Can UPS fly past Amazon in drone delivery?

Discussion
Photo: UPS
Mar 16, 2017
Matthew Stern

Amazon has grabbed many of the recent headlines with its efforts to use technology to eventually dominate last-mile logistics. But other big names in delivery are not sitting idly by, as seen by UPS’s latest move.

UPS has begun testing a delivery truck that acts as a mobile drone base, Business Insider reported. The vehicle features a drone “nest” on the roof which houses a drone capable of flying for 30 minutes and carrying 10 pounds. The roof-mounted drone is meant to reduce the number of miles driven to deliver packages.

The idea of using a mobile base for drones has gotten popular as the industry tries to figure out a working paradigm for drone-based delivery. Last year, Amazon filed a patent for technology that enables drones to be deployed from a “floating warehouse” airship and another that uses lampposts and churches as perches for delivery drones.

And yet innovators also need to deal with the question of where drones will land. This month, Amazon patented a method for dropping packages from a drone with the use of parachutes, according to CNN. The shift in thinking is a response to concerns over the safety of landing drones in people’s yard.

Other big names in technology have also been investing in last-mile delivery technology. Last year Google patented a self-driving delivery truck featuring lockers that customers could access with a PIN. And the founders of Skype rolled out a wheeled, autonomous drone intended for local delivery use.

Even the United States Postal Service has been mulling the role that drones will play in the future of delivery. Towards the end of last year, the USPS Inspector General conducted a national survey that found more people liked the idea of drone delivery than didn’t, albeit with a large portion undecided.

Meanwhile, UPS has been making other moves to hold on to its edge in delivery. In February, the company announced that it would be beginning Saturday delivery in some urban markets.

DISCUSSION QUESTIONS: Can UPS use drone technology to stave off incursions by others into last-mile logistics? What will determine which delivery company or technology provider wins in this space?

Braintrust
"It's too early to tell who will actually make drone delivery practical, but you have to admire the innovation of UPS."
"Can we be practical for just a minute? If UPS gets a drone fleet, FedEx will follow quickly with its own drone air force...."
"One of the issues never mentioned in the drone wars between the various tech and delivery companies is their carrying capacity..."

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21 Comments on "Can UPS fly past Amazon in drone delivery?"

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Max Goldberg
BrainTrust

While it’s too early in the drone competition to declare one company’s technology superior to another, it’s fascinating to watch the innovation. We’re just beginning to see a revolution in last-mile delivery.

Chris Petersen, PhD.
BrainTrust

It’s too early to tell who will actually make drone delivery practical, but you have to admire the innovation of UPS to create a mobile drone base which capitalizes on its core strength.

There is one certainty known about the omnichannel consumer … they are increasingly demanding choice and personalized service on their terms.

The best prediction for the last mile of delivery is that it will take many forms to meet consumer demands for choice and the logistical demands of urban environments. At this point drones, droids, Uber, Lyft and lockers are all in play for the final delivery solution the consumer chooses.

Sterling Hawkins
BrainTrust

It is very early in the game and I suspect we’ll continue to see more innovative solutions coming to market for that last-mile of delivery. I’m with Chris that there will be more than one winner to accommodate different geographies, package sizes, etc. The exciting thing is that not only are many of these technologies viable, but the the economics to deploy them are starting to make sense.

Shep Hyken
BrainTrust

Let the games begin! The question used to be, “UPS or the U.S. Post Office?” Or, “UPS or FedEx?” Now it’s, “UPS or Amazon?”

There’s room for more than one player in the logistics world. There has been for years and that won’t change. There will be a clear cut winner in the “new way” of delivering to that final mile, however that doesn’t mean others can’t survive in the market. Just as the traditional carriers compete for next-day delivery business, there will be a competition for who best delivers the “last mile.” Maybe Amazon will do it better. Maybe UPS. In the end, they will both be standing. What they will have both accomplished are logistic systems that are more cost-effective, more efficient and that create a better customer experience.

