Drone Delivery – Future of Supply Chain

Over the last few years, drone delivery has grown from an unproven idea into a fully functional business model, albeit with limited applications. UPS was granted FAA approval to carry out commercial drone deliveries last year, and its Flight Forward arm has since begun working with hospitals on implementing drone applications.

Amazon applied for its FAA exemption last year, and the company's Worldwide Consumer CEO Jeff Wilke told the re:MARS conference Amazon would be able to start drone delivery "within months." But Amazon has been part of the drone delivery conversation since the early days, with CEO Jeff Bezos outlining the idea seven years ago on 60 Minutes.

"The reason why Amazon and others are pushing for drone-based delivery services is twofold," said Matthias Winkenbach, director of Massachusetts Institute of Technology's Megacity Logistics Lab. "One, it provides speed, and two, it can provide efficiency."

Neither Walmart nor the state of North Carolina is stranger to drone delivery. UPS has participated in the Federal Aviation Administration's drone Integration Pilot Program in North Carolina over the last couple of years. And Walmart began testing drones, beginning with indoor flights, as early as 2015. Flytrex also participated in the FAA's IPP in North Carolina.

But as flights take off in North Carolina, Walmart acknowledges the last-mile delivery method is still in the early days.

"We know that it will be some time before we see millions of packages delivered via drone," Tom Ward, senior vice president for customer products at Walmart, said in a statement. "That still feels like a bit of science fiction."

Walmart is preparing for this new world. It has patented dozens of drone delivery solutions and began detailing its plans in a request for exemption filed by its logistics division to the FAA in 2015.

"The flights would confirm the ability of a [unmanned aerial] vehicle to deliver merchandise packages from the retail facility out to a point in the parking lot where the packages could be accessed by a customer," Walmart said in the document to the FAA.. In five years, Walmart has taken tests from the parking lot to consumers' homes.

A video of a delivery provided in Walmart's blog post this week shows a compartment in the drone loaded with a bag before the flight and lowered onto the lawn of a customer on a cable and released when it reaches its final destination. The drone in the video stays above the tree line throughout the delivery.