Where are we now with drone delivery?

It was December 2013 when Jeff Bezos announced that Amazon was working on drone package delivery, bringing the concept into the mainstream. In this blog post, let’s take a look at how far drone deliveries have come over the past decade.

The wonders of drone delivery and its promises have been stated for years now, but we have yet to see it become widely adopted as a last-mile delivery method. While regulation, technology, and profitability are the main hurdles that still need to be overcome, we are beginning to see drone delivery expand beyond small-scale pilot projects and being offered by large, famous corporations.

In this post, we’ll explore the question – Where are we now with drone delivery?

Walmart is the US retailer leader

Walmart has been the leading retailer when it comes to drone delivery. Through partnerships with drone delivery companies such as Zipline, Wing, Flytrex, and DroneUp, Walmart has completed over 20,000 drone deliveries in the past 2 years. For the Dallas-Fort Worth area in Texas, Walmart has stated that it can offer drone delivery to up to 75% of the area’s population which includes over 30 towns and municipalities. With a drone delivery fee of $3.99 and a parcel weight limit of 10 pounds, Walmart promises deliveries in 30 minutes or less (in some cases as short as 10 minutes). It is worth noting that McKinsey currently estimates that the direct operating cost of a single drone delivery is $13.50 which is significantly higher than the drone delivery fee that Walmart charges. While Walmart is most likely offering the service at a loss, this further cements their determination that this bet will pay off in the future.

Amazon’s decade-long bet

Jeff Bezos first announced his vision for the Amazon Prime Air drone delivery service back in 2013, but even a decade later in May 2023, Amazon had only completed 100 Prime Air deliveries. Later that year in October however, Amazon spokesperson Jessica Bardoulas stated that Amazon has made “thousands of deliveries” since launching the service which may be a sign that the company is finally ready to scale the service. While Amazon’s drone delivery feats are yet to match Walmart’s, the ecommerce and logistics giant has been trialing its Prime Air drone delivery service in two locations in the US which are College Station, Texas and Lockeford, California. Currently, the service is limited to select items that are 5 pounds or less, but is free and promises delivery in under one hour. With drone delivery eligibility for a third US location as well as locations in the UK and Italy underway, Amazon shows continued commitment to drone delivery.

The journey of drone delivery toward mainstream acceptance is marked by promising yet gradual advancements. McKinsey estimates that in 2023, there were over 150,000 drone deliveries made in North America and over 1 million deliveries world-wide. Its use-case has also expanded beyond package delivery, with DoorDash (in partnership with Wing) beginning to offer drone delivery for food and beverages in Christiansburg, Pennsylvania. These efforts by leading companies highlight the ongoing exploration and adaptation in the drone delivery landscape, revealing a path forward through innovation and regulatory navigation. With real customers beginning to get access to drone delivery across a wide range of services, drone delivery is becoming more real than ever before.

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