Despite Promise, Drone-Delivery Industry Takes Flight Slowly

May 01, 2019 by John O'Dell

Amazon started talking about delivery drones five years ago. Electric-truck developer Workhorse Group publicly tested a delivery drone in Las Vegas 18 months ago and predicted commercialization within months.

Today, though, the skies are pretty much empty of package-carrying drones, despite the large number of commercial drones – more than 100,000, according to federal estimates –in operation.

But beyond headline-grabbing tests like burrito deliveries in Australia and medical supply-delivery programs in Africa and Switzerland, delivery by drone still is more ideal than done deal.


The biggest business segments for drones in the U.S. are for mapping, surveying, aerial inspection of utility lines and pipelines, snapping aerials for real estate marketing efforts, and agricultural applications such as crop spraying and field inspections.

The lack of regulations that ensure public safety and protect privacy while simultaneously loosening the reins on commercial operators so they can make money has kept the industry grounded.


Some blame the Federal Aviation Administration, which makes the rules governing drone flight. The FAA has been too cautious in developing drone safety standards, the National Academies of Sciences, Engineering and Medicine said in a report issued in June 2018.

That may be loosening. In April, the FAA granted an air carrier certification to Alphabet’s drone operation, Wing. The first such certification for a drone operator, it allows Wing’s drones to fly beyond line of sight and over specified occupied areas in a Virginia delivery program.

The “Part 135” business-aircraft certification also enables Wing to apply for flight authorizations in other parts of the U.S. It could ease the way for other drone operators because Wing and the FAA developed drone-specific modifications to the general air-carrier regulations.

Still, nationwide rules to permit drones to fly beyond the operator’s line of sight – critical to making commercial deliveries financially feasible – are as much as nine years away, said drone-industry analyst Colin Snow, chief executive of Skylogic Research.

Beyond that, there still isn’t an obvious economic case for drone-delivery service, Snow told

The drone industry isn’t as pessimistic.


Progress, while slow, is happening, said Brian Wynne, president and chief executive of the Association for Unmanned Vehicle Systems International, AUVSI.

“We are in the proof-of-concept stage, and the endgame is full integration into our airspace, and there are still a number of steps needed to get there,” Wynne told

The good news, he said, is that “the FAA is not doing things the way they have done for ages. They are leveraging industry expertise, and cooperating with industry is going to accelerate rulemaking. The building blocks are being put into place.”

Present FAA rules permit drones to operate only at altitudes below 400 feet, require that they be flown within the operator’s line of sight, and tightly restrict operations over populated area.

Wing delivery drone

A Wing drone makes a delivery in Queensland, Australia, during the company’s program there. (Photo: Wing)

Except for Wing’s recent certification, that pretty much limits drone-delivery efforts in the U.S. to rural areas and flights to no more than a few miles from the operator’s base – unless, as in a recent UPS test, the operator is in a mobile van that launches the drone when it is within sight of the delivery address.

In that case, Snow said, the economic benefit of replacing delivery vans with drones is pretty much erased.

Workhorse, which supplied the delivery vans and drones for the UPS test, has since fallen on hard times and postponed further drone work.

UPS’ plans to pursue parcel delivery by drone in the U.S. are on hiatus, according to Carleton Rose, the shipping giant’s president for global fleet management and engineering.


The company hasn’t given up on drones, though – just shifted interest. It now is pursuing use of drones for quick delivery of medical supplies and test samples.

Other types of drone-delivery programs – including parcel – aren’t off the table.

“We believe unmanned aerial systems could better serve customer needs and provide opportunities for network improvements that generate efficiencies and enable us to grow our business,” Bala Ganesh, head of UPS’ Advanced Technology Group, told

A number of major entities – including Amazon and Alphabet – continue to work on and invest in drone projects.

UPS has helped back several drone-development companies. Others with money in delivery drones include Boeing Corp.’s HorizonX Ventures fund, Sony Corp., Daimler, the Swiss postal system, Microsoft co-founder Paul Allen, Yahoo founder Jerry Yang and a variety of private venture funds.

The investment is driven by the potential for retailers and delivery companies to slash so-called last-mile delivery costs, which make up the most expensive segment of the delivery chain.

“We continue to believe that unmanned aerial vehicles will become an increasingly important and normal part of the overall logistics solution, especially for last-mile applications,” investment firm Morgan Stanley said in a recent assessment of the industry.


The biggest move toward establishing a nationwide drone-delivery industry began last year with the Unmanned Aircraft Systems Integration Pilot Program, UAS IPP. It is a large-scale, three-year effort to develop the real-world drone use data and safety record needed to permit commercial drone operations – including parcel delivery – on a national basis.

The FAA issued long-term waivers in 10 jurisdictions for “beyond-line-of-sight” and “over-people” drone programs. Four of the announced UAS IPP projects – in North Carolina, Virginia, Nevada and Southern California – involve package-delivery operations. But as Wing did for the Virginia program, the other delivery-drone operators will have to pursue Part 135 certificates of their own or partner with companies that already have the certification or that, like UPS, “have the expertise to complete the requirements” for the certificate, an FAA spokesman said.

The waivers are designed to generate data and working relationships among the players “that can be used to extrapolate rules for integration into airspace,” Wynne said.

Matternet drone

A Matternet drone seen from above (Photo: Matternet)

The first program is a venture by UPS and Matternet, a Menlo Park, Calif., drone company. It began drone delivery of medical samples in March among the facilities of the WakeMed health care system in Raleigh, N.C.

The deliveries are the first FAA-approved, regular revenue-producing drone-delivery flights in the U.S., according to UPS.

Other delivery programs in the UAS IPP program will involve medical supply, equipment and sample deliveries in the Reno area; around Herndon, Va.; and in San Diego. Food deliveries in San Diego and North Carolina also are being planned.


Even with projects like these speeding the development of the data and regulations needed to launch nationwide drone delivery, the industry still has a way to go.

“It’s a tough challenge, especially in urban areas where there are a lot of variables to take into account,” said Stelios Kotakis, drone-industry analyst for IHS Markit.

“There needs to be regulation of flying times, package weights and contents, we need monitoring systems for beyond line-of-sight flights, and object identification and avoidance systems for the drones, links to mobile networks, and more, but it is getting closer,” Kotakis told

John O'Dell April 26, 2019
The drone-delivery industry gets a big boost as the FAA grants Google’s drone unit, Wing, certification to operate under rules permitting long-distance flights over an area of Virginia.

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