The state of delivery services in 2023
Since the start of pandemic, the delivery services have expanded to unprecedented scales. Whether it’s by car, motorcycles or bicycles, you stumble upon them in the traffic every once in a while.
But how often do customers use this convenience precisely?
Let’s look into some of the most recent delivery stats worldwide, drone delivery included:
- Food delivery global market was valued at $150 billion in 2021, which is triple in size than in 2017. (McKinsey)
- One survey showed that half of all US respondents used the food delivery option in the past 90 days, with 63% of them being at the age of 18-29. (Zion & Zion)
- In 2022, there were already around 2,000 drone deliveries occurring daily. (McKinsey)
- 60% of online customers said they’d be willing to pay extra to receive their packages using autonomous delivery robots. (College of Engineering CMU)
How are drones being used for deliveries?
The first company to show off this technology was Amazon, with its Prime Air project debuting in 2013, without commercial success.
Ten years later, they are continuing the project, considering that the world is now picking up on the idea of drone deliveries. The technology has matured and become more sophisticated, making drone deliveries more accessible, with countless unmanned aerial vehicle options available.
What made it widely accepted is its possibility to reach otherwise inaccessible locations, delivering necessities to those in need.
However, the most profitable is its commercial use, with millions of customers enjoying the convenience of this technology, possibly as a consequence of the habits developed during the pandemic.
So, how do drone deliveries work?
Don’t be disappointed when you learn that it works very similarly to regular deliveries – apart from a real human coming to your door.
The name itself suggests it – An unmanned aerial vehicle (UAV), commonly known as a drone, is an aircraft without any human pilot, crew, or passengers on board. But, of course, there are humans overseeing the delivery – remember this, for we will elaborate it in the paragraph covering possible risks.
What may surprise you, however, is the fact that drones don’t actually land on your doorstep but rather stay airborne. As it turns out, this way minimizes safety problems and eliminates extra noise.
Moreover, they include safety features such as return-to-home behavior if the problem occurs.
For customers who live in areas covered by drone deliveries, this functionality is mostly integrated within the delivery service they already use. Otherwise, they’ll have to visit the website or the app of the company providing the service.
What are the benefits of drone delivery?
There are quite a few benefits to drone deliveries, with some of them being:
- Immediacy – Drone deliveries usually don’t take more than 10 minutes, which is incomparably faster than human delivery.
- Eco-friendly – It reduces traffic and cuts carbon emissions by 84% compared to a diesel truck and 31% less than electric vans.
In addition, it allows businesses to reach new customers since they won’t be as dependent on location and travel costs.
Now, developing a certain technology, service or a product in a responsible way means that there has to be more than satisfying commercial needs.
The same goes for drone deliveries, which proved to be of a crucial importance when it comes to delivery of blood and vaccines in Rwanda, for example.
A drone delivering blood transfusions is a lot simpler and cheaper than paving roads in remote areas. And a study in The Lancet found that blood deliveries by drone in Rwanda often were faster than traditional delivery in the US and that blood products at hospitals expired 67% less.
Source: CNET
As a matter of fact, Zipline has closed a deal with Rwanda’s government to provide them with 2 million more drone deliveries by 2029. This startup has been delivering medical products and blood supplies to Rwanda for seven years already. Over time, Zipline expanded its business to Nigeria and Ghana as well.
What are the risks with drone delivery?
There are always risks, of course.
When it comes to drone delivery, these are the most important issues that companies are tackling right now:
- Privacy;
- Noise;
- Safety;
- Cluttered skies.
All of them are self-explanatory and each is equally important.
What’s more, people who are not using this service could feel uncomfortable with these many UAVs flying around, especially those who are sensitive to sounds, or those who have experienced massive surveillance in countries such as China or strongly object it.
To address those issues, companies such as Amazon promised to talk to citizens in covered areas and take their feedback into consideration. We’ll see how that plays out.
So far, there’s only been one huge incident regarding this topic, when a drone by the company Wing landed on top of power lines of 11,000 volts and caught fire, leaving more than 2,000 people in Australia without electricity.
Now that we’ve covered the most important risks, let’s take a look a possible major disadvantage.
Remember when we mentioned that humans need to be overseeing the drone?
Well, as it turns out in most countries, regulations state that a pilot can only operate and monitor only one drone at a time. This could represent a huge problem for operational costs, as McKinsey reports:
As presented, the biggest cost with this model is labor (95%), which means that drone deliveries may not be as efficient as possible.
So, how many drones would an operator need to navigate in order to satisfy the efficiency standards according to this research?
At least 20.
That way, a single delivery would cost the company around $1.50-2. Everything below 20 UAVs can’t really be considered as a true optimization of the delivery process.
The most popular drone delivery startups
Startups worldwide are diving into this emerging field, young yet very competitive. Not surprisingly, many of them are based in the USA.
Below, we’ll list some of the most popular and/or innovative ones:
- Zipline
- Wing
- Drone Express
- Matternet
- DroneUp
- Manna
- Amazon
- FlyTrex
Apart from the aforementioned companies, established names are also planning on expanding their services to drone deliveries as well. This includes DoorDash, Walmart, and Kroger.
Now, the delivery fee varies from company to company, but it’s mostly somewhere around $4-5.
How realistic are drone deliveries in the future?
Further development of drone delivery services is closely related to legal framework within each country and if its airspace regulation permits drones.
However, if this service proves to be highly efficient and widely accepted worldwide, it could force individual governments to loosen their laws around UAVs and make larger-scale, automated flights more feasible.
So, for it to happen, the following preconditions need to be established:
- Technology needs to advance in terms of drone autonomy;
- Regulations need to evolve, allowing more operators to pilot the drone remotely.
Finally, drones have already proved their value in science, renewable energy, geology, and agriculture so it’s only natural to explore their further potential. And, considering how used we got to the immediacy of deliveries, it’s clear that the logistics and the environmental impact need to be taken care of differently.
Maybe drone deliveries are the solution?