Lyle Bunn (Ph.D. Hon)
BrainTrust

It’s less about the drones specifically and more about integrating technologies such as drones, labeling, auto-sort, stacking, location awareness, video and others to upgrade what last-mile delivery is. Armchair generals and battle historians can provide value in bringing the templates of multi-platform, supply-enabled, information-driven campaigns to win ground. The war on delivery costs is bringing new weapons.

Charles Dimov
BrainTrust

It is smart of UPS to keep testing and refining their delivery methods. Whether it is through drones, self-driving delivery bots, or the next thing, UPS needs to make it as easy as possible for them to be seen as part of the omnichannel retail solution. They need to be super connected with the tech vendors and perhaps even promote their brand within the retailers. Think of doing an online order, requesting a delivery … or the option of a “UPS Delivery” (when not picking up in-store, of course).

Ed Dunn
Guest
10 days 12 hours ago

Wheel-based drone delivery will win hands down. A wheel-based drone like Kiva can pick and move itself around a supply warehouse before loading itself onto the right truck to the destination and a dozen drones can leave the truck and deliver packages throughout a neighborhood and return to the truck. This just make logistical sense and exhibits efficiency over air delivery drones.

What we are seeing is bigger than drones — we are looking at companies learning from Amazon promoting the concept that innovation is a viral marketing tool. Media and people love to talk about the next big thing.

Tom Redd
BrainTrust

My realtor just had a drone out to the house for sky shots of our house. Yes it is for sale in Scottsdale, AZ. I looked that drone over and decided that there is no way it is even close to time for retail and drones. It is a great tech topic, but the bird issues, weather, winds and drop points are issues that clog this delivery channel up. Besides the fact that drones make great targets for 12-year-old kids with Red Ryder BB guns …

Way too early. A drone is too slow a machine and too fragile. Stick with the humans.

T

Paula Rosenblum
BrainTrust

I like this idea. I just don’t see drones flying around, taking up airspace all over the place, but from truck to door makes a lot of sense. It saves driver time and it’s low risk.

Lee Peterson
BrainTrust

Ha, that’s pretty good. Funny how after the leader in innovation (Amazon) takes the bloody nose for being “crazy” or for doing something that will never happen, the truth comes out: damn, that’s a great idea! The question would be, where’s FedEx and USPS on the drone issue?

It’s going to be weird seeing those things landing in my yard, I guess I better get used to it.

Ryan Mathews
BrainTrust

Can we be practical for just a minute? If UPS gets a drone fleet, FedEx will follow quickly with its own drone air force. Then if the Amazon idea is really anything more than a way to keep stirring the competitive pot and getting free media attention, we add their delivery squadrons. Then if the USPS gets involved with their drones … well … the sky will be full of drones, accidents will inevitably happen, somebody will be hurt or killed and the Drone Wars will come to a crashing (sorry, couldn’t help it) halt. The answer to the last mile problem is probably not to have a sky full of packages parachuting down on unsuspecting citizens as they try to go about their business. So UPS can try to gain competitive advantage but unless they can monopolize access to drone flight routes it won’t give them a sustainable advantage. If there is going to be a clear “winner” in this space it will be a company that develops a proprietary last mile solution that — in some way — can’t be cloned by the competition. Drones just don’t fit into that category.

Harley Feldman
BrainTrust

UPS is a premier logistics company that will implement the best technology to stay ahead in the delivery business. Drones will be part of this service when the cost point and service level make sense in the scheme of UPS’s overall delivery strategy. But being on the leading edge of logistics technology like UPS attempts to always do, drones will be just one more technology that UPS will use in the last-mile delivery space. The winner in this space will be the company that integrates drone technology with all of its other logistics technologies to provide the best service at the lowest price.

