By Skyports’ Strategy & Operations Manager, Daniel Hochar
It’s an exciting but confusing time for the drone delivery industry.
Exciting because drone deliveries are increasingly being tested across industries and around the world. Their positive impact has been most notable – and studied – in healthcare, where cost savings, efficiency improvements, happier health workers and a more equitable and resilient provision of services have been demonstrated. Cherry on top, the vast majority of drones that are making the headlines are electric and are paving the way to a greener logistics sector, bearing in mind that transport consistently tops rankings for the most polluting industries.
Confusing because industry outsiders are confronted to a steady stream of project announcements, many of which often fail to materialise. The PR battle is raging to attract much-needed investment and to lure the handful of companies and institutions which are open to experimenting with drone deliveries. To be sure, recent progress in drone delivery projects is genuinely impressive, including ours, and unprecedented milestones are being reached by bold, hard-working teams of very smart people. But how does your organisation fit into all this, and are drone deliveries actually feasible today or rather merely reserved for healthcare or PR stunts?
Size doesn’t matter. Better, faster and cheaper does.
Our biggest challenge – aside from regulations which my colleague Alastair flags here – lies in widespread convictions that drone deliveries are too expensive to be commercially sustainable, and are thus restricted to large companies with the resources, funding and appetite to implement Proof of Concepts. But size doesn’t matter. Whether you work in a start-up or a multinational, here’s why you should consider and prepare for a permanent drone delivery offering now.
First, integrating drone deliveries into existing supply chains is a challenging and potentially costly endeavour. Take the e-commerce or food delivery spaces for example. Where will drones take off from? What is the size, weight, nature and value of an order to qualify it for drone deliveries? Should customers be charged a premium? How to integrate this new delivery option into inventory, logistics, and customer ordering software? Early adopters of the technology are in a much stronger position to seamlessly scale it and gain market share when the regulatory hurdles finally do fall completely into place. In fact, the smaller the company, the less disruptive integration will be. In a world where free same-day deliveries will soon become the norm, it’s easy to forget that customers will always want things better, faster and cheaper. Drone deliveries will become the norm in many cases, and playing catch-up without any prior engagement with the technology is bound to be a losing strategy.
Second, few have been able to precisely measure and evaluate the impact that drone deliveries can achieve on organisations’ commercial bottom line. This leads some to quick and dirty assessments that compare trucks carrying tons of product across beautiful six lane highways to drones carrying a handful of kilograms to deliver just-in-time, regardless of terrain and weather (hint: the truck is cheaper in this case). But drones are autonomous delivery robots. They trigger a systemic change in logistics that can be difficult to measure. Benefits range from quantitative ones such as increased revenues, reduced waste, fewer stock-outs and lower inventory costs to qualitative ones such as broad efficiency gains, happier staff and better serviced customers. Without the right tools to measure these tiers of impact, traditional apple-to-apple comparisons will often skew cost benefit analyses towards delivery trucks or motorcycles as cheaper options. While drones are generally still more expensive when compared to other means of transport, they are cheaper today than they were five years ago, and it is very likely that they will be ten times cheaper in another five years. Ultimately, drone deliveries won’t be for everyone, but they are already a cheaper, better and faster alternative for some, and will soon be for many.
So, what now?
The best way to consider the impact that drone deliveries can have on your organisation is to test and assess their applicability while avoiding bets on specific technologies. New, improved and cheaper drone models – as well as their accompanying hardware and software infrastructure – are popping up every day, and there is no one-size-fits-all solution to the differing needs of customers across sectors and geographies. As a logistics company, not a drone manufacturer, we use the world’s best drones across a variety of different use cases. By working with us, you benefit from our real-world operational experience and a learning curve that would otherwise have cost your company time and money to acquire, with the added benefit of flexibility to switch technologies or simultaneously use multiple ones as your needs evolve.
- A one-stop-shop for drone delivery logistics services.
- A genuinely customer-centric approach, with no vested interests in specific drone technologies.
- The most cost effective and flexible means for your company to test, and scale, a drone delivery offering with its positive impact on revenues, costs and overall service levels.