Ever since Amazon teased drone delivery concept back in 2016, the drone delivery system is the future of e-commerce. But is it?
Analysts are still questioning if drones are the future of e-commerce. If we look at how some companies are approaching drone package delivery, the market is expected to grow to USD 39,013 million by the end of 2030. This is a staggering CAGR of 53.8% from USD 528 million in 2020.
Even when we see newer technological advancements with each passing day, the drone delivery system still seems fancy to consumers. One reason could be Amazon failing to deliver on its promises where it envisioned to take over the packaging industry by storm. This does not mean if Amazon could not do it, no one could!
Three major companies including Alphabet’s Wing, have gained approval from the FAA to use drones for delivering parcels. This unlocks so many opportunities for existing and upcoming businesses competing to capture the untapped market.
The Rise of Drone Delivery
According to a study conducted by McKinsey, nearly 80% of deliveries will soon be made by autonomous vehicles including commercial drones. Over the past couple of years, an increase in interest has been seen in drone delivery of packages.
It is believed that those retailers who incorporate drones for their logistic needs will ultimately bypass the need for 3rd party companies, minimize delivery times, avoid delay in traffic and reduce costs in the short and long term. Moreover, it enables the retailer to offer a completely personalized solution.
What is Last Mile Delivery?
Consumers anticipate their deliveries and are often frustrated when they only track the progress in real-time to see it’s out for delivery. Last Mile Delivery is exactly as the name suggests – it is a process from when a package is dispatched from the warehouse and enroute to reach its destination. Inefficiency in last mile delivery can hamper a business’ progress when competing in an already saturated and cutthroat market.
The costs are higher as last mile delivery takes up to 53% of the overall shipping cost. And, with the recent ‘free delivery’ concept, if businesses are not efficient enough, they are losing customers to their competition.
How Is Drone Package Delivery Shaping the Future of Last Mile Delivery?
The drone delivery system is a game-changer and can shape the future of logistics in the coming time. Here is how it is impactful when it comes to fulfilling last mile deliveries.
Quicker Turnaround Times
The major problem consumers have with online shopping is waiting and delivery times. Even though online shopping is convenient but anticipating a parcel is hard. With drone delivery, companies are looking to improve their delivery times.
As the delivery system will be flying high in the air and free from road congestion, businesses can easily commit delivery turnaround times of 30-60 minutes, depending on the territory. Furthermore, they’ll have optimized routes planned and integrated to reach the desired set point. This is a win-win for both businesses and customers.
Cost-Efficient Delivery Method
Whether businesses partner with third-party logistics companies or plan to handle customer deliveries on their own, there is a lot of money involved. From acquiring a fleet of vehicles to managing human resources such as riders and delivery persons, a drone package delivery system can easily reduce overall logistics costs to a great extent.
Moreover, with better delivery times, the shipping costs can potentially reduce, resulting in a boost in sales for businesses. Analysts believe that delivery drone technology can work alongside existing modes of transportation to ensure cheaper and efficient merchandise fulfillment.
Less Labor Dependent
Implementing drone delivery as your primary shipping method can help businesses be less labor-dependent. This eventually reduces overall operational costs where a single drone can handle multiple deliveries with faster turnaround times instead of relying on multiple people covering the same area to meet committed delivery times.
Environment Friendly Technology
Using vans and trucks for delivering parcels daily means environmental pollution. With drone delivery, companies plan to reduce their carbon footprint by using Unmanned Aircraft Systems (UAS) to deliver packages. According to a study published by Nature Communications, companies using vans or trucks to deliver a package are responsible for creating 1 kg of greenhouse gas emissions. Replacing this with UAS and drone delivery can help the environment and tackle climate change issues.
Challenges of Drone Delivery
Even though businesses are implementing this system to enjoy its benefits, the delivery method is still in its infancy. There are numerous challenges if we talk about the drone delivery system, primarily getting approval from the Federal Aviation Administration (FAA) to fly the UAS. Drone systems offer convenience but come with a fair share of challenges. While autonomous with a planned optimized route, it takes a couple of trial-and-error runs to successfully land a drone in a known or unknown environment. Furthermore, dropping packages safely from height is another challenge. Consumers expect their packages to be delivered safe and sound. However, these challenges can be catered to with efficient software and training to the person supervising UAS.
Package Management in the Modern Era
Currently, automation is slowly taking over package management and package room software like Mailroom by PackageX are aiding the process. The software is responsible for inbound deliveries and delivers the packages and mail to the right recipient. The powerful OCR technology helps scan everything that is on the label and processes packages in 7 seconds. Isn’t it amazing how technology is revolutionizing the last mile delivery?
Reduced delivery times and costs are two of the primary reasons drone delivery is the future of logistics, especially last mile delivery. Companies are constantly looking for ways to get consumers’ packages faster at their desired location. And, with the drone delivery system, they seek to achieve just that.