COLLEGE, PARK, Md. -- Though Google and Amazon, among others, have begun testing delivery drones, they are at least five years from launching.
Business and engineering experts (below) at the University of Maryland are available to expand on their following comments. They say:
- The FAA will take at least five years to develop and iron out a policy framework.
- Sensing-avoiding obstacles, air traffic control compatibility are among delivery-drone technologies under development
- Upon FAA clearance, Amazon and Google are poised to prosper; the likes of UPS and Fed Ex would suffer
- Hacker hijackings and delivery operational costs will determine viability in uncharted commercial space
- Publicity value from “talking about delivery drones” is drying up for companies.
"If cleared to operate now, the small helicopter drones could use GPS to fly to a front door and text-message its delivery recipient to go the drone and take possession of the package. However, drones need further development before they can arrive and deliver packages safely.
“To safely unload the package, drones will require novel detect and avoid technology to safely navigate obstacles such as trees, bushes, people and cars and be equipped to communicate with air traffic controllers. For air traffic control, the communications and collision avoidance devices on aircraft are too big and heavy for a package delivery drone.”
"These technologies are under development, and (UMD's Autonomous Vehicle Lab) has produced technology behind a possible prototype for a sense-and-avoid system – the Panoptes eBumper. The product, with acoustic sensors that detect obstacles within 10 feet, was introduced to the hobby drone market this summer."
Projecting Market Impact, Disruption
Hank Lucas (301-405-0100; firstname.lastname@example.org), professor of Information Systems in UMD’s Robert H. Smith School of Business and author of “The Search for Survival: Lessons from Disruptive Technologies,” says the likes of Google and Amazon are poised to capitalize on delivery drones at the expense of bigger carriers:
“Strategically, delivery by drones would greatly benefit a company like Amazon, which incurs very high UPS and Fed Ex bills – especially with Amazon Prime and its $25-30 overnight and two-night shipment costs. (In its third quarter, Amazon had worldwide shipping costs of $1.53 billion and $811 million in net shipping costs. Net shipping costs accounted for 4.7 percent of all worldwide sales.) By utilizing delivery drones Amazon will hurt Fed Ex and UPS by cutting into their revenues.
“Commercial drones also initially stand to disrupt big carriers like FedEx and UPS, which have trucks full of parcels for delivery along a given route, whereas Amazon could have three parcels for delivery in a neighborhood. So, Amazon could send its “octocopter” drone out three times to deliver packages because it has a small payload – you couldn’t put the contents of the UPS truck on the drone.
“Though Amazon seems to stand apart in being able to initially capitalize on drones, technology always gets cheaper. A common mistake is to believe ‘technology is too expensive or unproven.’ But (to quote a familiar adage), it’s going to get ‘cheaper, faster and smaller’ – it’s going to happen.
“Delivery drones also will disrupt the U.S. Postal Service – or whatever’s left of it – if drone feasibility and adaptability filters down to smaller organizations.”
Drones as a Brand Attention-Getter
P.K. Kannan (301-405-2188; email@example.com), Ralph J. Tyser Professor of Marketing Science in the Smith School, says Amazon’s use of drones as an attention-getter for its brand has been an interesting strategy, but with a short shelf life:
“The publicity associates Amazon and Google with an innovative bleeding-edge technology, a positive buzz, which contributes to its overall image as a tech savvy company. This may work for a while, but this buzz is likely to dissipate with the time it takes for the technology to be a commercial reality. By all accounts, the commercial viability of the technology is not immediate and so this buzz will last a bit more and should die down soon. Others may join the bandwagon but the peak of such news is already behind us.”
Conditions for Commercial Viability
Kannan cautions that hackers and operational costs could hinder delivery drones from being widely adopted:
“Besides technological advancement, commercial viability depends on whether the technology can be operated profitably. This depends on factors including costs incurred in securing the delivery of goods and ensuring that the drones are not ‘hijacked’ by hackers – think of the reported Iranian-hacked and hijacked U.S. military drone in 2011. Companies also will need to consider the relative costs of operations vis-a-vis the current means of transport, plus the volume of goods handled by the drones, and the premium delivery charges customers are willing to pay for immediate delivery by drones.
“If these non-drone (or traditional) delivery costs are really low, (drones) may not be viable for transporting low-priced items. On the other hand, the high-value deliveries may attract hackers and hijacking activity. Thus, even assuming that the technology is sophisticated and that a policy is in place for commercial operations of drones, we might not see extensive deployment of drones in the initial phases other than as smaller-scale attention-grabbing ploys.”
UMD Bids to Lead UAS Center of Excellence
Hank Lucas says: “It’s hard to envision a hundred drones in your neighborhood – when you think of all the types of companies that do home delivery service – from food to flowers… Air traffic control for drones is a challenging problem.”
To meet such a challenge, the FAA has called for proposals to launch a national UAS (Unmanned Aerial System) Center of Excellence to accelerate the technologies to support commercial drones and support the FAA in crafting a policy framework.
One such bid will come from UMD. Humbert and a colleague from the University of California, Berkeley are preparing a proposal involving several other universities and industry partners.
“This is a huge effort,” Humbert says. “It’s in conjunction with (UMD’s) recently opened UAS Test site in southern Maryland and would open up huge markets for all sorts of industry partners.”
The Center of Excellence proposal is due Sept. 15, with a decision expected from the FAA before the end of this calendar year.