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Supply Chain News: Penetration of Drones for Parcel Delivery will Take Long Time, New Study Finds

 

Press Touts Study Predictions, but Reality is a Forecast of Slow Growth

Feb. 16, 2021
 

It was all the way back in 2013 when then Amazon CEO Jeff Bezos told 60 Minutes Viewers that Amazon was developing drone delivery capabilities for its parcel shipments, and indicated that future was not all that far away.

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It also remains to be seen whether people will tolerate numerous drones flying over the above their neighborhoods.

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Fast forward to 2021, and commercial drone deliveries are just starting to literally get off the ground, hampered by severe regulatory restrictions – recently relaxed for some by the FAA – and perceived issues with safety, noise and even cost effectiveness. (See Get Past the Hype of Delivery Drones, MIT Professor Says.)

Now, a new study from UK firm L.EK Consulting predicts slow penetration of drones for parcel delivery – which most media outlets are instead positioning instead as showing rapid adoption. "The benefits of drones in terms of mobility and costs will turn the world of parcel delivery upside down," one web site wrote.

Not exactly.

The LEK report estimates that by 2040, drones will be used for about 30% of parcel deliveries – meaning 19 year out, 70% of parcels will still be delivered by truck/van – not exactly a sea change considering it will take just shy of two decades to reach even that level.

"Drones aren't likely to replace traditional trucking but will add to existing logistics systems to avoid congestion," LEK says.

Another barrier – for now at least - is payload capacity.


When Amazon presented its first delivery drone to the public at an automation conference in Las Vegas in 2019, it said that after working for years to develop drones to deliver packages, its new drone could transport orders of up to 2.5 kilograms over a distance of 10 kilometers.

That's only about five pounds per parcel delivery and a six-mile delivery range, limiting drone applicability compared to many potential use cases.

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LEK notes that while drones undoubtedly offer many benefits, their adoption will depends on exactly how much cost they can cut versus truck deliveries, and how easily shippers will be able to make the transition to the sky.

There are also several legal obstacles, including privacy laws and complicated air traffic regulations that coulf delay the introduction of the delivery drone in in many countries. It also remains to be seen whether people will tolerate numerous drones flying over the above their neighborhoods.

Nevertheless, Amazon and Chinese ecommerce giant JD.com have both talked up the prospect of deploying drones for deliveries on a large scale – it just may take them 20 years to get there.

Do you see the drone delivery glass as half empty or half full? Let us know your thoughts at the Feedback section below.


 
 
 
 
   

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