Theodore Lowe, Ap #867-859
Sit Rd, Azusa New York
Find us here
Is Drone Delivery the Future of Logistics?
Yashonidhi Shukla
The global supply chain is undergoing significant transformation as the world adapts to the post-pandemic era. Consumer demand and the need to provide superior customer service are driving the need for more efficient, cost-effective, and seamless supply chain operations. The expectations for on-demand and same-day deliveries are prompting sellers and logistics companies to re-evaluate traditional vehicle-based logistics networks. According to the World Economic Forum, 85 million packages and documents are delivered daily worldwide. The last-mile delivery, which typically accounts for 50% of logistical costs, is often the most time-consuming aspect of the delivery process.
To address inefficiencies in last-mile logistics, an increasing number of logistics stakeholders are turning to drone technology as it can control operational costs, overcome traffic bottlenecks and reduce vehicular emissions while satisfying the customer appetite for on-demand and instant delivery. Originally developed for military and law enforcement purposes, the application and usage of drone technology has expanded to include a wide range of labor-intensive and complex tasks across various industries. These tasks include identifying defects in oil and gas pipelines, monitoring crop health, identifying hotspots in fire situations, surveying mining and construction sites, capturing aerial footage, and delivering packages. A delivery drone is an unmanned aerial vehicle (UAV) specifically designed for transporting packages, including medical supplies, fresh food, and other goods.
The retail and logistics industries are leveraging drone technology to implement innovative and scalable delivery models. Leading companies such as Amazon, UPS, DHL, and Walmart have already introduced drone delivery services on their platforms. The industry is also supported by specialized drone delivery operators and technology providers, such as Wing, Zipline, and Matternet. The global market for drone package delivery is projected to reach 8 billion USD by 2027, with a significant compound annual growth rate of 41.8%. According to Gartner, by 2026, over one million drones will be utilized for retail deliveries.
Policies of Indian Government
India has introduced a Drone Liberalization Policy in 2021 to accelerate the commercial and industrial use of drones. The government has also approved a Production-Linked Incentive (PLI) scheme for drones and drone components and banned the import of drones to encourage indigenous manufacturing. The Ministry of Civil Aviation has allocated USD 15 million to manufacturers over a three-year period under this scheme. Additionally, the government is promoting programs such as Drone Shakti, which supports drone start-ups, and Drone-as-a-Service (DrAAS). An online platform called Digital Sky, which will handle various activities related to drone management in the country, is planned to be functional by October 2022. The Ministry of Civil Aviation estimates that these initiatives will make India the third-largest drone market by 2025 and a drone manufacturing hub by 2030.
The use of drones for deliveries has been in development for some time, but recent changes to regulations have made it easier for commercial operators to adopt the technology on a large scale. The Drone Rules, 2021 have simplified the process for flying drones beyond the visual line of sight and have made certification less complicated. Additionally, the government is creating designated areas specifically for drone deliveries. Under the Drone (Amendment) Rules, 2022, commercial drone operators are no longer required to have a "remote pilot license" and can instead obtain a "remote pilot certificate" from an authorized training organization.
Benefits of Drone Deliveries
Drone delivery offers several advantages over traditional delivery methods, particularly in the last mile. Drones provide a quicker and more efficient means of transporting goods, particularly in rural and remote locations. The ease of navigation has allowed for successful projects like the Indian Council of Medical Research's "i-Drone," which used drones to deliver essential medical supplies to remote areas of the Northeast. Through this project, 17,275 units of medical supplies were delivered over 735 kilometers in just 12 hours. Without drone delivery, this journey of 2,000 kilometers would have taken an estimated 50 hours, due to logistical challenges.
Drone technology can play a significant role in addressing climate change concerns. According to a report by the World Economic Forum, the growth in e-commerce is expected to result in a 78% increase in last-mile delivery by 2030, which could lead to a 30% increase in carbon emissions in the 100 largest cities. In India, the transport sector is responsible for the third-highest emissions of carbon dioxide, with road transport alone accounting for 90% of total emissions. Electric drone-based delivery solutions consume less energy and are more environmentally friendly than land-based transport, making drone delivery a more sustainable option.
Drone Delivery and Last-Mile Logistics in India
In India, government incentives are driving various industries, such as healthcare, agriculture, e-commerce and transportation, to explore the potential of drones. While their use has largely been limited to essential deliveries, future growth is expected to come from their commercial applications. Many companies and startups in the e-commerce and food delivery sectors are currently conducting pilot tests for middle-mile and last-mile deliveries using drones. Additionally, with GPS capabilities, customers can track their packages in real-time and receive quick and contactless deliveries.
Recently, Tata 1mg has launched a drone delivery service in Dehradun, providing faster delivery of diagnostic samples and medication along air routes. This new service will save time by avoiding delays caused by road traffic, and also provide better access to medical assistance in remote areas. Another company, Redcliffe Labs has also started using drones to transport medical test samples twice daily from remote collection centers in Uttarkashi to its laboratories in Dehradun.
Other companies in India, such as Swiggy, Zomato, and Dunzo, have previously announced their intentions to implement drone delivery services. Zomato has successfully completed test deliveries of food using drones that can carry a weight of 5 kg and cover a distance of 5 km in just 10 minutes. Swiggy has selected four drone startups to start the pilot project of grocery delivery in the cities of Bengaluru and Delhi-NCR.
Conclusion
Despite some challenges, more businesses are turning to drones as a delivery solution. The Ministry of Civil Aviation predicts that the drone and drone component manufacturing industry in India, which currently has over 200 startups, will receive over $626 million in investment over the next three years. Although drones may not entirely replace traditional delivery methods, they have the potential to revolutionize logistics operations by providing faster, more efficient, and more environmentally friendly delivery options, ultimately leading to an improvement in customer satisfaction.
References:
Yashonidhi Shukla
I am practicing before the Allahabad High Court and have appeared before the court in several important matters. I have practice in the following areas: Taxation , Criminal Law, Arbitration, RERA and REAT, Legal Drafting, Service and Employment laws
Sophie Asveld
February 14, 2019
Email is a crucial channel in any marketing mix, and never has this been truer than for today’s entrepreneur. Curious what to say.
Sophie Asveld
February 14, 2019
Email is a crucial channel in any marketing mix, and never has this been truer than for today’s entrepreneur. Curious what to say.