Ed Rosenbaum
BrainTrust

Who knows which company will win in drone technology. Who knows if it will be either Amazon, UPS or another innovative company. But the fun has become sitting back and watching this develop.

Craig Sundstrom
Guest

Methinks a better question would be “Will ANYONE “win” in this space?” I’m still waiting to fly my jetpack to work.

Steve Montgomery
BrainTrust

One of the issues never mentioned in the drone wars between the various tech and delivery companies is their carrying capacity, both in terms of weight and cube. I admit I do not have any idea what the average package size is, but regardless of the winners in this area, they will be limited by these two variables. While people may be willing to have drones delivering a 1 pound package, I am not sure they want drones carrying 5 pound articles over their property.

Michael Spencer
Guest

I expect the drone delivery market to heat up very quickly in the second half of 2017 and 2018, with Amazon, UPS, Alphabet, DHL (in Germany) and specialized startups like Daimler getting into the mix. It’s the same for robotic delivery, I think all of this scales much faster than people realize in convergence with AVs (autonomous vehicles). It’s all about having the patents and existing logistic and fulfillment centers in place. I just don’t see how UPS or traditional logistic providers can compete with the likes of Amazon.

Min-Jee Hwang
BrainTrust

On paper, using drones for delivery is a great idea, but the actual execution is a whole other issue. While companies in other countries have already begun using delivery drones, the US has only seen a drone delivery made by 7-Eleven. Drone innovation seems to be following the path of autonomous cars; multiple companies vying to be the first true iteration of their respective concepts. Only time will tell where drone delivery ultimately ends up. As of right now, it’s way too early to say.

Ricardo Belmar
BrainTrust

It’s amazing to see the longevity of the drone delivery question and hype. Who will win? At this point, my money is on the drone manufacturers. The logistics industry is huge in its own right with many large players. So far we’ve only seen news bites from those willing to play Amazon’s marketing game to draw media attention. How successful this approach to delivering packages will be remains unclear. I don’t see how multiple players can succeed with fleets of drones flying over our heads without a constant stream of accidents hindering success. The short range approach UPS has may be on the best path.

“Begun the Drone Wars have,” I say!

Mark Price
BrainTrust

One of the greatest costs of the delivery business is that last mile, which is seldom repeated and is a repeated one-off expense. Drones have the ability to reduce the cost of that last mile and hopefully facilitate multitasking by the delivery vehicle — delivery to one location personally while delivering to 1+ locations aerially. UPS has the truck fleet and the data on past deliveries to use in optimization analyses, which is a huge advantage in the industry — they stand a good chance of winning.

Sunny Kumar
Guest

There is a lot of talk about how companies are researching and investing in last-mile delivery technology. I wonder, however, if this emphasis on efficiency and the shortening of time lines is perhaps a missed opportunity.

The thing with the last mile is that traditionally this is a people activity. As a service and experience designer, I can’t help but think that instead of working to remove the human interactions, why don’t these big brands try to innovate and develop services that capitalize on the need for a person.

This approach may be more disruptive and innovative than the race for automation we are currently seeing.

Ken Morris
BrainTrust

The last-mile race is on and all the major delivery services are focused on how to cost effectively and efficiently solve the most labor intensive logistics challenge. The big three delivery companies (FedEx, UPS and Amazon) are exploring slightly different automation solutions to this problem: floating warehouses, delivery truck bases for drones and robots. Ten years ago, we would not have thought of Amazon as a delivery company, but today, it is one of their many core competencies.

As these companies pilot different approaches, one will likely be the first to crack the last-mile nut. Once they do, the others will quickly follow by emulating the best approach.

wpDiscuz
Braintrust
"It's too early to tell who will actually make drone delivery practical, but you have to admire the innovation of UPS."
"Can we be practical for just a minute? If UPS gets a drone fleet, FedEx will follow quickly with its own drone air force...."
"One of the issues never mentioned in the drone wars between the various tech and delivery companies is their carrying capacity..."

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