Drones to become a mainstream delivery channel by 2040

Cyberjaya - June 29

Drones could account for one-third of same-day package deliveries by 2040, as unmanned technology and network scale dramatically bring down costs. The estimates come as clearer skies amid the Covid-19 lockdown have enabled faster and more expansive testing of drone delivery systems.

While security and privacy concerns still see the UK drone market’s wings clipped, a mounting body of evidence suggests the technology will be worth billions to the national economy in the near-future.

Previously, for example, PwC research suggested that by 2030 the skies above Britain will be a very different place – estimating that, rather than today’s chaotic swarm of private toys, there will be a highly coordinated hive of more than 76,000 sophisticated drones performing all manner of tasks. The commerce this supports could provide a shot in the arm worth £21 billion to UK GDP.

With the quieter skies of the Covid-19 lockdown, meanwhile, the technology has found space to accelerate its growth and development over the last year or so.

A new report from L.E.K. Consulting suggests that the rapid expansion of the drone market could see it account for a large portion of the package delivery market by 2040. While the exact market share will depend on how transport operators configure their networks and the comparable cost of transporting goods through road-based methods, this could see drones account for more than 30% of same-day package deliveries by the close of the next decade.

The release from L.E.K. did also concede that drones are unlikely to replace traditional trucking, however as supply chains look to transform their operations following the disruption of Covid-19, they will add to existing logistics systems to avoid congestion. The transport of cargo by remote pilots or autonomous technology that has attracted the attention of the world's biggest companies – with Amazon.com and Chinese e-commerce giant JD.com both talking up the prospect of deploying drones for deliveries on a large scale, while Google has recently sought approval to use them to research firefighting.

One of the key advantages of drones, according to L.E.K., is the ability to take off and land vertically – meaning they require less space than planes or helicopters – and the industry could be worth several billion dollars in a country like Australia as a result. However, a number of hurdles remain, including building sufficient scale that it becomes more cost effective than a taxi or van, as well as continues privacy concerns regarding the aircraft flying above cities and homes.

Illustrating these concerns, previous research of PwC in Ireland found that 58% of Irish business leaders who have previously used drones believed that they lack drone knowledge – making errors surrounding their use more likely in the process. This will make for worrying reading for businesses looking to leverage the technology, especially as a majority of 88% of business leaders and consumers believe that the public perception of drones is negative, while 85% are lukewarm about commercial drone use in the best case scenario.