Drones in the Shipping Industry

The application of drone technology has expanded into various new avenues. It encompasses drone delivery, drone light shows, transportation, commercial aerial surveillance, filmmaking, oil, gas and mineral exploration, disaster relief, real estate and construction, recreational uses, and even drone weaponry!

Amidst the global pandemic, cost reduction, technological advancement, and saving time have become a high priority of most companies across the world and drone technology is bringing them a step closer in achieving this. Many industry leaders across the world such as DHL and Amazon are already experimenting with this technology. This suggests that analyzing the impact and benefit of drone technology can revolutionize the logistics industry and provide a competitive edge.

Advantages of Using Drones in Logistics

1. Reduced operational and shipping costs:

Implementation of drone technology can result in significant cost reduction for last mile operators. For example: Amazon’s prime air delivery drones can reduce delivery cost to al low as $1 shipping out packages within less than 30 minutes. The expansion of the commercial drone market is an amazing opportunity to revolutionize drone technology in the logistics segment. Adoption of drone technology will drastically reduce numerous costs including insurance, maintenance costs, fuel costs and many more for the first companies to do so. This could potentially result in a 83% cost reduction considering that by using drone technology, market leaders like Amazon have been able to reduce their shipping costs to as low as $1.

2. Speedy Delivery:

Many ecommerce companies like amazon are capitalizing on the speed of drones by offering services like same-day delivery. The need for traditional transportation channels of picking up a package from the warehouse, loading it on a carrier, and then sending it out through conventional channels has essentially been nullified. Instead, the order can be picked up by the drone, loaded and shipped directly to the customer by the mere click of a button. This process also voids the limitations of delivery routes and other day-to-day logistical challenges.

3. Eliminate return hassles:

Amidst the hustle and bustle of our everyday life, time and speed are of vital importance to us. We want our deliveries immediately and if we don’t receive them, we want our refund just as fast to immediately place new orders. Drones help us resolve the inconvenience of going to the post office and dropping off our package each time and help in addressing the real likelihood of reducing return time cycles. Damaged goods can also be picked up and returned to the sender by using heavy duty drones. During the transit time of the drone, returns can be processed. Instead of waiting for order and inspection, you can get back to business as faster turnaround means faster resolution and return of claims.

Obstacles for the future of drones in logistics

Vulnerability of technology

Various aspects of drone technology are still far from perfection just like any new innovation entering the market. As of now, drones aren’t advanced enough to handle the entire spectrum of logistical requirements of a company. Drone use is currently restricted to small packages and short distances today as the drones developed so far are still quite fragile and require highly skilled operators and technicians thus adding onto operating and production costs. Furthermore, drones are also susceptible to hacking by hackers wanting to destroy or steal materials attached to drones. However, on the plus side, developers are actively trying to resolve and manage such problems. Developing civilian drone technology is on track to meet and even exceed the level of advancement seen between smartphones today and those 5 years ago.

Liability concerns.

It is easy to work with humans operating transport as we know exactly who is responsible for any damages or malfunctions. Millions are spent on insurance costs by logistics firms just to ensure that in the event of an accident, operators are certified to cover costs. Drones use for commercial purposes have regulations requiring them to stay within line of sight when flying. Drones used for transportation cannot be kept constantly in the line of sight. The skill to maneuver and fly to the right destination is all controlled by AI. So, the question arises, who is held accountable for product replacement costs when goods get damaged in the event of a drone crash. What if a technical malfunction or operational error causes it to fall and cause serious injury to someone on impact?

Drones are going to be a substantial part of the logistical operations for many companies within a few years. However, the overall ability of drones to revolutionize and improve logistical operations globally is yet to be determined. As we get more clarity into the future potential of drones, incorporation of drones into logistical operations will become more cost effective for small parcel services and last mile operators with increased applicability and feasibility. Even though truck fleets’ sales aren’t exponentially rising overnight, it is time for companies to analyze the vast potential drone technology possesses and the impact it can have on the future of the logistics industry.