Unmanned aircraft systems, commonly known as drones, are becoming increasingly popular in modern logistics operations. Delivery drones transport medicines, parcels, groceries, food, and other homecare products. These drone delivery operations are gaining widespread importance in last-mile delivery given their accuracy, environment-friendly operations, shorter delivery time, and lower operational cost than traditional delivery channels. [i]As per analysts, the operating costs for a drone delivery service are 40% to 70% lower than a vehicle delivery service model. Additionally, the COVID-19 pandemic has further accelerated the requirement to look for alternative, safe, and contactless delivery models. This has led to an upsurge in the global demand for drone delivery services.
Drone industry overview
Drones were initially introduced as military/police equipment and were used primarily for surveillance and monitoring against any targeted attacks. The application and usage of this technology have since evolved to include various other labor-intensive and complex tasks across industries. These include identifying defects in oil/gas pipelines, checking the health of crops, identifying hotspots in fire situations, surveillance for mining and construction activities, cinematography, delivering packages, etc.
Adoption of drones in the retail and logistics industries
The retail and logistics industries invest in and leverage drone technology to implement alternative and scalable delivery models. Major industry players like Amazon, UPS, DHL, Walmart etc., have already introduced drone delivery services on their platforms. The industry is also supported by specialist drone delivery operators and technology providers like Wing, Zipline, and Matternet. The size of the global drone package delivery market is estimated to reach USD 8 B by 2027[ii], at a significant CAGR of 41.8%.
“Gartner predicts that in 2026, more than one million drones will be carrying out retail deliveries, up from 20,000 today.[iii]”
Countries leading the adoption of drone delivery are:
1. Asia - China and Japan for parcels and shipment.
2. Africa - Remote areas in Rwanda and Ghana for medical supplies and test samples.
3. Oceania - Australia and Vanuatu for food, personal, and home care products.
4. Europe - Finland, Iceland and Switzerland for food, medicines, and other retail products.
5. America - Multiple states in the US and Canada for various packages.
Drone delivery operations
The drone delivery ecosystem includes multiple stakeholders such as
1. National Aviation Authority (primary stakeholder for any aircraft traffic management operation)
2. International Civil Aviation Organization
3. Drone owning company/ drone service provider
4. Drone pilots (the remote pilots who will be flying the drones)
5. Ground support team (manages drone launch pads and the loading and unloading of packages)
6. UAS registration system (includes capabilities of registration, and including operator and pilot information)
7. UAS traffic management system (UAS and operator identification, UAS traffic flow management, airspace management, flight operation management, metrological, spatial and obstacle info management, etc.)
8. Drone manufacturers (companies that build the UAV/drones)
9. Technology providers (provide various offerings like mission planning and altitude authorization, drone flight planning, real-time drone flight telemetry, and automated flight log tracking, instant airspace authorization, drone identification, and tracking, etc.)
Figure 1 provides a bird’s eye view of drone delivery operations.