delivery service is one of the most important daily service industries in the modern world. Recent reports show that nearly 1.6 million Amazon deliveries are happening worldwide daily. According to the e-marketer, 5.7 trillion global e-commerce sales occurred in 2022 and the average order value was estimated at around 100 USD. Based on these numbers, there should be 4.75 billion monthly online deliveries per month.
The main categories in which online deliveries can happen are :
- Grocery items
- Online orders
- Food & Beverages
- Medical supplies and first-aids
As of today, we are using manned vehicles for deliveries. But these traditional delivery services have some major issues.
- traffic
- safety
- cost
- environmental issues
- hard to reach destination sometime\
these are some of the major issues.
Unmanned aerial vehicles(UAVs) are one of the major advancements mankind had during recent decades. drones can be used in many fields from military operations to videography/cinematography purposes.
drone-based delivery is one of the most exciting paths that mankind has unlocked. From small packages to medical supplies, drones are poised to revolutionize the way goods are transported, offering unprecedented speed, efficiency, and accessibility. As this technology matures, it promises to reshape logistics and consumer expectations globally.
beginning and the rise
The whole world started talking about drone-based deliveries when in 2015 Amazon founder Jeff Bezos predicted that delivery drones would be as common as delivery trucks. Then Amazon started to develop a project on UAV-based delivery. They have not been able to make a breakthrough yet. But this inspired some other companies to start their drone projects and work on them. But still, we don’t have a key player in this futuristic technology. in August 2023, Walmart announced it would add two more supercenters to its network of drone delivery hubs to offer 30-minute delivery to an additional 60,000 households in the Dallas-Fort Worth area.
Drones, or unmanned aerial vehicles (UAVs), have been around for decades, primarily used for military and recreational purposes. However, it wasn’t until recently that their potential for commercial delivery was recognized. The combination of advancements in drone technology, regulatory developments, and increasing consumer demand for faster delivery has set the stage for a new era in logistics. The process of drone-based delivery is simple. This involves flying drones as the medium for delivering packages from the retailers to their customers.
There are many benefits of this new method including :
- faster and efficient
- safety & quality
- environmentally friendly
- low carbon emission
- ability to reach any destination
- same day delivery
- low traffic and accidents
- low-cost manufacturing and maintenance
- contactless delivery
- do not need a big storage area.
- improved customer services.
- Versatility
Two main parties in the operation are business owners and their customers. drone delivery can be changed due to Order size, Flight duration, order type, and propellent type.
Market Research
Analyzing the market and its potential to grow a sustainable and profitable business venture is very important before executing the idea.
The drone industry is forecasted to reach 276 billion USD by the end of 2024 and 827.6 billion USD by the end of 2031(CAGR 20%). This technology can be implemented in many sectors such as agriculture, construction, military and defiance, logistics, delivery/transportation, media entertainment etc. The main regions for implementing the drone technology are North America, Europe, and southeast/south Asia. Drone-based delivery systems are one of the most promising new industry sectors in modern and especially future world operations. The Drone-based delivery market was valued at 530 million USD in 2022. The drone-based delivery marketplace is projected to reach 2.6 billion dollars by 2028 and 5.3 billion USD by 2030 globally (CAGR 42.6%).
This massive market growth is being improved by the following factors.
- high demand for same day & faster delivery
- low-cost/affordable delivery options
- ability to reach rural/remote areas for deliveries
- does not need a lot of operating space/storage
- sustainable low carbon emissions
- sustainable/low energy usage
- safety and quality of the delivery process
- reducing road accident
- contactless delivery(covid-19 pandemic has increased the popularity of this method)
- growth of the e-commerce industry
- increasing investments in new technologies
- the growing market of online purchases
- rapidly increasing technological advancements
Case study -1
with the effects of the COVID-19 pandemic, the South Korean government accelerated their project with test trials of drone-based food delivery. The Ministry of Land, Infrastructure and Transport held a test in Sejong City, South Korea, showcasing five food delivery drones and other products to people in households two to three kilometres away via a lake and high-rise buildings within 10 minutes. This proved how effective this technological invention can be in the future.
