Amazon In The Air: Airplanes Today, Drones Tomorrow

Amazon Drones

Two years ago Amazon pulled of its first PR stunt with drones for delivery, although it never tried to hide how far off drones for delivery actually are:

“I know this looks like science fiction, it’s not,” Bezos said on 60 Minutes, adding that “this is early, this is still years away.”

This year’s presentation -surely aimed as much at regulators as at holiday shoppers who need to be reminded of Amazon- is more realistic than the one of two years ago.

Amazon Prime Air:

We’re excited about Prime Air — a future delivery system from Amazon designed to safely get packages to customers in 30 minutes or less using small unmanned aerial vehicles, also called drones. Prime Air has great potential to enhance the services we already provide to millions of customers by providing rapid parcel delivery that will also increase the overall safety and efficiency of the transportation system. Putting Prime Air into service will take some time, but we will deploy when we have the regulatory support needed to realize our vision.

TechCrunch:

The new Prime Air drone isn’t just a quadcopter anymore. It still takes off and lands vertically, but then it switches to a regular horizontal flight mode, which is far more efficient. It’s basically part helicopter, part airplane. With this new design, the drone can cover over 15 miles and fly over 55 mph, Amazon says. In the video, Clarkson says Amazon is working on a family of drones for different environments and purposes. (..)

The new drones feature at least some degree of sense-and-avoid technology and once it arrives at its intended location, it’ll scan the area and look for a landing spot. Right now, it looks like users will be able to mark this spot in their yard, for example, with an Amazon logo. The drone then lands, drops off the package and takes off again.

Amazon describes in the FAQ what it expects today from future drone deliveries:

Amazon Prime Air is a future service that will deliver packages up to five pounds in 30 minutes or less using small drones. Flying under 400 feet and weighing less than 55 pounds, Prime Air vehicles will take advantage of sophisticated “sense and avoid” technology, as well as a high degree of automation, to safely operate beyond the line of sight to distances of 10 miles or more.

This is far more a question of regulation than of technology at this point, or more precisely a question of 100% secure technology than just ‘good enough’. I don’t see this happening in the near future. (Wait another two years to see the next iteration that will be much, much closer. Then start watching the regulation process.)

But having said that, it is easy to see why Amazon is so determined to make this vision work. There are a lot of upsides for Amazon with a drone network. If this would get real, it would make fast delivery much more cheaper and efficient. Rolling out its own logistics operation would be far easier for Amazon with having a fleet of drones flying through the air.

But even if the regulation process goes really fast in the US and we see it rolled out over the next years, I don’t see this becoming available within the next 5 years here in Europe, for example.

In the mean time, the more interesting logistics trends are happening on the ground and in the on-demand sector and at the last mile in general.

But let’s stay in the air for a little longer. Here’s an interesting report at Vice’s Motherboard:

In 2013, at the height of the holiday season, a surge of last minute Amazon orders and bad weather left many customers without gifts under the tree on Christmas day.

Amazon said the problem was not due to issues with its warehouses or staff, but failures on the part of UPS and other shipping partners. It apologized and reimbursed some customers with $20 gift cards, but the debacle underscored for Amazon the disadvantages of relying on third party shippers for its delivery process.

Since then, Amazon has been increasingly investing in its own alternatives, from contracting additional couriers to rolling out its own trucks in some cities.

The latest rumored venture into Amazon shipping has a name: Aerosmith.

An air cargo operation by that name launched in September of this year in Wilmington, Ohio on a trial basis. The operation is being run by the Ohio-based aviation holding company Air Transport Services Group, or ATSG, out of a state-of-the art facility. It’s shipping consumer goods for a mysterious client that many believe to be Amazon.

Amazon is experimenting at all fronts with logistics; and for good reason. Would Amazon experiment with air cargo? Of course the company would. Anyone surprised by this has not been paying attention.

Motherboard has a good summary of the overall goal:

Amazon has been making moves into the delivery business since at least early 2014, when logistics trade publication DC Velocity reported that the company was revamping its fulfillment infrastructure and adding its own private fleet on the ground.

An unnamed Amazon source also told the publication the company “is assembling a high-level executive team to lead the company’s push to develop its own transportation network,” and that it will launch its shipping infrastructure sometime in 2016.

The company’s ultimate goal, the source told DC Velocity, is to guarantee a 90-minute to two-hour delivery window—shaving down the time difference between online orders and going to a brick and mortar store.

Make sure to read the whole report at Motherboard.

Ben Thompson at Stratecherey is drawing comparisons to AWS (paywall):

Still, it’s hard to not consider carefully the lessons of AWS: once you removed the assumption that enterprise computing would always be on premise, Amazon’s expertise in building large data centers and serving customers at scale created the groundwork for one of the most important (and in the long run, very profitable) innovations of the Internet era.

Imagine if a similar assumption were removed in logistics, like, say, the assumption that all last-mile deliveries have to be done by a person in a truck (remember, trucks are more efficient in urban areas anyways, where drones would have a harder time; it’s more spread-out suburban and exurban areas that are the real challenge for companies like UPS). Wouldn’t a company on its way to owning 50% of consumers (Manjoo noted research saying that’s the percentage of Americans who would have Amazon Prime by 2020) as well as an ever-expanding 3rd-party marketplace program be exceptionally well-placed to take advantage of the new opportunities that would result, and be able to make a play to own the infrastructure of all of e-commerce, not unlike their position in enterprise computing?

That is a very important question to ponder; and it shows that all this goes far beyond drones and their current PR potential.

3 comments

  1. […] Amazon In The Air: Airplanes Today, Drones Tomorrow […]

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  2. […] in all dimensions. It is expanding its Uber-like package delivery service Flex and is experimenting with airplanes, to name just two examples. There are rumors Amazon is already building its own overnight […]

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  3. […] is expanding its Uber-like Package Delivery Service ‘Flex’ and is working at air freight services. The company also buys thousands of trucks in the […]

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