The emergence of new technology creates new solutions. Many believe we’re on the cusp of a second wave of an automation revolution. This line of thinking is lead by the emergence of driverless vehicles and drone technology. Both are proving safer and faster solutions to current delivery systems. As part of our yearly future looking survey, we asked members of the e-commerce world to speculate on the impact of these technologies. Within a five year scope, people are generally optimistic both drone and driverless vehicles will have an impact on how we receive our goods.
Only 8% of survey takers believe driverless vehicles will account for less than ten percent of all deliveries.
Over half of all respondents believe driverless vehicles will account for at least 30% of the handling of all packages.
Drone prevalence is a bit more pessimistic among survey takers, but over a third still believe drones will account for 10 - 30% of all deliveries.
Percentage of Packages Delivered by Drone or Driveless Vehicle in the Next 5 Years
It’s not hard to see why unmanned vehicles and drones can provide a better experience for customers. I believe it’s all but a forgone conclusion these solutions are going to replace our current ones. However, five years maybe too optimistic for full adoption and rollout everywhere. For example, Tesla’s semi-trucks aren’t meant to hit production until 2019. Even though they’ve received orders from large companies reliant on fleet transport like Walmart, FedEx and Anheuser-Busch, these orders in no way are full compliments to the current fleets. This is partially due to the trucks being electric, making them bound to refueling limits in the infrastructure and distances they can travel.
Drone delivery may have a bit of a leg up on driverless vehicles though, because they can bypass the limitations of current infrastructure. It’s likely we’ll see a rise in drone deliveries within the next 3-5 years in the US, but developing countries with weaker infrastructures are likely to focus on drone deliveries and implement it sooner. Consider the needs for medicine, food and other urgent delivery items. Companies aren’t going to wait for the best paths to be built for them when they can just fly over it all. Zipline, an organization out of Rwanda, is already delivery life-saving blood and medicine by drone at significantly faster rates than traditional delivery. As these fleets or squadrons of aircraft are built out, they’ll find usage in more commonplace delivery as well.
In America, there’s a need to find a “sweet spot” for roll out. It’s predicted suburban areas outside of cities are likely to be the first adopters and test sites for drone delivery. A lot of it comes to cost effectiveness. In dense urban areas, there’s a lot of choices and delivery times are general already low within 20 minutes. It’s not cost effective to use expensive aircraft to make a delivery in the same time. Suburban areas would benefit from the quicker delivery times and increased choice, though. Rural areas would as well, however, the demand and number of deliveries made would have to justify the wider area of operation and larger fleet needed to satisfy the same number of households.
Drones are subject to scrutiny by the FAA and require their routes to be designed and approved. This is important to remember when considering the rural vs suburban vs urban rollout. Again, suburban and rural areas are optimal for their lower density. Less risk of damage and injury in case of malfunction. Routes and acceptable fly zones will be easier to plot out. Low density also means less general congestion; one drone to a home, rather than five or more to the same apartment building. There’s also issue of noise pollution, as well. Cities like New York and Los Angeles may find themselves opposed to the sound of buzzing squadrons of drones at all hours. The FAA may have to implement acceptable fly times for certain areas, no matter the density.
While giants like Amazon and Alphabet have their plans for drone delivery, they’re ultimately going to be limited on widespread rollout as it will take time to approve the paths and times of operation the drones can operate in. It will ultimately be a current tech giant, though, “paving the way” so to speak as they have the capital to build the aircraft and work out these delivery routes.
I believe we’re definitely going to see a rise in these technologies, but nothing near as optimistic as respondents believe. We’re going to be a largely mixed traffic society, especially in America. Regulations on autonomous vehicles, when and where they’re allowed to travel is going to be their biggest hindrance. This will be especially true for dense cities until logistics and cost effectiveness are in their favor. This shouldn’t discourage vendors though. As the opportunities for new technology and delivery systems arise, they should be willing to explore these new, faster, and more efficient solutions.