Is Package Delivery Using Drones Feasible?

As reported by RoboHub: Just over one year ago, Amazon announced that it is developing a drone delivery service – Prime Air – in a bid to get packages into customers’ hands within 30 minutes. How feasible is this from a cost perspective? Kiva Systems co-founder indicates drone delivery could cost as low as 20 cents/package.

In the early summer I wrote an article about the economics of Amazon’s drones where I highlighted the cost of logistics to Amazon and some back-of-the-envelope calculations about the likely costs of drone delivery. In the article I indicated that Amazon would require pilots for their drones, especially in the early years of operation, and it seems far-fetched that we will have fully autonomous delivery drones in our cities within the next ten years or so without some sort of human oversight. Backing up my calculations, a recent job advert by Amazon indicates that they are looking for drone pilots, whilst similar jobs attract annual salaries of approximately $100,000 per year.
Earlier this year Helen Greiner CEO of CyPhy Works outlined her vision of delivery drones in 5 years. Meanwhile DHL have started testing the use of delivery drones to transport medicine to the small North Sea island of Juist.

So is it economically feasible to deliver packages by drones?
ETH Zurich professor Raffaello D’Andrea thinks it is economically feasible to deliver small packages by drone . D’Andrea is responsible for the Flying Machine Arena (“a space where flying robots live and learn”) and is co-founder of Kiva Systems, the company acquired by Amazon for US$ 775 million in cash that innovated the robotic fulfillment system that Amazon is now implementing in many of its warehouse facilities.

In a guest editorial for IEEE Automation Science and Engineering, D’Andrea detailed some calculations he had previously used to assess the cost of drone delivery for Matternet (whose vision was to “create a transportation network based on flying machines, and to initially address niche markets such as medicine delivery in underdeveloped and hard to reach areas”), and compared these figures to those that he had previously used for Kiva Systems’ business plan.

To assess the costs, D’Andrea initially uses two assumptions:

• Payload of up to 2 kg.
• Range of 10 km with headwinds of up to 30 km/h.

To arrive at the likely costs of drone delivery, D’Andrea analyzes the power consumption in kW, payload mass of 2 kg; a vehicle mass of 4 kg (battery weight of 2kg); the lift-to-drag ratio; 
power transfer efficiency for motor and propeller; power consumption of electronics, in kW, electricity costs and cruising velocity, in km/h, air speed and headwinds.

After analyzing the weight of the drone, payload (parcel) drag, headwinds, etc. D’Andrea states:

“So, is package delivery using flying machines feasible? From a cost perspective, the numbers do not look unreasonable: the operating costs directly associated with the vehicle are on the order of 10 cents for a 2 kg payload and a 10 km range. I compare this to the 60 cents per item that we used over a decade ago in our Kiva business plan for the total cost of delivery, and it does not seem outlandish.”

Via email correspondence, D’Andrea points out that the ten cent cost described in the IEEE guest editorial was for energy (including battery replacement), and not for the amortized cost of the vehicles and vehicle maintenance. Assuming a vehicle cost of $1000 per unit (this is reasonable if Amazon is buying in the thousands), adding 20% per year for maintenance, and amortizing this over 5 years, this would amount to an additional $400/per year, or roughly $1/day. If each vehicle ran 10 missions per day, that’s an additional 10 cents per package on top of the 10 cents in energy costs calculated previously, for a total cost of about 20 cents per package.

20 cents per delivery is far less than what Amazon is currently paying. According to shipping-industry analysts, Amazon typically pays between about $2 and $8 to ship each package, and the possible cost of drone delivery as laid out by D’Andrea would go a long way to reducing Amazon’s annual shipping-related losses of US$3.538 billion (shipping costs incurred in 2013) and the US$ 8.829 billion in cumulative shipping losses between the 2011 and 2013 fiscal years.

In addition to regulatory hurdles and privacy concerns, D’Andrea also outlines several technical obstacles to drone delivery, indicating that additional automation research is needed to address three main challenges:

• vehicle design,
• localization and navigation,
• vehicle coordination.

Elaborating on these issues, he writes:

"Vehicle design encompasses creating machines that are efficient, (most probably) can hover, can operate in a wide range of conditions, and whose reliability rivals that of commercial airliners; this is a significant undertaking that will require many iterations, and the ingenuity and contributions from folks in diverse areas.

Localization and navigation may seem like solved problems because of the many GPS-enabled platforms that already exist, but delivering packages reliably, in different operating conditions, in unstructured and changing environments, will require the integration of low-cost sensors and positioning systems that either do not yet exist, or are still in development.

Finally, thousands of autonomous agents in the air, sharing resources such as charging stations, will require robust co-ordination which can be studied in simulation."

D’Andrea expects that delivery by drones is a real probability and concludes his opinion piece by writing that, for better or for worse, “goods being delivered by flying machines will result in packages flying above our heads in the not so distant future.”