June 6

Drone Delivery: Predictions, Potentials, & Challenges

The development of drone technology has been rapid, taking only a few years to go from initial prototypes to a market filled with state-of-the-art innovations. Uncrewed aircraft systems are becoming more commonplace in logistics operations, given their increased accuracy over traditional delivery vehicles and environmentally friendly operation. Industry analysts have estimated that drone delivery services could be 40-70% cheaper than current parcel models for retailers.

Drones require less storage space and travel faster than existing trucks and vans. Furthermore, the COVID-19 pandemic strain has added pressure on companies to find more effective and safer delivery models. In response, drone sales have seen a boom in demand.

Industry Overview

Drones were initially used in the military, primarily for surveillance. However, they have been used in various other labor-intensive and complex applications. These include identifying defects in oil/gas pipelines, cinematography, checking the health of crops, surveying mining and construction areas, delivering packages to remote locations with minimal effort or human interaction needed or desired, and many more!

Drones' Use in Retail and Logistics

Automating delivery and transport of goods, particularly consumer goods (e.g., food, clothing, medicines), is expected to be a significant application of autonomous flying vehicles as one possible way of improving service quality/safety and cost, especially for low-frequency deliveries in areas with low population density.

Multinational logistics companies are investing in the development of commercial drone technology. Amazon, Zipline, DHL, and UPS have already entered this market, which is frequently cited as a major impetus for the industry's long-term growth. Gartner predicts that there will be one million retail drone deliveries in 2026.

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Watch the recording of our webinar “Connected Skies” to hear about drone laws, connected drones, drone delivery, and how drones are leveraging the power of mobile and satellite connectivity, and more.

Drone Deliveries Involve Many Stakeholders, Including

  • System for UAS registration (including operator and pilot information), along with registration capabilities
  • UAS traffic management system
  • Drone manufacturers
  • National Aviation Authority
  • International Civil Aviation Organization
  • Owners of drones or drone service providers
  • Drone pilots
  • Support team (manages launch pads and receives packages)

Challenges Facing Providers of Drone delivery

  • Scalable operations require skilled and experienced resources, which are in limited supply.
  • There are stringent regulations to keep track of issues such as altitude range, navigable airspace, weight, and privacy laws.
  • There are still concerns about privacy, security, and safety associated with drone deliveries among consumers.
  • Initially, implementing and setting up drones is expensive. Establishing drone launch pads, battery chargers, training facilities, software, and research and development require high investments.
  • The weather impacts drone delivery operations as snow, rain, and wind are potentially problematic.
  • Packages can be stolen, and equipment can be damaged.

Drone Delivery Support Services

Retail logistics companies work with professional drone technology and service providers to transport goods safely from one place to another. These companies specialize in delivering items safely and securely through drones. They also offer cutting-edge support services during every stage of their overseas transport operations, such as:

  • Analyzing data and implementing data-driven operations
  • The recruitment and training of ground support operators and drone pilots with the necessary skills
  • Campaigns
  • Market research
  • Curation and mapping of geospatial data
  • Provide support in drone technology such as navigation, detection & avoidance (collision management system), and integrated air traffic management
  • Supply chain management operation processes, including order management, contracts, track, and trace.

Drone Delivery Has Several Advantages

When a piece of mail or package needs to be dispatched to its final destination, it usually passes through several phases. However, with drone-based delivery systems, packages can skip both the sorting process and most of the driving process altogether by hovering directly over urban centers and dropping packages off at their destinations instead of being delivered from one place to another.

This way saves companies time and money and makes delivery more efficient because items are no longer delayed by traffic.

The use of drones can reduce logistics costs
Although uncrewed transport vehicles are much more expensive at the start, their cost is far lower than that of manual delivery in the long run. As for transporting without drivers or robots, it's not difficult to see how this company can save much money relating to labor costs because it only needs charging and maintenance.

Drone delivery boosts the economy of underdeveloped regions
In many underdeveloped areas, accessing essential products is often hard and complicated. Rural locations especially suffer from a lack of proper transportation options, making it challenging to buy things online. Companies such as Amazon and Google have recently begun testing out drone delivery that may change the way people in these areas buy things and make it easier for companies to deliver their packages.

Environmentally friendly
Companies in the logistics industry constantly seek to reduce their carbon footprint to cut fuel costs and fight global warming. They can significantly reduce the amount of fossil fuel used at the end of their supply chain, reduce their costs, and improve the environment by using drones.

Drone Delivery Disadvantages

When technology becomes mainstream and is widely adopted, many folks often overlook some of the challenges of adapting to the new system until something leads to a problem that needs immediate fixing. These are some of the disadvantages of drone delivery:

Rules & Regulations
Companies are fighting to make it easier to launch drone delivery services with maximum success in their endeavors, the most important being lobbying government organizations and other governing bodies.

Initial Costs
The initial investment will be hefty for the infrastructure necessary for a drone delivery network - there are drones to buy, delivery routes to create, and staff members to train.

Because of their small size, drones will be at greater risk of being affected by bad weather conditions. Although most of those designed to be used for delivery services have been built to withstand windy and rainy conditions, they are still a major risk in strong winds.

As these drones operate so close to the ground, they'll be a tempting target for opportunistic criminals. Some may even try to access the drones' flight navigation systems, divert their destination, or use them for criminal purposes.

Only local deliveries
The battery technology that powers some of the smallest remotely controlled aircraft is not yet able to provide them with a long flight time, mainly because commercial drones are powered by lithium-ion batteries and can only fly for one hour at most, including the return journey. Thus, businesses are limited in offering drone delivery services only within a certain radius from their warehouse hub.

Drone Delivery: The Future

Last-mile drone delivery looks promising. According to some recent data, the market for autonomous last-mile delivery is huge and is set to be worth a multi-billion dollar industry by 2030.

While all involved contend saturation is years away, executives in this fast-growing vertical confirmed that there's room for multiple players despite continued investment across the board.

As drone delivery has been instrumental in many remote communities getting vital medical supplies like the COVID-19 vaccinations, people will be more open to getting their delivery via drones.

In Summary

Companies that incorporate drone delivery into their business practices could substantially benefit from an array of unique advantages. Economically, for instance, many experts speculate that drone delivery will prove cheaper than traditional delivery methods typically used in commercial settings. The reduction of costs, in turn, may account for the projected increase in the popularity of drone deliveries among major corporations and other businesses.


drone delivery, drone tech, drones, logistics, retail, UAS, UAVs

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