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The Drone Delivery Market

Over the past five years, shipping companies have increased their use of drones, or unmanned aerial vehicles (UAVs), in delivering items to their customers. 

Wing, an aerial commerce business owned by Google’s parent company, Alphabet, arose directly from small-package drone delivery and operates in the United States, Finland and Australia. 

Wing, Amazon and the United Parcel Service (UPS) are the companies that have been approved by the Federal Aviation Administration (FAA) to pilot drones for delivering customer purchases, according to the Associated Press. 

The COVID-19 pandemic highlighted the need and demand for both delivery services and alternate methods of delivery — and those companies and others are working to bring drone delivery to the masses.

Drone delivery market

The drone market has significantly increased in recent years. 

In 2016, the FAA designed its permissions for specific drone carriers, dependent on regulations. Since then, enterprises have been applying to be legal commercial drone operators. The FAA counts over 372,000 commercial drones in the U.S.

The United States had the largest market share in 2019, and the market for commercial drones is growing significantly in Asia and Australia, according to a report by Mordor Intelligence.

Across the world, drone shipments will increase at a 66.8% compound annual growth rate, according to Insider Intelligence. 

Drone delivery is a technology that hasn't yet fully shaped the e-commerce market or industries, but it's poised to do so: Businesses continue to seek approval from the FAA for commercial drone delivery.

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Major companies in drone delivery market

Drone delivery isn't a primary method of shipping goods as of spring 2021, but several major companies are testing the technology with a vision to roll out more launches. 

Amazon

Amazon first used Prime Air for delivery in England in 2016 and received FAA approval for drone delivery in the U.S. in 2020. In Cambridge, England, a fulfillment center shipped orders by drone to customers who lived in the vicinity. This allowed Amazon to test Prime Air, delivery speeds and safe drone flights and landings. 

Delivery flights by Prime Air in the U.S. haven't been announced as of March 2021. 

Amazon's drones are autonomous and programmed with GPS and artificial intelligence (AI) capabilities to see what’s in the flight path and react accordingly. Amazon says it uses stereo vision for this ability to see and interpret obstacles. The drone's shape also changes depending on whether it is taking off or flying at speed. 

Wing

Wing mainly focuses on drone delivery and has four test areas: Christianburg, Virginia; Helsinki, Finland; and Canberra and Logan, Australia. Wing ships lightweight cargo, around 3.3 lbs at most. 

During the COVID-19 lockdown in 2020, a Christianburg coffee vendor, Brugh Coffee, partnered with Wing to deliver drinks to customers by drone. Those deliveries allowed the owners to still earn some revenue and serve their customers. 

Brugh Coffee sold more cold brews through lockdown deliveries than at its physical location pre-pandemic, according to one of the owners. After stores began to reopen, Brugh Coffee continued working with Wing to deliver drinks to customers who wanted to receive orders by drone. 

UPS

In Rwanda, UPS has launched a medical drone delivery service. The company flies blood to clinics, so they can perform critical transfusions. 

UPS is also flying medical supplies by drone to a hospital in Raleigh, North Carolina. 

UPS Flight Forward, its drone delivery division, says it plans to expand its U.S.-based deliveries to other medical centers and industries. 

Uber

Uber, a ridesharing and food delivery company, declared its plans for drone food delivery in late 2019.

In summer 2019, Uber Eats participated in a drone food delivery test program in San Diego along with other organizations, but the program did not become a regular occurrence.

Since 2019, it's unclear what Uber Eats is planning for its drone delivery service or when it expects to launch the service. 

Drone delivery effects

Beyond widespread rollouts for consumer and commercial deliveries at scale, the technology could have other benefits, such as increased access to critical medicines and improved sustainability.

After Wing began partnering with Virginia businesses to deliver food and smaller items by drone, Virginia Tech University released a study in September 2020 analyzing the impact of drone delivery on three local areas in the U.S., including one of Wing’s test areas, Christianburg. The researchers discuss projections and the impacts drone delivery could have on transportation, carbon dioxide emissions and the ability of people with limited mobility to access delivery services. 

The study tracked a period of growth over five years: how drone delivery could impact a community during that period. Drone delivery could reduce car crashes by as many as 580 a year in a metropolitan area, according to the research team. It could also reduce carbon dioxide emissions from cars, since the number of vehicles traveling would be lower. 

Drone delivery could provide elderly and low-mobility individuals with another opportunity to purchase goods without going out. This includes prescription drugs and over-the-counter medicine. 

The Virginia Tech researchers also predict drone delivery will result in increased sales for small businesses that participate. 

Drone delivery regulation

The FAA manages all commercial airline regulations in the U.S. The agency is responsible for approving commercial drones when companies submit their plans. In previous years — before the introduction of Part 135 designating drone air carriers — regulations in Part 107 of the FAA code restricted drone delivery, which include the rule that each drone must stay in sight of the remote pilot. Drones must travel out of the line of sight for adequate delivery service.

Part 135 provided more opportunity for companies to get their drones approved for delivery, but there are still legal measures with which they must comply. Part 135 certifications cover transporting items for customers in state and out of state. There are four different certifications air carriers can receive: the standard one has no craft number or pilot limitations, and the others restrict the number of drones and pilots. 

In December 2020, the FAA announced a pair of new safety rules for drones, including lights for night travel and a remote ID for government and airspace tracking. 

Drone delivery concerns

Some consumers are worried about safe landing spaces for drones. 

In test runs in the U.K., Amazon Prime Air drones required an open space for landing, which they would scan before fully descending. 

The FAA regulations also lay out rules for avoiding injury, including no exposed blades that are able to "lacerate human skin." They also include specific rules that limit the pressure a drone can apply if it were to hit a human.

Perhaps one of the greatest threats people have expressed about everyday drones is the possibility of their being compromised by foregin enemies and being used for attacks or infiltration. They are technology and aircraft, both of which can be hijacked.

Looking ahead

Drone delivery is a promising market, especially for the leading e-commerce company Amazon and major shipping companies, such as UPS, which has an early lead. 

Although companies have to wade through regulatory processes for drone delivery, global companies Wing, UPS and Amazon have already received approval by the FAA and others have applied.

The drone delivery market in its early stages and appears to be preparing for more launches, despite some concerns over safety and security. 

The technology is yet another way to improve customer satisfaction by rapidly shipping goods and is already in position to impact business sales, medicine, the environment and more — as companies complete testing and demand increases in the U.S. and across the globe. 

Related articles

• Verizon's Skyward partnering with UPS Flight Forward on retail drone delivery

• Webopedia: Unmanned aerial vehicle (UAV)

• eWEEK: Drones

TAGS:

Amazon, ups, FAA, Wing, drones, Amazon Prime Air, drones in Rwanda