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is not intended as an immediate profit maker. Drone technology is compelling to Amazon not because it is lucrative but because it can offer incredible delivery speeds. Amazon Prime customers currently enjoy an impressive 2-day delivery; the advent of drones could potentially reduce this delivery time to 30 minutes. Many customers would certainly be willing to pay the extra delivery cost for such convenience. Furthermore, according to a report by ARK Invest, if we were to see Amazon fulfilment centres become more ubiquitous the company could earn a 50% return on its investment in drone infrastructure while offering same-day delivery that is “significantly cheaper than current alternatives”.
Regardless of these speculative projections it is still hard to see how couriers and home delivery providers will overcome the obstacle of regulation if they intend to rollout drone technology in their service. For instance, despite the optimism amongst experts in the American drone industry, the Federal Aviation Administration currently requires companies with exemptions, like Amazon, to have an operator with a pilot’s license to keep each drone within line of sight – such a mandate is a far cry from any economical solution.
If we really want to get excited about drone delivery we need to go back to Dun Laoghaire and take another look at Belle Moore’s experiment. The true reason for optimism is not that we may soon be able to deliver pizzas fifteen minutes quicker but that we can now deliver essential emergency supplies to inaccessible places with relative ease. The most compelling example of this is an experiment which took place in Lesotho in Africa where drone start-up Matternet set up a prototype drone network in Maseru, the capital of the county.
Poor infrastructure in Lesotho means there are few paved roads and transporting items is difficult – one way of circumventing that is with drones. With one in four adults in the country HIV positive Matternet’s goal was to deliver blood samples from clinics to hospitals where they could be analysed for HIV/ AIDS. Blood samples were the perfect cargo for the drones – small, light, valuable and time-sensitive. Also, Maseru has little air traffic and the routes from the clinics to the hospitals did not change so most of the process could be automated and the drones flew without a human pilot and had clear landing areas where they recharged automatically. According to Matternet CEO Andreas Raptopoulos the Maseru network successfully covered an area of 90 km2 with the drones taking 15 minutes to fly 4.4 pounds of cargo 6.2 miles. Each delivery cost just 24 cent. Matternet later employed the same technique in Haiti where they delivered crucial supplies (and chocolate!) via drone after the earthquake.
Like Ireland, the first legal delivery in the United States by drone was to transport medical supplies. Both flights demonstrates two aspects of the future of drones and air freight: that technology is not the limiting factor, and that the most obvious appeal of drones is not personal deliveries. Federal Aviation Administration has banned commercial drones in the US, and while the agency increasingly grants exemptions, Flirtey, a startup that provides healthcare in rural and underserved areas, is the only freight exemption that allows a real delivery rather than testing in unpopulated areas. The first drone deliveries will likely follow the Flirty model for some time. In open skies, away from built up areas, there isn’t much need for strict regulation.
Andreas Raptopoulos, the CEO of Matternet, points out that many of the companies currently developing drone technology are ignoring the drones’ best feature: they go where there are no roads. During a TED talk in 2013 Raptopoulos highlighted
that, “one billion people in the world today do not have access to all-season roads. We cannot get medicine to them reliably, they cannot get critical supplies, and they cannot get their goods to market in order to create a sustainable income.”
For the Matternet team, the most interesting question was not the cost per delivery. They wanted to compare the cost of the drone network to the cost of building the roads Lesotho so badly lacks. When we consider drones in this light the “milk-run” comparison doesn’t even apply. Comparing a drone network to roads that can transport buses, delivery trucks, and bulldozers is not an apples to apples comparison. But given that building and maintaining roads is a long and expensive process, drones could offer a quick and cheap way to (imperfectly) connect the billion people cut off from most of the world.
Drones are in a situation similar to the one faced by self-driving cars. Companies have demoed the technology, so the real obstacle is the legal and regulatory environment. In both cases, this means integrating the technologies into daily life could take a long time – or it could happen very quickly. Current drone economics are good for deliveries that take less than one hour. Are people willing to pay a major premium for the service? Perhaps. It would certainly be a welcome relief to many Christmas shoppers.
Despite the current inability of drones to match the efficiency of a delivery truck’s milk run, the economics of delivering air freight by drone seem compelling. That’s why Amazon and Google are investing in the R&D. That’s why Matternet has begun to test drone deliveries with Swiss Post and Swiss World Cargo. And that’s why the drone community expects deliveries to happen – even if current regulation makes that prospect seem unlikely.
In the meantime, drone deliveries will probably get their start in remote areas like Lesotho, or in use cases like surveying construction sites, or aerial photography, or what we saw in Dun Laoghaire in January; flying emergency medical supplies from the Irish coastline to boats at sea. It is still very early days for this technology, but it is getting off to a flying start.
UNICEF trial a UAV delivery system to reduce waiting times of infant HIV tests in Malawi. Image Credit: UNICEF/Khonje
The Chartered Institute of Logistics & Transport 43
DRONE DELIVERY