Same-Day Delivery: Can Drones Play a Role for Retailers?
By Christoph Stehmann, Pitney Bowes
Imagine that it’s a breezy Friday morning and tonight is your nephew’s birthday party. It’s completely slipped your mind, and there just isn’t time in your day to go shopping. However, you’re not stricken with panic, because this solution is routine. You go online, find the hottest toy, and hit Amazon Prime Air. You quickly hop in the shower, scarf down a breakfast, and on your way out the door, a small “Octocopter” is touching down on your doorstep to save your day.
A captivating scene, no doubt.
However, when you scrutinize the feasibility of this concept, there are a multitude of challenges that may push small packages drone models into the realm of wishful thinking. But, the potential of drones is much larger. In this case, commercial drones may be more practical and make the reality of a national infrastructure for same-day deliveries more possible for retailers. This, by itself, makes commercial drones a worthy topic, especially for what it would mean for retailers in the future.
The Challenges Facing Small Parcel Drones
If you assume the average major parcel delivery person will deliver around 250 – 300 packages per day over a 10-mile (square) range, the notion of a drone carrying a five-pound payload covering the same volume, is unlikely. The drone would have to make a massive number of trips to cover the 10-mile range since it can’t carry multiple packages, even if every package was under that limit. From a logistics standpoint, this makes small parcel drones, especially in the context of large volumes challenging.
In an urban environment, the fact that drones would need to be in constant use to simply deliver a large number of packages – this may be as high as 500 in a day for an urban driver – is another example of the impracticality of small parcel drones. If for nothing else, imagine the confusion of witnessing drones flying around an urban area. The number of unforeseeable consequences as culture adapts or doesn’t makes small parcel drones an extremely risky prospect that currently demands a high investment up front.
From a small parcels standpoint, the models make very little sense for most retailers. Of course one could point to thousands of historical examples of people resisting new technology only to be proven wrong by the benefits(no doubt, this very notion is what likely drives tech visionaries to invest in small drones). However, a far more practical view of drones appears in the light of commercial drones.
Feasibility of Commercial Drones
A major opportunity that could help fill a void in the shipping and logistics industry for retailers is using commercial (larger) drones to move larger volumes of goods or packages. In the U.S., there are approximately 5,800 airports with various capabilities to land commercial drones. This could create an extended infrastructure for expedited shipping, same-day delivery and other more time-dominant shipping models for retailers. Linking multi-modal centers together through drones could add a new dimension of air delivery, adding flexibility and new dynamics to the concepts of same-day delivery.
For example, in a largely rural setting, it is entirely possible for drones to have practical impact. A major carrier could pick up a package at one of its rural facilities and cover up to 200 miles per day by truck in an area of only 30 to 40 square miles. The volume of packages is low but the distance is high. In a commercial drone world, it would then be possible to analyze an area like that and adjust dynamic truck routing to cover heavy packages (say over 15 pounds once the technology is there) and use a series of drones, strategically stationed, to cover remote areas or extreme ranges from the distribution centers.
In the case of urban environments, the prospect of commercial drones makes more sense as well. Take New York City, for example. Commercial drones could run from distribution centers in upstate New York to a small airport in Long Island, where couriers could transport those goods throughout Manhattan. In that model, the cultural shock of watching a drone fly through Lexington Avenue. with unmarked packages is completely bypassed. From an infrastructure standpoint, commercial drones could bolster the entire shipping network and remains largely detached from the general public, mitigating risk. Drones could arrive every 45 minutes with delivery requests of the past hour. From a retail perspective, this automatically translates to value for consumers.
Aside from that, integration of commercial drones automatically open doors beyond the realm of commerce. Imagine time-sensitive items, such as organs, being delivered by commercial drones. This would not only be cheaper, but might literally save lives. As an approach, being able to promote this perspective seems like a better argument for integrating drones than the calamitous reports of small drones flying around urban areas.
The Possibility of Commercial Drones for Retailers
So will the FAA permit drones to deliver pallets of packages or products? In short, yes, it will fly. They have been ordered by Congress to come up with policies and rules for both small operating drones and commercial drones. Focusing on small drones seems to be the first step, and the FAA has already made steps by approving the use of drones in Alaska by an oil company for monitoring.
For retailers, the notion of commercial drones is something to keep an eye on. With omnichannel fulfillment options being optimized to better meet customer needs, incorporating drones into the current hybrid delivery models could be beneficial. When the clearance for larger commercial drones does eventually come, these kinds of same-day delivery models could be designed and employed within years. Of course, the creation of a commercial drone infrastructure is going to take deep pockets, smart people, and time, but for the moment, the fact that drones are quickly becoming central to the discussion of how retailers will reach their customers in the future, means that it is definitely a topic to monitor.
We might very well be headed to a brand new frontier: the Wild Wild Sky.
Christoph Stehmann is president, e-commerce and shipping solutions, Pitney Bowes, a global technology solutions company.