Re: I laugh when I hear people say "Amazon Air will never wo
Buckaye said:
The reason amazonn with the help of UPS, Fedex and the USPSn - can send us stuff cheaply is due in great part to the scale of the organization and the economy that is created by using the same transportation to ship as much as physically possible... quite simply - the more that goes out on a UPS truck for deliveries... the better the per delivery cost is.
Economy of scale will affect commercial drone delivery just like it affects every other growing industry. Drones will become cheaper as production ramps up. The components involved to make a drone are not revolutionary or exotic. The only major barrier is getting enough drone manufacturers into the market place to drive competition and lower costs. We've seen this happen many times before. I saw the first plasma screen in my area in 1999 and it was a Sony 42-inch plasma that retailed for $14,000. Guess how much a similar flat screen costs now? Probably $200 + tax.
However, like I've already stated numerous times, drones will not compete with a FedEx truck when it comes to large and bulky items. Any basic knowledge of physics will tell you that. But the whole world of commerce doesn't revolve around retail products that weigh over 50 pounds. Billions of items are delivered every week that are less than 5 lbs. in weight.
The drone totally adds the capability of "get it now" - and that's cool and exciting and is something truck delivery can't do... but the other thing the drone does is limits the economy of scale... depreciation, maintenance costs, insurance etc etc are suddenly being calculated by a very different denominator.
The idea of "get it now" is a very compelling human need. How many retail stores or fast food chains operated on a 24-hour basis in the 1980's? I dont know of any, perhaps McDonald's but that is the only one I can think of. Now look around --- McDonald's, Taco Bell, Wal-Marts, Walgreen's, and Rite Aid open 24 hours a day for that "get it now" impulse buying that many people thought wasn't necessary 25 years ago. Last time I checked, FedEx and UPS arent delivering products to customer's homes at 2am at night, correct? Where's the economy of scale helping in that endeavor? It's because humans need sleep, and drones don't! LOL, those little buggers work non-stop and never complain!
Besides, I could name hundreds of examples of why "get it now" will drive demand through the roof for drone delivery. The OP made a good example about getting much-needed prescriptions after hours. Those of us who have sick kids realize how valuable this drone delivery would be when we got a little one with a fever and diarrhea and don't feel like driving through a snowstorm to get to Walgreen's for Pedialyte and Children's Tylenol at midnight. How about when a new iPhone is released? Do you not think thousands of people would love to log into Amazon and order up drone delivery of their new Apple gadget within 30 minutes? I'm not an Apple fan but I seen the frenzy these people get when a new product is released and they would easily pay a $25 same-day delivery charge for a drone to bring it FAST.
I'm just trying to open people's eyes about this idea of drone delivery. I've said many times it won't put FedEx and UPS out of business, and if they're innovative then I bet UPS and FedEx are already developing commercial drones as we speak. But I am saying with full conviction and knowledge of business operations and financial viability that drones WILL happen in the next few years, although not necessarily in the USA. There is just too many compelling uses for these little flying machines, and the cost model is very attractive in many situations compared to massive infrastructure of FedEx and UPS. We need to start thinking outside the box here, instead of assuming that gas-guzzling trucks will be the only delivery option for retail products for the next 100 years.
What's going to happen to FedEx and UPS surcharges when gasoline hits $4.00 + in a year or two? DISASTER for the consumer, that's what. Coal-fired electricity will be cheap for many decades to come. America has trillions of tons of coal to mine.