Amazon and the Future Of Drone Delivery
Since its founding in 1994, Amazon has been massively disrupting the retail world. Over the years, they’ve increased their delivery speed to the point where they now offer free 2-day shipping with Amazon prime. For several years now, Amazon has also been indicating that they intend to begin using drones to deliver products. Founder Jeff Bezos said back in 2013, “One day, Prime Air vehicles will be as normal as seeing mail trucks on the road today.”
Amazon Is Rapidly Expanding Its Delivery Methods
Amazon clearly has plans to massively expand their delivery operations, and drones are only a small part of those plans. The Wall Street Journal reports: Amazon.com plans to roll out thousands of branded semi-trucks to help shuttle inventory between its facilities, an effort to take more control of its shipping processes. Additionally, Amazon is using a crowdsourced delivery method and is building a fleet of airplanes to supplement the standard delivery options they currently use. Clearly, they are intent on using all the resources at their disposal to significantly decrease the time between an order being placed and the package actually being delivered.
Rather than replace partners like UPS and FedEx, it is spending boatloads on planes, trucks, crowdsourcing and other novel delivery services to add to its overall capacity and efficiency. By continuing to increase their delivery speed, Amazon can gain a competitive advantage over ecommerce rivals. Wal-Mart recently purchased Amazon competitor Jet.com for $3.3 billion, ratcheting up the online selling competition between Amazon and Wal-Mart.
The Strategic Benefits of Drone Technology
By using drones, Amazon can completely eliminate many of the issues that come with traditional delivery methods. Drones offer a way to leapfrog roads. Because they operate in a new, untrammeled layer of physical space — below 400 feet, an airspace that is currently unoccupied in most of the country — they open up a vast new shipping lane. The U.S. Department of Transportation has warned that the current infrastructure in the United States isn’t sufficient. They predict that, unless something changes, U.S. roads will become terribly clogged by 2040, which would be a disaster for Amazon. Instead of relying on human delivery, which is prone to be late or incorrect, drone delivery can be controlled directly by Amazon itself.
Commercial Operations and Delivery Milestones
Amazon last week made its first customer delivery by drone, carrying a package containing popcorn and a Fire TV video-streaming device several miles to a two-story farmhouse near Cambridge, U.K., in 13 minutes. Delivery drones are arriving, at last. After nearly a decade of largely unfulfilled hype about flying robots dropping orders at your doorstep, a handful of companies have started commercial operations in the U.S. involving dozens or hundreds of deliveries a day at each location.
Key Delivery Performance Data
- Amazon Prime Now (Traditional/Crowdsourced): Four-pack of Starbucks vanilla Frappuccino delivered in Miami in under 10 minutes.
- Amazon Prime Air (Drone): Fire TV and popcorn delivered in Cambridge, U.K. in 13 minutes.
- Zipline (Drone): Uses 11-foot wide, fixed-wing drones to parachute-drop packages in under 30 minutes.
Regulatory Hurdles and the Path Forward
Technology is not the primary hurdle Amazon must clear in implementing Prime Air. Drone companies have been cleared to expand their operations across the U.S., in cities as well as rural areas, at the same time their tech has become faster and more reliable. The companies are vying to be Americans’ choice when they want a bottle of Advil, a takeout meal, or the next iPhone delivered in under 30 minutes—once federal regulators enable broader rollouts.
