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Drones for business

Will drones revolutionise last mile delivery? Riad Mannan writes

The use of Unmanned Aerial Vehicles (UAVs), more commonly known as drones, in the logistics sector has been touted for some time. They have been developed over many years, and like many innovations, they started out as a military / government initiative. In the recent past drones have indeed be used for military strikes or intelligence purposes and perhaps with these negative connotations, along with privacy and safety concerns, it is no surprise that the general public are wary of the use of drones in civil and commercial environments, and regulatory changes remain slow.

Nevertheless, with the maturing and miniaturization of applicable technologies, drones have now been developed for much more than the military use of its origin. As the technology becomes more advanced and costs fall, more civilian uses of drones have started to emerge. Now there is growing acceptance by governments, commercial organisations and indeed the public that the use of this emerging technology in the shape of drones can be a game changer and bring extensive benefits for all.

In recent years, drones have been used in a wide range of activities from inspection of offshore oil and gas platforms, search and rescue efforts, news broadcasts, aerial photography, land surveys and collecting atmospheric data.

Internationally, the logistics industry and its clients have also taken tentative steps in researching, testing and developing drones for its own use. Global companies like Amazon (Prime Air), Google (Project Wing) and Walmart have proposed the use of drones for home delivery, roadside pickup and checking warehouse inventories. However, commercial use of drones are getting slowed down or in some cases stopped by regulations and concerns about safety, security and privacy.

In the US for example, the Federal Aviation Administration (FAA) currently only authorizes the use of drones for commercial or business purposes on a case-by-case basis and it is in discussions with several industry associations to promote safe and responsible use of unmanned aircrafts.

In Europe, due to disparate and fragmented national regulatory frameworks, the European Aviation Safety Agency (EASA) has suggested that further common regulations on commercial drones across the EU is required to safeguard safety, privacy and data protection.

Similar concerns are present in the Middle East with countries like Saudi Arabia and Qatar banning commercial drones and even private ones, particularly when cameras are attached. In this respect, the UAE is slightly different and perhaps ahead of the game. This in part has been due to the UAE Drones for Good Award, launched by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, in February 2015.

In an effort to demonstrate practical capabilities which can be used for the good of people and business, the award has opened up the space for new technical solutions and industry applications – including medical, emergencies, search and rescue, and most relevantly for here, logistics.

According to Marsh, the global insurance broking and risk management firm, the drone market for commercial use is estimated to reach over $1.2bn by 2020 and according to the UAE Drones for Good Award, the drone industry will have an economic impact of about $8 billion by 2025. So the potential usage is there for the logistics sector, yet concerns remain about legislation, privacy, security and integration into existing networks.

Drone Developments

There are a variety of drone models which are being developed. All of them have to consider and balance the need for appropriate payloads, engine type, size, weight, power source, take-off modes, speed, reach, noise levels, altitude, resistance to harsh weather conditions and of course costs.

From fixed wing drones which can cover longer ranges but have to take off horizontally to multicopters, which are inexpensive but have limited payloads, the range of drones currently being developed is multifaceted – and the potential applications for the logistics industry, though in its infancy, can be widespread.

Several considerations have to be taken into account when determining the use and value of drones to the logistics industry. Will it be more cost-effective to use drones instead of traditional transport modes like road and rail? How flexible can drones really be? Can regulations keep up with technological advances? How much can be transported at any one time? What long-term value can drones provide logistics companies in terms of being a differentiator? Will drone applications complement existing business processes? Will they allow companies to create new businesses and operating models?

All these questions provide a lot of food for thought for companies across the value chain from logistics operators or freight forwarders.

Last Mile Delivery Experiments

Whilst research shows that there are identified and tangible demands for the use of drones in logistics, the day-to-day application of them is some years away. Given the complex mix of advancing technologies, regulations and application development, the transportation of goods over long distances with significant tonnage internationally is a long-term prospect.

However, in the short-term, perhaps the logistics industry can best use drones in the ever-important last mile. Companies like DHL and Swiss Post have been researching and experimenting with the use of drones for several years in an effort not just to test technical capabilities, but the commercial and operational benefits too.

The drones used by Swiss Post are very light and are capable of transporting loads of up to 1 kilogram over more than 10 kilometres with a single battery charge.  They fly autonomously, following a clearly defined and secure flight path.
Since 2013, DHL has been researching the use of drones to delivering different loads, over diverse terrains and weather conditions – and their evolution is noteworthy. Their first foray included Parcelcopter 1.0 which was manually controlled, a payload of 1.2 kg, speed of 43km/hr and flew a distance of 1 km. Their latest drone (Parcelcopter 3.0) tested between January and March this year is autonomous, has a payload of 2 kg, speeds of 70km/hr and can fly up to 8.3 km. While drone trials in urban areas are some time away the testing of Parcelcopter 3.0 over difficult terrains in adverse weather conditions in Bavaria bode well.

Integrating Drones to Existing Supply Chains

Significantly, DHL showed that the last mile delivery via drones can be integrated into an existing supply chain. The trials showed for the first time that a parcel delivery provider can directly integrate a logistics drone into its delivery chain. Private customers were invited to test out the specially developed Packstations, dubbed the Parcelcopter Skyport. During the three month trial period, they would simply insert their shipments into the Skyport to initiate automated shipment and delivery per Parcelcopter.

Speaking to Logistics News Middle East, Dunja Kuhlmann, Spokesperson for DHL said: “DHL is convinced that copter deliveries can create substantial added value for society. The DHL parcelcopter is not tied to a highway network, it can deliver parcels even when faced with natural barriers like water and mountains and as a result, it can be a great help in situations where a normal delivery is not possible.”

Whilst these trials demonstrate that last mile deliveries made by drones can be integrated into the logistic value chain and therefore bring significant benefits and costs and time savings, there is a step-by-step process in place.
“At the moment, we have no specific plans for using DHL Parcelcopters in normal delivery operations. This is a research project designed to test and evaluate the possibilities of such a type of delivery. We will now analyse the data we have collected during the recent tests in Bavaria and evaluate our findings. Only then will we decide on further steps and future activities.” she added.

Privacy, Safety and Regulations

Some of the main obstacles slowing down the application of drones in the last mile urban environment are the interlocking issues of privacy, safety and regulations.

In terms of GCC regulations, there is very little common ground as they vary from country to country. Airspace restrictions apply over most major cities and an increasingly congested skies mean that regulations have to be developed to allow commercial drones to safely fly with airplanes and helicopters.

Privacy and security concerns by the public and government is another area to overcome before logistics companies can fully utlise drones – particularly ones with cameras. The UAE recently announced that all drones have to be registered with the General Civil Aviation Authority after recreational drones strayed on to flight paths at Dubai airport and grounded passenger planes. Additionally drones with fitted cameras are illegal (as they are in Saudi Arabia) over privacy and security concerns. Whether these restrictions will also apply to commercial drones used in the logistics sector for example is still unclear.

Moving Forward

Despite these challenges, the future of using drones for logistics almost seems inevitable. Like any new disruptive technology, the envisioned application of drones will be far ahead of public acceptance, business readiness and regulatory change. However as logistic operators in the last mile continue to test and refine the possibilities, there will be a time when the obstacles will dissipate and logistic drones over the skies will become the norm – it is only a matter of time.

 

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