The innovation race for consumer parcel delivery with drones is on. After UPS and Google, Amazon is the third company to achieve this milestone from the Federal Aviation Administration (FAA) enabling expanded use of their drone delivery system to connect rural destinations for improved delivery times.
While Google-Alphabet’s drone delivery service Wing Aviation and UPS’ Flight Forward have both achieved this certification, Amazon’s approval starts with a business model that potentially integrates seamlessly into existing logistics systems.
Also, Walmart is partnering with Zipline to make on-demand deliveries of select health and wellness products in the US early next year.
Harrison Wolf, Lead, Aerospace, and Drones, World Economic Forum presents three factors deciding who will win the race for delivery domination in the US.
1. Who builds the drones?
Amazon and Google build their own drones, UPS doesn’t. Choosing to build your own drone is risky. Amazon and Google have developed their own hardware, creating tighter innovation processes and quicker evolution. They also continue to develop the connective technologies that will maintain and manage their operation. This has the benefit of allowing exactly the type of aircraft changes they need, ensuring streamlined development processes and rapid evolution to meet their needs, according to Harrison Wolf.
UPS partners with innovative start-ups in which they have invested such as Matternet, Wingcopter, and Zipline. By partnering, they have been able to reduce their risk exposure, influence design through adoption, and focus on their core parcel delivery business.
2. Is there an existing logistics network?
UPS and Amazon have existing logistics networks and demand. Google doesn’t. UPS and Amazon are their own customers when it comes to drone delivery. Google, on the other hand, needs to partner with businesses outside of the standard Amazon or UPS delivery network for drone delivery.
The real question is whether you would rather be a supply-chain company looking to integrate technology or a tech company looking to create and refine one piece of an entire logistics network. To date, Google’s delivery network has focused on tests with small businesses.
UPS has applied its logistics expertise in delivering prescription medicines. Amazon has had very limited operational testing with customers though they have been able to test on-demand delivery of goods in the UK.
3. What’s the tech X-Factor?
All three major players in the drone delivery race in the US have real differentiators when it comes to technology. Wing, having been spun out of the Google X lab, can leverage close partnership to any of Google’s other products, including high-resolution mapping, autonomous technologies, health-sensor data, and a plethora of other lesser unknown or in-development technologies that can act as catalysts for rapid change or application, according to Harrison Wolf.
Amazon’s clear understanding and domination of e-commerce – from product development to consumer behavior to delivery – may be just the thing that sets them apart. UPS’s global experience in supply chain and logistics management, combined with trust from both consumers and government, may provide the wisdom and character needed to promote the societal acceptance needed.