“Drone hives” plan by Amazon for local deliveries ?

An article in USA Today (June 23, 2017) describes a patent awarded to Amazon that describes multi-story warehouses described as drone towers located close to cities. The patent describes these warehouses as locations where packages might be stored prior to customer delivery. Will such drone driven deliveries enable Amazon to reduce their reliance on package carriers and increase delivery flexibility ?  Can one imagine drones doing both deliveries and pick up of returns ? Would you expect drone to be more cost competitive in rural or urban areas ?

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This entry was posted in Capacity, consumer, Cost, delivery, logistics, Supply Chain Issues and tagged , , . Bookmark the permalink.

3 Responses to “Drone hives” plan by Amazon for local deliveries ?

  1. Kyle Harshbarger says:

    The best argument is for a medium-density area, and this is due to feasibility and economy. Low-density areas do not have large enough demand to justify drones over their traditional ground delivery. High-density areas lack landing space for the drones. Medium-density areas work because of the accessibility of are to land and enough people to justify the overhead investment.

    The other interesting question is whether operating costs justify point-to-point delivery instead of milk routes. We need to know much more about that.

  2. Muhammed Karadayi says:

    Even though Kyle pointed out an important fact about high-density areas lack landing space for the drones, I think Amazon’s main goal is to use drones in high-density areas for quick deliveries. Because Amazon’s traditional fulfillment centers are located on the outskirts of urban areas because of their size, Amazon wants to build new fulfillment centers in cities to reduce delivery times and increase flexibility in delivery types by using the drones. With this new competitive strategy, Amazon targets to increase its marketshare and customer base due to fast delivery.

    But, this new patent will face some challenges which are;
    -The security of the drones against external factors like weather conditions, and theft,
    -The lack of landing space in big cities,
    -New regulations to specify drones air activity which is not legal in the US currently,
    -High fixed costs of the new systems,
    -Competition from its rivals,
    -Malfunctions within the system while drones are in the air.

    Also, Amazon already started to run tests for small parcels and announced that the company successfully tested its Prime Air drone service in the UK in December 2016. I think the new patent will be a breakthrough for delivery times if it becomes successful.

  3. Aditya Dembla says:

    I would like to share some insights from my experience with Flipkart supply chain as well. There are multiple preliminary questions before coming to a conclusion whether drones will be more cost efficient and speedy than conventional methods of delivering shipments:
    Q1) How may no. of packages/maximum weight, a drone would be able to carry? A biker usually carries 30-40 shipments while a van carries more than 150 shipments in one round.
    If Amazon is able to pull off similar no. of deliveries using drones, it would be super competitive both in terms of cost and speed.
    Q2) Would drone require a person to receive the shipment or the delivery can be unmanned (customer not available)?- This might limit the customers to whom the deliveries can be made.
    Q3) I am not sure how is it done in US but in India there is a basic quality check of the product involved at customer’s doorstep before picking up the shipment. Is the drone capable enough to check the basic attributes of returned products. What if a customer is returning a counterfeit product? Which party will be accountable in this case?

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