HomeInsightsBlogDrones in Last-Mile Logistics: Hype or Help?

Insights

Blog // 19/05/2017

Drones in Last-Mile Logistics: Hype or Help?

Drones, logistics and delivery

Online retail sales are expected to increase to over £230 billion this year, with increases of 22.6% in North America and 11.5% in the UK, according to the Centre for Retail Research, which confidently predicts rises in spending across Europe as well. Online retailers are always happy to move more product, but energetic growth presents major logistical challenges. How can delivery be made more cost-effective and sustainable, particularly for the last section of a journey? Is drone technology the answer?

Recent drone developments

Mark Perrin - Menzies AccountantThere have been major recent advances in the technology. An early prediction by the manager of Google’s Project Wing had drone delivery for ‘commercial business up and running in 2017’. In 2016 7-Eleven and Flirtey partnered up to complete the first ever commercial delivery to a private residence. Not to be left behind, a few days later Amazon’s VP of Global Innovation Policy and Communications announced its partnership with the UK government and Civil Aviation Authority to carry out drone delivery testing on our fair shores.


Why is the last mile important?

The big e-commerce players are keen to dedicate resources to drone delivery. Engadget explains the rationale by looking at UPS’s prototypes:

“That last bit of distance between a UPS driver’s van and the recipient’s door is the least efficient portion of the entire shipping process. In fact, UPS figures that if it can cut just one mile from the 66,000 routes its drivers cover every day, the company could save upwards of $50 million annually.”

Drone tests conducted by UPS in Florida are aimed towards improving delivery standards for rural customers, ‘where our package cars often have to travel miles to make a single delivery,’ explained the company’s senior VP of global engineering and sustainability.

It’s not all about cost though. Logistics experts Bringg explains that transparency, efficiency and friction are major factors of a positive delivery experience for the consumer: a good delivery experience allows full visibility (think of tracking the whereabouts of your Uber driver), is completed efficiently and without undue delay, and minimises the effort required by the recipient.

Drones – efficiency and customer satisfaction

When drone pioneer Flirtey successfully completed 77 home deliveries from a 7-Eleven last year, efficiency reigned as each one was completed in under ten minutes from the point of order. Crucially, the customer satisfaction levels were extremely high: ‘100 percent of customers who participated stated they will continue to use Flirtey drone delivery service as operations expand.’

What hurdles are there to overcome?

DronesOn the surface drone delivery seems like the answer for online retailers looking to streamline the supply chain, but hurdles remain. For now, drones contend with restrictive weight limits and a limited flight range, which hampers their ability to make multiple deliveries. Perhaps more critically, there is a host of regulatory barriers to commercial drone flights in the US and the UK, all of which must be addressed before drones become commonplace in the logistics landscape.

For more information on the value of drones to logistics, contact Menzies Head of Transport & Logistics, Mark Perrin by email at mperrin@menzies.co.uk or by phone on 01489 566702.

Find out more about Menzies Transport & Logistics services.

Print Friendly, PDF & Email


RELATED CONTENT
  • How competitive is the UK’s tax system in relation to others?

    Although the government is proud of the UK’s position with its most competitive tax system in the G20, initiatives such as the BEPS (Base Erosion and Profit Shifting) project, which has already been adopted by 124 countries, making it harder to stand out from the crowd. With tax becoming an increasingly important global topic, the […]

    Print Friendly, PDF & Email
    READ MORE >
  • Is your profit data misleading you? Part 1 – valuable insight

    Tim Dunn – Strategic Advisory Partner Developing good products and services is important, but it is not everything – commercially there are a number of pieces of the jigsaw that need to come together if a business is to achieve its potential and fulfil the owner’s dreams. Ultimately, profitability must be a key consideration – […]

    Print Friendly, PDF & Email
    READ MORE >
  • Is your profit data misleading you? Part 2 – applying to the business

    Tim Dunn – Strategic Advisory Partner In part one we examined the data challenges that face many SMEs and the power in defining what data you need and the difference between detailed analysis verses meaningful analysis. Now it’s time to consider what parts of your business you want to understand better. Stage 1 – define […]

    Print Friendly, PDF & Email
    READ MORE >