Millions more people may be able to get smaller, lightweight Amazon packages delivered by drones by the end of the year under a plan the company announced Thursday to expand the airborne shipping to suburban areas in nearly 500 U.S. cities.
Customers could receive the drone deliveries in as fast as 30 minutes, Amazon said in a news release. The drones can carry packages up to 5 pounds.
The plan will intensify the battle between Amazon and Walmart to provide consumers with the fastest delivery times. Both giants rely on a mix of drones and drivers to deliver everything consumers have ordered.
Amazon’s plan would expand its drone delivery operation more than sixfold nationwide into hundreds of new communities, including the Chicago, Atlanta, Cleveland and Boise metro areas. The drones will primarily fly in the suburbs well away from skyscrapers and major airports that could cause problems.
Drone delivery is growing fast but remains a small factor
Hundreds of thousands of packages have already been delivered by Amazon drones this year, but even after this expansion drones will still only handle a fraction of the hundreds of millions of package deliveries each year. In addition to only being able to carry 5 pounds, the drones Amazon builds face countless challenges from tree cover to landscaping and inflatable pools that can make it hard to find a good drop zone.
There are also regulatory hurdles to overcome in every community where Amazon wants to set up operations. Noise concerns also pose a potential challenge.
“It’s still an experiment. It’s still in test and learn mode,” said Sucharita Kodali, who is a retail analyst with Forrester.
The novelty of drone delivery may attract orders at first
Initially, consumers might order something delivered by drone because they are curious about it, but it’s not clear how often they will continue to use the service, and Amazon is still working out the economics, Kodali said.
The service will be free for Amazon Prime members who are ordering more than $50 worth of goods, but smaller orders will cost members $2.99. Non-members will pay $4.99 for drone delivery.
Prime members get free deliveries while non-members pay a flat fee if the shipment is under $35 for standard delivery or up to $12.99 for same‑day shipments when available.
Kodali said drones could prove more useful for certain light-weight deliveries that are needed urgently like prescription medications.
DoorDash and other delivery companies also are experimenting with using drones to deliver foods and other goods.
Amazon CEO believes drone delivery will be part of the mix
Amazon’s CEO Andy Jassy told shareholders in his annual letter in April that the company has learned a great deal by flying drones in 11 sites across Arizona, Florida, Kansas, Louisiana, Michigan, Nebraska, and Texas. In each location, the drones launch from an Amazon warehouse and cover about 175 square miles, so it takes multiple drone launching locations to serve a large metro area.
“Prime Air now has a design that’ll scale, plans to serve communities with 30 million customers by year-end, and expects to deliver half a billion packages by the end of this decade (with an aim to deliver inside 30 minutes),” Jassy wrote.
Amazon is also continuing to invest in its warehouses, smaller fulfillment centers closer to customers and its fleet of trucks as the company competes to deliver packages within minutes or hours instead of just days.
Amazon is already certified by the Federal Aviation Administration and the company has been awarded waivers to fly drones beyond the line of sight of the pilots. Amazon has invested in safety measures to help drones avoid collisions with anything else in the sky while they are making deliveries.
The federal government has proposed a rule that would allow more drone operators to fly beyond the horizon, but that hasn’t been finalized yet.
—Josh Funk, AP Business Writer