Last Friday, in my weekly news roundup, I mentioned that A.P. Moller Maersk A/S, the world’s largest containership operator by capacity, is studying deploying drones aboard its giant vessels and at its port operations around the world. The driving factor here is to cut the cost of supplying ships at sea. This piece of news got me thinking a lot about some of the other drone news we have covered at Logistics Viewpoints, and I starting thinking about the current state of drones in the United States and what the future might hold. From the way I look at drones, there are four primary commercial use cases that we have identified, and each has a very different path forward, depending on drone regulations.
The most popular and widely followed drone stories have been about Amazon and Google. Amazon in particular has been very vocal about using drones for last mile deliveries. However, when the FAA revealed its initial proposal over the regulation of drones, it left Amazon and Google with some major hurdles to overcome. Specifically, the initial proposal mandated that the aircraft must remain in the line of sight of the pilot, must be under 55 pounds, and may not fly over people. For last mile deliveries, specifically in heavily populated areas, these regulation basically put programs on hold. So Amazon outsourced all of its drone research out of the US. But the tide may be turning now, as the U.S. Senate Committee has approved a reauthorization of a bill that permits drone usage. The Committee on Commerce, Science, and Transportation has told the Federal Aviation Administration (FAA) that it must create rules for delivery drones within two years, according to an amendment to the bill.
So this offers a glimmer of hope that the final regulations will not be nearly as strict and last mile delivery of consumer goods may actually become a reality. With advanced technology, like geo-fencing and collision avoidance, drones are becoming safer which certainly helps make them more of an appealing option for the FAA. However, we are still a few years away from this reality.
The other three areas of commercial drone usage are more practical, in that they are either in trials or fully functional right now, and are in compliance with FAA regulations. The first is a solution by PINC called PINC Air. PINC Air is an aerial sensor platform that operates both outdoors and indoors to inventory hard-to-reach assets using an array of sensors that include GPS, RFID, OCR and barcode readers. PINC Air is basically a supply chain drone that has multiple use cases. Each of these use cases allows a company to perform tasks via the drone, rather than in the more timely and costly manner using people. The use cases include:
- Yard management drones that track assets in a trailer yard, ensuring all equipment is accounted for;
- Inventory drones that check for finished vehicles in the automotive industry;
- Asset location drones that can locate high value assets across a wide geographical area;
- Cycle counting drones that can perform cycle counts within a vast warehouse.
The third area of drone usage is the test case of A.P. Moller Maersk A/S. The shipping giant says that although the study is still in its early stages, it could save up to $9,000 per ship in annual operating costs by supplying its ships at sea entirely by drone. Considering Maersk Line, the company’s overseas cargo carrier unit, has over 600 vessels, that is over $5.5 million in operating cost savings. Restocking ships when they are in the port is incredibly time consuming and costly. These deliveries are generally consolidated and delivered by barge. With the drone, the deliveries of smaller goods could happen more frequently, and save money on fuel. This again is still in its testing stage, but as the testing expands, this could be a way for the maritime industry to adopt drones.
The final area where commercial drone usage is already in place does apply to the logistics industry, but it is certainly big money. High end real estate is probably the largest market for drone usage right now. Photographers and cinematographers around the world are taking to the air to provide aerial footage of high end real estate. In fact, according to Dan Gettinger of Bard College’s Center for the Study of the Drone, in California alone, real estate photography makes up 35 percent of all commercial drone use in the state. And according to Bill McGonagle of Cape Cod Aerials, an aerial photography business in one of the wealthiest parts of Massachusetts, 75% of their business is for high end real estate.
Of the four primary use cases of commercial drones, aerial photography for high end real estate is the most widespread. The use of drones for last mile delivery seems to gathering the most attention, especially as the push for regulations intensifies. From a logistics standpoint, however, the use cases for PINC Air appear to be the most market ready, as retailers, wholesalers, and distributors alike are beginning to see the benefits of a supply chain drone. Looking ahead, A.P. Moller Maersk A/S’s maritime application could certainly become an important component for re-stocking ocean-going vessels. The drone market is certainly one that will continue to bring about innovation and interest.