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Drones: delivering success or a flight of fancy (Part Two)


In the first part of this drone delivery feature, we considered some of the barriers to the widespread use of drones. Now, in part two, we’ll hear the opinions of some key figures in the delivery sector and consider where drones might find their natural home.
DHL has already run trials on a drone service to the island of Juist, just off the coast of northern Germany; a 30 minute trip to a sparely populated island, with a remit to see if it is a practical method of transporting medical supplies, for example.

eDelivery contacted another big name freight and logistics brand, FedEx who, in return, sent us this short statement. “FedEx is closely following the rapid advancements in Unmanned Aircraft Systems (UAS) and their potential for commercial use, now in the early stages of public debate. For the foreseeable future, FedEx is confident that the main transportation networks that move light freight, packages, and correspondence today will continue to be the backbone of the parcel and freight transportation industry.”

While the carrier wouldn’t be drawn further into the conversation than that, it’s clear there isn’t a sense of any-minute-now in FedEx’s opinion on drones.

Patrick Gallagher is Chief Executive of CitySprint, the same-day delivery firm. Not surprisingly, CitySprint is keeping an eye on this space. “Omnichannel delivery is all about consumer convenience – delivery on the recipients’ terms. For this reason, we take a big interest in new technology to see whether it can make life easier for our end-users,” Gallagher tells us.

Highways not skyways

However, he sounds a note of caution: “Drone delivery in its current form is expensive, and the technology doesn’t allow for deliveries of more than a couple of miles. Retailers are looking for personalised fulfilment methods that can scale across the whole UK, and with competition in the industry as high as it is, they want solutions that can be put to work right away. We will continue to watch the technology develop, but we do not expect, in the near future, for drone delivery to come to market with any real scale.”‎

Dr Richards of Bristol Robotics Lab picks up on this point. “Scalability is a really big challenge. To do it with just one drone in one local area is feasible, and there are already examples in Australia, Germany and India doing small scale focused delivery operations. However, if you wanted to roll out a whole fleet, there’d be significant infrastructure challenges. If you started a new business with a fleet of say vans or bicycles, they’d just use the road infrastructure we already have – traffic lights, rules, markings, signs, lights, etc. However, there is no ‘drone infrastructure’ and no-one has yet figured out what it would look like.”

One of the biggest names in the sector, Dick Stead, Executive Chairman of Yodel, sympathises with the drone hype and excitement, but he’s not joining in just yet. “Setting the obvious issues around legislation aside, the overall concept sounds very attractive, doesn’t it? Being able to avoid traffic, for example. I can understand all the excitement. But there are some real issues and you can’t ignore them for long. Can you really have tens of thousands of drones flying around all over the country? I’m generally sceptical of that scenario.”

Show me the money

The other key challenge that Stead highlights is one that everyone in the sector will be familiar with – cost of providing the service vs how much shoppers want to pay.

“Who’s going to pay?” he asks. “This is a very expensive option, yet – as we all know – customers want free delivery. Absorbing the cost doesn’t look like it will be a likely option either. Drones can only carry smaller items, and although size and value aren’t always synonymous with one another there is a relationship, and that means it’s less likely that the delivery will be of high enough value.”

It’s not just the carriers and their systems that will be affected, should drones ever break into the mainstream, of course. Retailers will be faced with another set of challenges if drones become a popular and workable option for shoppers.

“The idea of answering your door to a drone, signing your name on a touchscreen pad, and taking possession of the shiny new purchase you ordered online earlier that day may have to be filed under Tomorrow’s World for the time being,” says Tobias Hartmann VP for Client Success, Operations and International eBay Enterprise.

“Developments of this sort of scale will, however, depend on retailers fundamentally changing their fulfilment infrastructure, moving from having one centrally-located hub from which all orders are dispatched to using a network of smaller local distribution centres. Ship-from-store already enables retailers to reduce delivery times and streamline inventory management by using in-store stock to fulfill online orders for local delivery. And with the debate about the convergence of on- and offline retail and the future of the high street rumbling on, ship-from-store could provide a shot in the arm as online pure-plays investigate the possibility of buying up units that may otherwise have to be vacated.

“Services such as click-and-collect and ship-from-store may seem a long way from delivery drones. But it is clear that options such as these lay the groundwork for greater innovation and create a brighter future for the high street than the doom-mongers would have you believe.”

Niche to see you

It looks as though drones, as a mainstream delivery option, are unlikely to ever make it off the drawing board, according to the people we spoke to. Everyone we spoke to was in agreement over that. There was another point of consensus about drones too, namely that we shouldn’t write them off altogether as they may yet find their niche.

Yodel’s Dick Stead, once again: “If they’re not going to be used in a general capacity, could you use them in places that are less accessible? I think that’s far more likely. But we need to see huge technological advances to be able to do that. Of course, having said that, a few years ago who would have been able to predict how widespread come of the technology we now use would become? Yodel will keep abreast of the technology as it develops, and we’ll keep an open mind.”

While technology that relates to the safety of a drone in flight will be that which is uppermost in people’s minds, there are other, more mundane considerations here too. Battery technology hasn’t moved on significantly for quite some time. That means the life on a single charge on a drone may be not much more than half an hour or so flying time. Size is a factor too. The bigger item to be delivered, the bigger the drone required. The bigger the drone, the heavier it and its battery will be before it’s even collected the item.

Warren Lester of Vicon describes some of the potential – and actual – uses for drones that are starting to materialise. “Logistics within a factory or warehouse is a more realistic likelihood – picking inventory, for example. in fact, several robot manufacturers are looking at automatic picking of inventory from shelves and taking to a given location. That sort of thing doesn’t face anything like as may challenges as flying a drone outside.”

It’s not all future-gazing, either, as he points out. “There’s a lot of interest in using them for inspection purposes – engineering sites, bridges, that sort of thing. They’re being used at Fukushima (the Japanese nuclear reactor that suffered a critical systems failure in March 2011 following an earthquake and tsunami). They could have a valuable role to play in places where humans have difficulty going.”

Pie in the sky

Amazon casts a huge shadow wherever it moves, and it’s no surprise that when it foretold of a future full of delivery drones, the retail sector and its customers had their heads turned. Whether Amazon even really expects that day will come is hard to say. But it does a great job of still being able to think and act like a market disrupter.

In the absence of crystal balls, fortune tellers and time machines, one can only guess about the role of drones in the delivery business. It’s far more likely that they will become an important add-on in certain areas than dominate the skies though. After all, losing something in transit is bad enough, dropping it on someone’s head from a great height is an order of magnitude worse, and the liability claims likely to come from the first major delivery drone accident would most likely take the heat out of most people’s drone enthusiasm.

On the opening morning of EDX 2015, this coming Wednesday (25 March), there will be a demo of a drone making a delivery. We’re running the demo as a competition to win an Apple Watch, thanks to our good friends at Scurri, the parcel shipping software platform.

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