Last mile deliveries via drones will come sooner than most of us suspect. Until a little while ago, I suspected drone deliveries will only become a reality far into the future (10+ years). But recently a few new developments changed this perspective.
First, never underestimate the accelerating progress of technology.
Second, the technology is, as many experts will tell you, already available more or less. (The technology needs to meet safety measures set by regulators, and most drones may not do that yet.) The speed at which drone deliveries at scale will appear hinges mainly on regulatory approvals. Those will take time, but the race is on.
If Amazon’s drone program succeeds (and Amazon says it is well on track), it could fundamentally alter the company’s cost structure. A decade from now, drones would reduce the unit cost of each Amazon delivery by about half, analysts at Deutsche Bank projected in a recent research report. If that happens, the economic threat to competitors would be punishing — “retail stores would cease to exist,” Deutsche’s analysts suggested, and we would live in a world more like that of “The Jetsons” than our own. (…)
I was first clued in to the importance of Amazon’s drone initiative, called Amazon Prime Air, when I met Gur Kimchi, the head of the program, at an industry conference a few months ago. Though our conversation was off the record, Mr. Kimchi’s detailed answers to my questions suggested I had been too quick to dismiss the initiative.
When I began talking to others in the drone industry about Amazon’s interest in autonomous flight, they all pointed out that drones offer a way to leapfrog roads. Because they operate in a new, untrammeled layer of physical space — below 400 feet, an airspace that is currently unoccupied in most of the country — they open up a vast new shipping lane.
Beyond posting several videos, Amazon has not revealed much publicly about its drone program, but it has been working with regulators worldwide to set up tests of the system. It envisions drones being able to deliver packages up to five pounds in weight, which account for 80 to 90 percent of its deliveries.
In the eyes of Amazon management, apparently, drone deliveries are set to arrive within five years:
according to Amazon, the earliest incarnation of drone deliveries will happen much sooner — we will see it within five years, somewhere in the world.
Also, take a look at those last words there: “somewhere in the world”. Amazon is already playing nations against nations when it comes to speeding up the necessary regulatory framework. The company started recently working together with the UK government. The BBC:
Amazon has announced that it will partner with the British government to run tests exploring the viability of delivery of small parcels by drone – the first time such tests have been run in the UK.
The company announced that a cross-government team supported by the Civil Aviation Authority (CAA) gave permission to Amazon to explore three key areas: operations beyond line of sight, obstacle avoidance and flights where one person operates multiple autonomous drones.
The experiment will look at drones carrying deliveries weighing 2.3kg (5lb) or less – which make up 90% of Amazon’s sales, a company spokeswoman said.
This very early pilot project was something Amazon deemed worthy of a press release. That press release was mainly aimed at US regulators. From the pr text:
“The UK is a leader in enabling drone innovation – we’ve been investing in Prime Air research and development here for quite some time,” said Paul Misener, Amazon’s Vice President of Global Innovation Policy and Communications.
The U.S. National Science Foundation will spend $35 million over the next five years on unmanned flight research and the Department of Interior plans to expand its use of drone flights, according to an e-mailed release Tuesday from the White House Office of Science and Technology Policy.
Drone deliveries of course will make ecommerce far more efficient than one can imagine today. Read that quote from Deutsche Bank again:
If that happens, the economic threat to competitors would be punishing — “retail stores would cease to exist,” Deutsche’s analysts suggested (…)
That is not an overstatement in my eyes.
Though how exactly this will manifest remains to be seen. We’ll learn soon enough.
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