De­liv­ery drones could be a re­al­ity

China Daily (Canada) - - COMMENT -

E-com­merce is boom­ing in China but de­liv­ery ser­vices need to keep pace with it. Most people have ex­pe­ri­enced frus­tra­tion with the de­liv­ery of their pur­chases, es­pe­cially dur­ing peak pur­chas­ing pe­ri­ods. This prob­lem, though global, is more pro­nounced in China where huge vol­umes of goods have to be de­liv­ered across di­verse land­scapes. Could aerial drones help solve the prob­lem?

De­spite a cer­tain amount of tol­er­ance for less than smooth de­liv­ery of our goods, per­haps what di­min­ishes our sat­is­fac­tion with the ben­e­fits of on­line shop­ping is a de­liv­ery that turns into a real has­sle, of­ten in­volv­ing phone calls and a trip to pick up the par­cel. In­stead, wouldn’t it be great to have a drone deliver your pack­age di­rectly to you at your con­ve­nience, guided per­haps by your mo­bile phone?

Al­though an ur­ban sky filled with drones seems like pure sci­ence fic­tion, de­liv­ery drones are now be­ing tested by ma­jor de­liv­ery com­pa­nies across the world. Drone de­liv­ery sys­tems are be­ing en­vi­sioned in ma­jor cities, such as Dubai, which be­lieve that tech­no­log­i­cal and eco­nomic cases are com­ing to­gether to make drones a fea­si­ble, ef­fi­cient and green op­tion for e-com­merce de­liv­ery. Could de­liv­ery drones be a so­lu­tion to at least part of the lo­gis­tics co­nun­drum that is needed to help sus­tain the e-com­merce boom in China?

Drone tech­nol­ogy is de­vel­op­ing ex­po­nen­tially but there are so­cial and civil is­sues in­volved as much, if not more, than tech­no­log­i­cal ones. For ex­am­ple, there are ques­tions over whether the pub­lic will ac­cept mul­ti­ple drones in the sky over ma­jor cities.

Reg­u­la­tory frame­works will be needed to con­trol the headspace over ma­jor cities and there is plenty of hu­mor gen­er­ated from the po­ten­tial for mis­chief mak­ing, such as in­ter­ven­ing with drones in flight or steal­ing the drone and de­liv­ery. Yet tech savvy cus­tomers now want a more per­son­al­ized shop­ping ex­pe­ri­ence to­gether with the kind of 24x7 con­ve­nience of ATMs. Bet­ter de­liv­ery ser­vices would also ben­e­fit on­line sell­ers by gen­er­at­ing higher sales.

For de­liv­ery ser­vices, aerial drones could of­fer a great new­tool. For the e-com­merce boom to con­tinue in China, the de­liv­ery ser­vices need to im­prove to han­dle peak de­mand and of­fer high qual­ity im­me­di­acy. For in­stance, peak sea­sons for re­tail sales have proved a ma­jor prob­lem for de­liv­ery com­pa­nies in China. Nov 11, 2013, sawa huge peak in busi­ness on Taobao, one of the largest e-re­tailer plat­forms in China, with over­all sales cross­ing 19 bil­lion yuan ($3.04 bil­lion) and the to­tal num­ber of trans­ac­tions ex­ceed­ing 100 mil­lion.

But the peak re­tail sales turned into a nightmare for lo­gis­tics ser­vice providers, with 70 mil­lion parcels packed and dis­patched be­ing be­yond their pro­cess­ing ca­pa­bil­ity. The avalanche of pack­ages ar­riv­ing at dis­tri­bu­tion cen­ters across China caused huge de­lays for most on­line shop­pers. “Not de­liv­ered on time” was on top of the com­plaint list of on­line cus­tomers dur­ing that pe­riod.

What de­liv­ery com­pa­nies need most is flex­i­bil­ity to han­dle large vol­umes of pack­ages and of­fer “just-in-time” high value ser­vice. This is where drones would be best suited— de­liv­er­ing small, light high value items that are time sen­si­tive. In fact, Ama­zon has an­nounced plans to deliver pack­ages to cus­tomers’ doorsteps us­ing aerial drones. The on­line re­tailer hopes to use an ar­ray of drones car­ry­ing prod­ucts weigh­ing less than 5 pounds (2.27 kilo­grams) to users within 30 min­utes of an or­der be­ing placed.

The US Federal Avi­a­tion Ad­min­is­tra­tion is draw­ing up rules for the use of un­manned aerial ve­hi­cles in an­tic­i­pa­tion. Ri­vals have some­times mocked these plans, yet many com­pa­nies and gov­ern­ments are also se­ri­ously con­sid­er­ing the use of drones. The Dubai govern­ment re­cently un­veiled two pro­to­type drones de­signed to deliver prod­ucts such as medicines, documents and vi­tal pa­pers for civil au­thor­i­ties. They en­vi­sion that the sys­tem and the nec­es­sary reg­u­la­tory en­vi­ron­ment will be up and run­ning in the next fewyears.

In prin­ci­ple, cus­tomer de­mand for what drones could of­fer is clear. But then con­sider the ben­e­fit to so­ci­ety from the re­duc­tion in en­ergy con­sump­tion com­pared to the reg­u­lar trans­port de­liv­ery sys­tem— should we re­ally be us­ing high emis­sion trucks and vans to deliver small pack­ages in con­gested cities?

It’s true that de­liv­ery drones are an untested tech­nol­ogy, but the idea is sup­ported by the prin­ci­ple of mu­tual ben­e­fit. Even if some de­vel­op­ments may seem gim­micky ini­tially, drone de­liv­ery could be­come a re­al­ity soon. David Ed­wards and Nachi­ap­pan Subra­ma­nian are schol­ars with Not­ting­ham Univer­sity Busi­ness School in Ningbo.


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