.

– In fact, it is safe to say that the aspirations for revolutionizing the future of logistics with drone deliveries, especially in urban centers, has turned into hype; that is because these claims cannot be realized at present given regulatory hurdles and many technical issues that have not been worked out or have been overlooked, so that the potential of drones for logistics services has not been realistically assessed.

– With the strong expansion of online retail during the last decade, the biggest firms involved in the online retail value chain begun to focus on improving their efficiency by perfecting their logistics chains. Especially, the tasks of handling and shipping, which have been seen as both a cost-burden and inhibitor for the growth for online retail, have urged online retailers and postage companies to innovate, finding new, more efficient ways to perform them.

Scope

– Learn how drones are being used in business

– Understand what the hopes for drone deliveries are

– See how some of the these expectations cannot be met

– Understand what solutions are likely in future

Reasons to buy

- What is the hope for drones in business?

- What are the main problems with drones and the expectations of them?

- How can progress be made without drone solutions?

Table of Contents

Table of Contents

1. OVERVIEW

1.1. Catalyst

1.2. Summary

2. THE RATIONALE BEHIND THE DRONE DELIVERY HYPE

2.1. Ambitions for wide adoption of drone deliveries are biased on the need to achieve cost-savings

2.1.1. The cost advantage of drone deliveries is overestimated

2.1.2. A range bias overestimates drone delivery potential

3. DRONE SERVICE DEVELOPMENTS ARE FAR FROM WIDE ADOPTION

3.1. Drone delivery services still at pilot stage

3.1.1. Google’s Wing and FedEx

3.1.2. UPS Flight Forward

3.1.3. DHL Express and Parcelcopter drone service

3.1.4. Japanese Rakuten and China’s JD.com and parcel drone delivery service

4. SLOW REGULATORY PROGRESS AND UNSOLVED TECHNICAL ISSUES PROVE DRONES’ LIMITED POTENTIAL

4.1. Slow progress on meeting regulation requirements continue to hinder wide deployment of drones

4.2. Lack of consistency on fundamental navigation solutions

4.3. Not every day is a sunny day for drones

4.4. Consumers’ concerns over reliability and safety of drones are valid

4.4.1. Accessibility of delivery zones and security risks, a major drawback

4.4.2. Safety risks to increase at large scale operation

4.4.3. Noise pollution, a crucial factor overlooked

4.5. The future of delivery services does not lie on air, but only for a few exceptions

5. APPENDIX

5.1. Abbreviations and acronyms

5.2. Sources

5.3. Further reading

6. ASK THE ANALYST

7. ABOUT MARKETLINE

List of Figures

List of Figures

Figure 1: Amazon Prime Air drone

Figure 2: Google’s Wing drone

Figure 3: UPS Flight Forward drones

Figure 4: DHL Parcelcopter drones

Figure 5: Rakuten’s Tenku drone

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