Case study -2
the state of Telangana in India, along with Niti Ayog, a welfare scheme by the Indian government, and Apollo hospitals, which are a part of the World Economy Forum (WEF) Medicine from the Sky project, planned to conduct trial drug delivery using drones. The growing adoption of online shopping among consumers has increased the demand for advanced transportation options that provide faster delivery services.
Case study – 3
In October 2021, Royal Mail completed autonomous UAV flight testing with Windracers Ltd. between North Ronaldsay and Kirkwall. This attempt has proved that this technology can provide deliveries to almost everywhere from remote islands to mountain areas, and to cities. Due to this, in collaboration with local governments, major e-commerce companies and local post offices are introducing drone delivery services.
Case study – 4
Also in 2021, Singapore’s Maritime and Port Authority launched a new program to use drones to transport documents, supplies, and parts for vessels berthed at its port as part of the country’s plan to integrate advanced drone technologies for maritime transport applications. Due to the shortage of delivery personnel and the impact of the global pandemic, the need to respond to changes in the logistics industry has become more urgent than ever, and the use of drones helps realize automated, contactless delivery services in remote islands, mountainous areas, regions, and even cities.
According to this data, the global market was valued at 530.2 million USD. With the effects of the pandemic, The retail & e-commerce segment accounted for the highest revenue share of over 30% in 2022. This is also driven by their increasing adoption in the public sector and retail industry.
Healthcare-related deliveries also play a key factor in the market. This is mostly important because humans can use these systems to save another human life. The military/police and defence sector is also investing heavily in this area. UAV-based delivery vehicles will be the faster, cheaper, and safer way to transport goods during military operations.
According to the data, North America has the largest market revenue with 34.0% of global market revenue share by 2022. The USA contributes a large part to this market.
However, the Asia-Pacific region has the fastest growing market in the upcoming years with a CAGR of 45.4% by 2030. China and India are taking the lead role in this technology.
The market growth is expected to promote a better regulatory environment, especially in developed countries. Several governments are constantly working to create new rules for the commercial use of drones. So, Europe needs to catch up with these two regions, specially in an industry that going to play a major part in the future. Gaining more advancements over other regional markets can create an internet-based larger customer base.
Consumer perspective
McKensey did a survey on AAM and delivery systems back in 2021, in 6 countries from Brazil. Poland, China, Germany, India to USA. 4,800 customer feedbacks were evaluated. Their data showed that 4 out of 6 countries(China, Germany, Poland, and the USA) are willing to use AAM for delivery and errands after commuting and business purposes. This indicates that the public is willing to use AAM vehicles and UAVs for travel and delivery.
But also 60% of respondents in total responses are concerned about safety precautions that are necessary for these operations. So, we must always focus on safety first approach to gain public trust and satisfaction.
This article, which was published in August 2022, the discussion is about validation of an autonomous drone-based delivery system equipped with a smart capsule for the transportation of blood products in urban areas. According to the research, scientific communities are looking for new methods to transport medical equipment such as blood products faster and more effective than the traditional transportation methods we are using today. Here is some of the key points highlighted in the article;
“The reliability of the entire delivery system was confirmed by a risk analysis (i.e., HFMEA (Healthcare Failure Mode and Effect Analysis), which was applied to assess possible criticalities, considering the observations performed during flights. Concerning the delivery times, it was estimated that drone transport reduces it up to 50% over short distances (up to 10 km) and up to 80% over medium distances (up to 40 km) in the scenario considered in this project.”
Conclusion
Drone-based delivery is no longer a futuristic concept; it is an emerging reality that has the potential to transform the logistics industry. By offering faster, more efficient, and accessible delivery options, drones are set to meet the growing demands of consumers and businesses alike. As technology advances and regulatory frameworks evolve, we can expect to see drones becoming an integral part of the delivery ecosystem, bringing us closer to a future where the sky is the limit.
Whether it’s a hot meal delivered to your doorstep within minutes or critical medical supplies reaching remote villages, the drone revolution is here to stay, promising to elevate delivery services to new heights.