Yahoo News 
JD.com's next delivery drones
BI Intelligence
This story was delivered to BI Intelligence "E-Commerce Briefing" subscribers. To learn more and subscribe, please click here.
Chinese online retailer JD.com is developing new drones capable of transporting 1 ton of goods or more in a single trip, The Wall Street Journal reports.
JD.com already operates one of the more extensive drone delivery networks in the world, with more than 30 drones delivering packages weighing up to 33 pounds to remote parts of China. The drones have helped drastically lower shipping costs, as its drone shipments cost less than $1 per trip.
The larger drones could potentially transport goods from rural areas bound for cities, such as produce from farms, opening up new types of shipments for JD.com’s drone network. However, the larger drones will also require heavier infrastructure investment — like dedicated landing pads — and more fail-safes including redundant flight systems because of the increased damage they could cause in a crash. JD.com has made significant investments in its logistics operations in rural China, though, and is clearly willing to pay these upfront costs to enable further expansion as it tries to burnish its reputation for speedy delivery in China’s villages.
Among the many ways that drones can transform business operations, few have received as much attention as delivering packages to consumers’ homes. Drones could allow companies to bypass the many challenges involved with the "last mile" of delivery — the last leg of the journey when a package arrives at the customer’s doorstep.
This last mile is the most expensive and inefficient part of parcel delivery, and a wide range of companies are exploring how drones can speed up the last mile and cut costs. E-commerce companies want to cut delivery times and costs to improve their customer satisfaction and loyalty, while legacy retailers seek the same advantages to grow their online sales.
Meanwhile, logistics providers are experimenting with drone delivery to cut costs and ward off new competition from startups and technology companies, which have latched on to drone delivery as a potential path to disrupt (or partner with) legacy logistics firms.
However, delivering packages by drones to consumers’ doorsteps is still years away from becoming a common occurrence. Important obstacles still need to be overcome relating to drone regulations, the development of autonomous flight and traffic control systems for drones, and consumer acceptance.
Jonathan Camhi, research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on drone delivery that examines the benefits it can provide as an e-commerce fulfillment method, and explains the different approaches companies are taking as they experiment with the nascent technology. In addition, it details the key players working in the space and discusses the challenges drone delivery faces in reaching mainstream adoption.
Here are some key takeaways from the report:
Drone delivery offers tremendous benefits in the form of cheaper, faster shipping. This could accelerate the growth of online retail sales as free and fast shipping are the most enticing factors drawing consumers to shop online more often.
There are two main types of drone delivery companies are exploring: home drone delivery and supply chain delivery. Although home drone delivery receives the bulk of public attention, using drones to make deliveries within the supply chain can smooth out the fulfillment process and increase efficiencies.
Mainstream adoption of drone delivery will take place in stages over the next few years as regulations are put in place and drone technology improves. Right now, most tests are extremely limited in scope, take place in rural areas, and do not actually deliver packages to customers’ front doors. These tests will gradually progress, eventually bringing drone delivery to more customers in populated areas.
In full, the report:
Provides an overview of how drones can transform parcel delivery by automating logistics, particularly for last-mile deliveries.
Examines the efforts of several companies across industries that are experimenting with drone delivery.
Highlights the major obstacles that remain in making drone delivery mainstream.
Provides a timeline for the adoption and scaling of drone delivery services in the US.
Interested in getting the full report? Here are two ways to access it:
Subscribe to an All-Access pass to BI Intelligence and gain immediate access to this report and over 100 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now
Purchase & download the full report from our research store. >> Purchase & Download Now
See Also:
