The future of last-mile delivery includes drones

Executives weigh in on drones taking over the final mile

Jack Daleo

3 years ago

The future of the last mile is here — and drones are a part of it.

As FreightWaves predicted last month, the future of last-mile delivery will be many things — fast, flexible, automated, sustainable. One thing we didn’t mention is that it will also be airborne.

Drone delivery is taking off. Long seen as some kind of Jetsonian future, drones today are delivering everything from chicken wings and beer to lifesaving medical supplies, and they’re doing it in cities, backyards and everywhere in between.

While reports of hiccups within Amazon’s drone delivery program might suggest clouds in the forecast for drone delivery, there are a host of other companies that see only clear skies, particularly in the final mile.

Ahead of FreightWaves’ The Future of Supply Chain event May 9-10 at the Rogers Convention Center in Northwest Arkansas, we asked them what to expect from last-mile drone delivery in the coming years.

Question: What part of the supply chain do you call home?

Yariv Bash, CEO, Flytrex: We’re focused on home door delivery. And even more specifically, in the suburbs, which are actually most of the U.S. market, roughly two-thirds of the U.S. population lives in private houses. There are more than 82 million single-family detached homes. And that’s our focus. But we’re actually not a drone delivery company. We’re more like an on-demand company using drones because we’ve got the entire stack for the drones themselves — which we design, manufacture and certify with the FAA — all the way to the app that’s installed on the end customer’s iPhone or Android.

Dan O’Toole, CEO, DroneDek: DroneDek owns the last few feet of the last mile of package delivery and will enable traditional, drone and autonomous delivery. Even if drone delivery were enabled across the country right now, there’s not a safe, platform-agnostic place to deliver packages, and we all know the piracy rate for packages left on doorsteps. Our mailbox works now for any kind of delivery, giving users a secure, climate-controlled, app-controlled space that will be great when drones are enabled for delivery.

Watch: Delivering everything with drones

Alexa Dennett, head of communications, Wing: We’re focused on last-mile delivery of lightweight, everyday essentials like medicine, food and household goods that by some estimates account for over 80% of all last-mile deliveries. Moving these goods around by drone can cut down on traffic, reduce emissions and make our roads safer. It can also help retailers boost sales and bring added convenience for consumers. At the end of the day, it makes a lot more sense to deliver a bottle of Advil via a 10-pound drone than it does with a 3,000-pound vehicle.

Andrew Patton, head of U.S., Manna: Last mile — specifically, on-demand last mile. DoorDash is an excellent analog for the type of delivery we can do — but we can do it farther, faster and at lower cost.

Question: What are some headwinds and tailwinds facing the last mile of drone delivery going forward?

Bash: It’s not an easy industry. When we started, we realized that this is more a marathon than a sprint. We’ve been working hand in hand with the FAA for more than four years now as part of the Integration Pilot Program and then the BEYOND program. And basically, it’s one step at a time. It’s not a zero to one. But we are already servicing close to 10,000 families. We have three stations operating in North Carolina. We are operating now in Texas. I hope that by the end of this year, the beginning of next year, we’ll start seeing even more stations, more deliveries — not just by Flytrex, but by the other companies as well, because the market is so big. There’s room for everybody.

O’Toole: Right now, it’s the regulatory process. Technology, as is so often the case, is ahead of the government’s regulatory structure, but we’re getting there with recent action from the Unmanned Aircraft Systems (UAS) Beyond Visual Line of Sight (BVLOS) Aviation Rulemaking Committee (ARC), which issued recommendations in March calling for regulation relaxation that’s key to enabling drone delivery. We’re ready, and the drone industry is ready too. Consumers are more than ready.

Read: Alphabet’s Wing launches commercial drone delivery in Texas

Read: Nonprofit plans to use medical drones. to save Ukrainian soldiers, civilians

Dennett: While we’re still in the early days of drone delivery, the future is coming into clearer focus. A first-of-its-kind study in Christiansburg, Virginia — where we operate a drone delivery service — found nearly 90% approval for drone delivery, which is a positive indicator that when a community has firsthand experience with drone technology, they tend to find value in it. Other headwinds are the myriad benefits of drone delivery; it’s not only a faster and more convenient way to order goods, it’s a safer, less expensive and more sustainable way to deliver them. Among headwinds, creating a regulatory environment in which drone delivery can thrive is definitely a paramount issue to be worked out, but that’s increasingly happening.

Patton: The pandemic has accelerated the desire for contactless delivery. Both EU and U.S. regulators are making progress in defining what the right regulatory frameworks for BVLOS UAS operations over people will look like. This is critical for long-term scalability. E-commerce only continues to grow — in the U.S., more than 80% of retail still happens offline. Urgent delivery is a key enabler to bring some of the largest use cases online, and they happen to be high urgency: prepared food, grocery, convenience, etc.

Question: What might the last mile of drone delivery look like by the end of 2022?

Bash: “We think that in the stations that we’ve already opened, people are getting used to the service. And they just enjoy it. The restaurants as well are excited to be joining because they pay a lot less, both for the delivery service and for the customer leads. And as we near the end of 2022, we’re going to see more customers happy with the service and enjoying their even hotter meals, delivered faster than before. You still won’t see that on a nationwide scale yet. But it’s already on the way there.

O’Toole: We expect to have hundreds if not thousands of our smart mailboxes in operation across the country by the end of the year. We strongly believe that once people see DroneDeks in action, they’re going to want one. It’s not unlike cellphones or personal computers. There was a time when those devices were considered unnecessary for ordinary human activity. Our mailbox is going to be something people come to see as essential.

Dennett: Our early successes in Australia, Europe and the U.S. imply a not-too-distant future in which similar high-volume drone delivery services could be replicated in cities and metro areas around the world. There is a lot of interest in drone delivery, and as it becomes available in more places, I think the number of companies using it will increase significantly.

Patton: From Manna, expect increased throughput, geographic coverage, key system capabilities and some exciting new partnerships. Expect drone delivery to continue to mature through the end of the year. We’ll see more coverage as leaders continue to deploy more aircraft in limited geographic areas to better and more thoroughly serve larger trial areas. Expect some additional headway as regulatory pathways become increasingly clear.