What odds online delivery in game of drones?

Many current commercial applications using drones involve some level of image capture that is analysed using software to provide a detailed map or data points to help solve a problem or improve efficiencies in working practices. UAVs (Unmanned Aerial Vehicles) for logistics and distribution, on the other hand, have the sole responsibility to deliver a physical item either to improve a service offering, such as faster delivery times, or to provide a more cost efficient service to inaccessible areas, such as remote islands. They can also alleviate more environmental concerns, such as reducing transport emissions and easing road congestion.

Of all the market sectors where drones are being rolled out, logistics and distribution are the most likely to fall under the scrutiny of regulators owing to the need for deliveries to be made autonomously and invariably out of LoS (Line of Sight), a key attribute underpinning most of today’s UAV rulings. As we observe in our recent research on the drones space, while such a service will not only need the requisite technology being made available on the UAV to carry out an autonomous delivery, as well as having the ability to carry an additional payload, it is also likely to fall foul of the regulations laid out by aviation regulators for civilian UAV use.

DHL introduces commercial delivery service

The strength of regulation will also be determined by the areas in which deliveries are being made. Specifically, if the aim is to provide a drone delivery service in an urban, densely populated area, then regulation will be much stricter than for delivery to more remote and isolated areas. Indeed, delivery services serving the latter type of area have already been launched by German delivery company, DHL, which launched a commercial service in September 2014.

• This was the first time in Europe that a flight by an unmanned aircraft was operated outside the pilots field of vision in a real-life mission.
• The service uses an autonomous quad-copter to deliver small parcels that are held in a special air-transport container.
• Its first deliveries were to Juist, a small island in the North Sea just off the German coast, inhabited by 2,000 people. Deliveries to the island included medication and other urgently needed goods.
• In an effort to comply with Germany’s regulations, the DHL drones fly under 50 metres to avoid entering regulated air traffic corridors
• Although the flight is fully automated, the parcelcopter is constantly monitored by a ground station on the German mainland for safety reasons.
• The parcelcopter flights are scheduled for times when conventional methods of delivering packages to the island, such as via ferries and manned flights, are not available.

Despite this passing muster in Germany, rules for autonomous vehicles differ in countries around the world, although the LoS provision may be tempered once UAVs are capable of making decisions about object avoidance. This ruling may be weakened even further if a UAV service is restricted to use only in remote and virtually uninhabited areas, such as across seas or deserts.

Figure: DHL Parcelcopter 2.0

Source: DHL

Commercial Delivery Drones: A Threat to Safety and Security?

However, if drones become prevalent in the world’s airspace, what happens when they inadvertently fall out of the sky on to people or property, or if they go rogue? In tandem, while the issue of hardware falling from the skies is one thing, the public is also becoming increasingly wary of their actual uses, many of which could invade their privacy, safety, or worse.

Aside from the mass of compliance issues that need to be addressed, it is the potential of a major UAV incident and the erosion of personal freedoms that could virtually destroy what promises to be a burgeoning industry for commercial drones before it has really begun.

Much of this concern is over an invasion of privacy and safety, which encompasses a whole host of scenarios from snooping, spying and stalking to criminal surveillance of property and terrorism. The possibility of drones being used to deliver a payload of explosives into a built-up area which could then be remotely detonated (and have that detonation streamed online for propaganda purposes) is very real and that alone should give regulators pause for thought before considering any amendments to existing legislation.

While the use of drones to deliver online retail purchases may therefore gain traction as a means of reducing logistics costs in reaching small, isolated communities, it is highly unlikely that permissions will – or should - be granted for usage in an urban environment. While online delivery is an attractive use case from a commercial and consumer perspective, the safety of the population must be paramount: Ultimately, the combination of risks would be simply too great to justify any deployment.

About Windsor Holden

Dr Windsor Holden is the Head of Forecasting & Consultancy at Juniper Research and the co-author of Drones: Consumer & Commercial Applications, Regulations & Opportunities 2015-2020 research, published in November 2015.

About Juniper Research

Juniper Research specialises in identifying and appraising new high growth market sectors within the digital ecosystem. Market sizing and forecasting are the cornerstones of our offering, together with competitive analysis, strategic assessment and business modelling. Juniper have unrivalled experience and knowledge in the digital commerce and money sector.