After an eight-month waiting game, retail giant Amazon has cleared the first hurdle to launch its much-heralded drone delivery service. Last week, the FAA granted Amazon an experimental airworthiness certificate to the company’s logistics division. The certificate allows Amazon to fly drones for development and crew training. The retailer first applied in July after announcing its plans to get into the UAV delivery biz in 2013. Upon successful testing, Amazon is expected to deploy delivery drones with its proposed Prime Air service which the company says will result in 30-minute deliveries.
Industry experts are predicting that, just as Amazon changed the e-commerce game, so will the retailing giant change the way we send and receive packages. Look for the following trends to take wing in Amazon’s future:
1. The End of the Post Office As We Know It (and we feel fine)
What used to be called “real mail” (letters from Grandma, Playboy, IRS notices) is fast being relegated to the dust bin of relevancy with the evolution of e-mail. So much so, that the word “mail” has almost become synonymous with the electronic variety while the original paper kind gets tagged as “snail mail.” Despite heavy competition from UPS, DHL and Federal Express, the U.S. Postal Services has managed to cling to a shrink piece of the package delivery pie. But what will happen when the postal service’s bread-and-butter staple – small packages and enveloped content – begins to be delivered more and more by Amazon? With Amazon’s past ability to develop and adapt cutting-edge concepts, it’s not a stretch to predict the retailer could someday deliver first-class mail – a significant loss for the USPS.
“That falling business [first-class mailings] played a significant role in the USPS’s fiscal 2014 loss of $5.5 billion, its eighth consecutive year in the red. From 2009 to 2013, the volume of first-class mail deliveries dropped more than 20 percent. In the fiscal year ending Sept. 30, USPS deliveries declined to 155.4 billion pieces from 158.2 billion. First-class deliveries accounted for 2.2 billion pieces of that decline.”
Perhaps seeing the Amazon tsunami on the horizon, President Obama warned the USPS to eventually phase out human-delivered mail and deploy mail drones or face total closure. In 2014, labor costs accounted for 78% of USPS expenses overall. Given all the fiscal doom-and-gloom, it wouldn’t be a surprise to someday see an Amazon drone chasing down a lawsuit defendant with a registered summons or delivering Aunt Susie’s thank-you card.
2. High-Flying Inventory Fulfillment
The journey of a thousand Amazon drone steps begins in a fulfillment center before your Taylor Swift CD arrives at your door. The ability to deliver packages within a day or two has always been among Amazon’s strengths – especially with the introduction of its next-day shipping service, Amazon Prime.
To optimize the delivery process, Amazon has strategically built several fulfillment centers across the world. Essentially large warehouses that facilitate orders in key regions, these fulfillment centers rely on thousands of employees – known as “pickers” – to unpack incoming goods from manufacturers, place the goods in specific bin areas, pick those goods to fulfill orders and get them ready for shipment. As in many industries, drones could send such jobs the way of the buggy whip by providing faster, more precise warehousing capabilities. In other words, for some Amazon orders, a human hand may someday never touch a package until it arrives at your door.
Although the retailer hasn’t announced plans to use inventory drones, it would be the next logical step. In 2012, Amazon acquired Kiva Systems, a warehouse automation company – a move that could signal a deeper, machine-only philosophy. Other companies are already using drones at the warehouse level. As recently reported in DRONELIFE, DroneScan – a South African inventory management startup — uses UAVs to scan warehouse barcodes that would normally be too high to reach with conventional methods.
3. Amazon will kick-start better drone batteries…
If drones are to become mainstream, UAV companies are going to have to find a way to make batteries last longer, resulting in longer flights. Improvements in battery tech has so far been measured in minutes rather than hours, As reported in DRONELIFE concerning new drones at CES 2015, “the drones … demonstrated both incremental increases in single charge flight times and creative workarounds. Where the average flight time for a Phantom-sized drone has traditionally been stuck between 15- 20 minutes, new models from MaxAero and Hubsan are claiming to get up to 30 minutes.” That’s great but it’s a far cry from fueling a full day of Amazon deliveries. However, from an innovation standpoint, just about everything Amazon touches turns to gold. From digital books to magazine subscriptions to streaming services, Amazon tends to take fledgling technology and upsize it dramatically; pouring millions of dollars into R&D and acquiring tech startups like some actors acquire DUI arrests. There’s no reason not to expect Amazon to demand and get the best out of LiPo battery innovators, leading to better drone batteries for all operators. The company can’t afford the PR nightmare stemming from a dead drone crash.
4. … and bigger payloads
Amazon’s delivery drones will be tasked with carrying parcels that weigh less than five pounds – which represents 86% of their products they sell. In its initial application for FAA approval, Amazon said there was “a compelling need for the FAA to allow Amazon to test their systems to ensure the next evolution in package delivery happens in the U.S. first.” Part of that testing will likely seek to increase payload capacity. One promising innovation that seems right up Amazon’s technology alley would be to fund drone swarm technology, allowing a flock of autonomous, linked UAVs to work together to add muscle to an automated task. Although swarm drones in development thus far are tiny, a tech giant like Amazon could bring a bigger game to the task at hand.
5. Amazon drones (and drones in general) will get the green thumbs up
Using drones to deliver packages will not only lower costs but also lower carbon footprints. As Amazon delivery drones take to the skies, expect to see fewer, exhaust-belching delivery trucks on the road. UAV technology is already helping enhance green projects like eco-system regeneration. Given Amazon’s global stature as a responsible corporate citizen, look for the retailer to tout its drone service as a step forward in fighting oil dependence and promoting the airborne equivalent of a tiny electric car.
As with the rise of the Internet, Amazon’s drone revolution will likely raise the ire of some pundits, make tech nerds swoon and in general improve our lifestyle. Inevitably, just as online technology has become ubiquitous, so will drone delivery. Consumers won’t bat an eye at buzz of the friendly, neighborhood delivery drone.
In fact, Paul Misener, Amazon’s Vice President of Global Public Policy, predicts: “One day, seeing Amazon Prime Air will be as normal as seeing mail trucks on the road today, resulting in enormous benefits for consumers across the nation.”