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US regulations, infrastructure hold down cargo delivery by drone

Frost & Sullivan estimates that 100,000 drones between 2019 and 2023 will be for delivery.

Drone applications have rapidly proliferated across industries, but their use for package deliveries is expected to remain largely grounded by regulatory and infrastructural hurdles during the next few years, according to a research report by investment strategies firm Frost & Sullivan.

The company forecasts that the number of deployed drones will increase from 2.44 million in 2019 to 2.91 million in 2023.

Most drones will operate in the “dull, dangerous, dirty and difficult” jobs category, said Michael Blades, Frost & Sullivan’s vice president of aerospace, defense and security, in a telephone interview with American Shipper. These types of jobs may include, for example, inspecting unsafe buildings and the inside of oil tanker hulls.

Drones have proved themselves safe and effective in myriad applications, such as building, power line and wind turbine inspections; mapping and navigation; and crop spraying.

Since Amazon (NASDAQ: AMZN) first began developing drones in 2013 for consumer deliveries, a multitude of companies, including UPS and FedEx, have stepped forward with their own plans for the technology.

However, U.S. Federal Aviation Administration (FAA) regulations for drone flight ceilings, times of operation, and visual contact by operators during flight continue to hold back the technology’s commercial cargo potential, Blades said.

Blades estimates that between 2019 and 2023, about 100,000 drones will be in use for cargo delivery applications and they will be operated by firms providing niche services.

One of the most successful services for delivering cargo by drone was launched in 2014 by San Francisco-based Zipline. The company’s small, fixed-wing drones deliver shipments of medical supplies using parachute drops to remote locations in Africa.

According to Zipline’s website, the company operates strategically located distribution centers across Africa from which its drones take off and return. Zipline said its drones can make hundreds of deliveries a day from these sites to any point within an 8,750-square-mile radius.

UPS (NYSE: UPS) has expanded its investments in drone technology in recent years. In March 2019, the company’s UPS Flight Forward unit began using M2 drones, developed in partnership with Matternet, to deliver pharmaceutical parcels across the WakeMed medical campus in Raleigh, North Carolina. Last November, UPS announced its first “revenue deliveries” of prescription drugs for CVS Corp. (NYSE: CVS) to the doorsteps of customers in Cary, North Carolina.

Earlier this year, UPS entered a partnership with Wingcopter of Germany to develop heftier, longer-range drones for shipment deliveries.

Other manufacturers, such as DJI, Flirtey and Elroy Air, have successfully developed package-transporting drones in recent years.

Blades said unless the FAA grants a waiver, the requirement for visual contact with the drone by the operator will continue to limit the technology’s growth prospects for commercial cargo delivery in the U.S.

In December, the FAA proposed a so-called “license plate” rule for drones which could allow for their operation beyond visual contact of the operator, but the rule is fraught with privacy and operator liability concerns and will likely take years for the agency to finalize, Blades said.

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Chris Gillis

Located in the Washington, D.C. area, Chris Gillis primarily reports on regulatory and legislative topics that impact cross-border trade. He joined American Shipper in 1994, shortly after graduating from Mount St. Mary’s College in Emmitsburg, Md., with a degree in international business and economics.

4 Comments

  1. Drone delivery is never going to happen as currently conceived by Amazon, Wing etc. The Air Rights, safety, liability and logistics issues are insurmountable. Also the states, and soon counties, are passing drone restrictions for privacy protection which creates additional roadblocks that won’t be undone anytime soon.

    Railroad networks are the logical solution to drone transport at scale. Telegraph, fiber optic and pipeline companies learned this decades ago.

    ‘Drone+Rail Intermodal’ addresses the insurmountable challenges currently preventing drone commerce.

  2. Quote :

    “However, U.S. Federal Aviation Administration (FAA) regulations for drone flight ceilings, times of operation, and visual contact by operators during flight continue to hold back the technology’s commercial cargo potential, Blades said.”

    OH REALLY ??? I beg to differ (wink)

    Let’s see ,

    Quote :
    October 2019

    “UPS just won FAA approval to fly as many delivery drones as it wants”

    And the beat goes on , ala dee dee dee , ala dee da dee da , LOL !

    In my humble opinion ………..

    NEXT !

    1. My apologies for omitting to add this one !

      Quote:
      April 2019

      “Alphabet’s Wing drones get FAA approval to make deliveries in the US”

      “Wing, the Alphabet-owned startup, has become the first drone delivery company to gain the Federal Aviation Administration’s approval to make commercial deliveries in the US. ”

      OH AND QUOTE :

      April 13 2020

      “Bloomberg reported recently that Wing, Alphabet’s drone delivery service, is seeing a big uptick in orders in the Christiansburg, Virginia, pilot program that it’s been running since the fall. Wing works with FedEx and Walgreens to deliver household essentials and has also added a local bakery and coffee shop to expand offerings during the pandemic. The delivery service claims that the volume of deliveries has doubled amid the crisis, and Christiansburg’s Mockingbird Cafe and Bakery reports that it’s sold 50 percent more pastries thanks to the deliveries. The drones can complete deliveries within minutes, though they’re limited in how much they can carry per order. Here’s a look at one Wing drop-off: ”

      VOILA !(wink)

  3. woah this blog is excellent i like reading your posts. Stay up the good work! You realize, lots of persons are searching around for this information, you can help them greatly.

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