The Federal Aviation Authority (FAA) has published a petition that Amazon Prime Air, a drone operating subsidiary of Amazon has requested an exemption to operate its customized MK27 drone for deliveries under the Part 35 air carrier certificate. The petition, if passed, will allow the company to operate a delivery system that will enable reaching packages to customers in 30 minutes or less, using unmanned aerial systems.
Amazon Prime Air plans to deliver packages weighing up to 5 pounds to customers within 30 minutes or less using its MK27 drone. The MK27 is capable of delivering packages within a range of 15 nautical miles to different customer locations and designated drop points, which include up to 85% of the products sold by Amazon Prime as per the application letter submitted by Sean Cassidy, Director of Safety and Regulatory for Amazon Prime Air. The company has stated that their Prime Air drones will fly below a height of 400 feet and operations will be over areas which have less population, obstructions, avoid sensitive flying areas, such as military and government restricted areas, including those with communication coverage, and will be liable to FAA’s approval in the form of a certificate of authorization.
Amit Patil, a Senior Research Analyst in the Aerospace and Defense sector at MarketsandMarkets™, shares his views.
The growing demand for the fast delivery of packages by consumers has led to the increased adoption of aerial delivery drones in the global e-commerce industry, which, as yet, is in the testing phase. The rise in the number of customers willing to pay for same-day delivery has led to the development of advanced aerial delivery drones.
Companies operating in the logistics & transportation, retail, and healthcare sectors are undertaking efforts to integrate aerial delivery drones with their business models for the smooth and successful execution of autonomous last mile delivery of packages. However, these companies are unaware of the legal aspects related to the use of drones for the delivery of products. Regulatory authorities across various countries are amending policies to ensure that aerial delivery drones can be used in a secure and business-friendly manner. According to MarketsandMarkets™, the autonomous last mile delivery market is projected to be worth USD 91.5 billion by 2030, growing at a CAGR of 20.3% from 2019 to 2030. Rising adoption of aerial delivery drones and ground delivery vehicles to deliver groceries, food items, parcels (e-commerce), medicines, etc., and increasing funding by venture capitalists for business expansions and R&D for aerial delivery drones and ground delivery vehicles are fueling the growth of the autonomous last mile delivery market across the globe.
FIGURE 1 AUTONOMOUS LAST MILE DELIVERY MARKET
Source: MarketsandMarkets™ Analysis
IMPACT ON COMPETITORS
Prime Air is Amazon’s pioneering service, which is expected to disrupt the logistics business. The approval will provide Amazon a competitive lead in the autonomous last mile delivery market. Several other companies, such as Alphabet’s Wing, UPS, DHL, etc. have been testing the use of drones for package deliveries since 2005. In April 2019, Wing’s delivery drone received FAA clearance to drop packages at customer locations in Virginia. In March 2019, FAA approved the use of drones by United Parcel Service (UPS) which enables the delivery of medical samples through the use of unmanned drones at the WakeMed’s flagship hospital and campus in Raleigh, North Carolina. The increasing adoption of innovative technologies in the e-commerce and transport & logistics industries is expected to fuel the autonomous last mile delivery market.
Several startups have received funding from venture capitalists to enable the adoption of aerial drones for the delivery of their products. Companies such as Flirtey and Matternet use low-cost and light payload drones for the smooth delivery of their small parcels. Increasing investments in the autonomous last mile delivery market are expected to enhance the operational efficiency of first and last mile logistics networks. Aerial delivery drones are expected to help increase the delivery speeds of products in crowded megacities. In addition, drone deliveries are also environment-friendly (low carbon footprint and less energy consumption), which is leading to the rising adoption of aerial delivery drones across the globe.
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