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Packages from Heaven

The race is on: Major logistics companies will soon be delivering their goods to the customer via drones. But do these winged helpers truly have a chance of establishing themselves in the marketplace?

23 Feb. 2016

Today you can place an order and have it delivered just a few hours later, and a growing number of companies are already offering this convenient, same-day delivery service. While the consultants at McKinsey are anticipating a total sales volume of €3 billion by 2020 , equating to a market share of roughly 15 percent, for standard packages delivered the same day in Western Europe, that figure is less than one percent today. To put this trend into actual practice in the industry, it will be necessary to introduce new delivery channels. The drone looks like a viable solution to the problem – but can it actually “deliver” on its promises?

Drone delivery beginning in 2017?

There is little doubt that major online retailers have long since jumped onto the bandwagon and want to offer speedy deliveries using drones. Amazon, one of the biggest in the industry, is planning to introduce "Prime Air". This delivery service is expected to be able to transport packages weighing up to 2.5 kilograms by air within 30 minutes. According to Amazon manager Paul Misener, the drones will have a delivery range of approximately 15 kilometers (9 miles). The second generation of Amazon drones was introduced at the end of last year.

Google, or "Alphabet", is also pursuing similar goals with its "Wing" project. The company plans to launch commercial drone delivery next year. Google X, the research laboratory that also designed Google Glass, is currently working on the development of these small aerial vehicles.

Package copter grounded

In Germany, Deutsche Post just introduced the third generation of the “DHL Paketkopter” (package copter) at the end of January. At a speed of between 70 and 130 kilometers per hour, the Deutsche Post drone 3.0 should be able to travel eight kilometers in six to nine minutes. Due to bad weather conditions there was no demonstration at the time of the presentation, so it remains unclear just how advanced the technology actually is. But development work does appear to be moving ahead. In comparison: The previous Paketkopter 2.0 flew from the North Sea coast to the North Sea island of Juist and back 40 times. Depending on the given weather conditions, it took the drone around 16 minutes to travel the 12-kilometer distance.

Exactly when the first goods will be delivered by drone remains to be seen. And there are several different reasons for that. First, the technology is still far from being fully mature – the development work on drones that automatically avoid obstacles in their path is still in its early stages. Second, there are a number of legal hurdles to be taken before the technology can be used for commercial purposes. That’s because there is one thing all the various drone visions have in common: They all fail to comply with current aviation regulations.

A legal challenge

While it is still possible to use a drone weighing up to five kilograms privately without a license in Germany, a special permit from state authorities is required for commercial use. Personal rights as well as liability are just two of the keywords that will be seen in a new light in connection with drones – after all, the delivery drones are equipped with cameras and could possibly be the cause of serious damage in the event of a crash. That’s why it’s already forbidden to fly them in many cities. The topic of navigation also presents a major challenge: If the pilot can’t see where the drone is flying, it is not possible to guarantee the winged vehicle will avoid all objects in its path, as expected and required by law.

The Road Traffic Act is also closely connected to the legal question of exactly where drone traffic should be allowed to travel. Amazon already suggested a solution to this problem last year: Delivery drones would fly in predefined corridors at a safe distance from regular airspace. Only those drones that met certain standards would be allowed to use such corridors. Amazon and Google are already working together with NASA on a viable monitoring system. Such a system could, for example, be operated using cell towers.

Just pie in the sky or impending reality?

Are drones destined to be the new package "deliverymen" of the future? As far as the major online retailers are concerned, this idea is closer to reality than it may seem. Nevertheless, the technology is still immature. There is also no real consensus between the responsible authorities regarding the legal issues involved. And last but not least, the technology confronts not only companies, but consumers as well, with enormous costs. How much is the customer willing to pay for a service like this one – and what is the cost-benefit ratio? There is still a long way to go before online orders are delivered within 30 minutes, tracked by GPS along the way.

But the technology continues to advance – and has now unleashed a veritable burst of creativity in research departments. Visitors to the Dronemasters Summit at CeBIT 2016 will be able to see the results and promising prototypes. The event includes an exhibition, conference, air shows and drone racing, bringing manufacturers and service providers together with investors.