The Future of Drones in Logistics and Supply Chain Management

Supply chain management is a critical aspect of a business as it directly and indirectly impacts a company’s business operations, with a variety of problems attached to the process. The use of technology continues to expand, and with it comes benefits and ramifications. While the pros of technology include cost reduction, efficiency, inventory control and data safety, it also brings added complexity in the areas of cyber security and scalability and added costs in training and investment.

One form of technology that’s being increasingly used by the freight and logistics industry is Unmanned Aerial Vehicles (UAVs) or drones. Initially used mostly for military activities, drones are quickly expanding into other sectors. 

Drones can be used at various points in the supply chain, assisting with both the land and air portions of delivery. Increasingly they're being used for warehouse operations (inventory management and searching for lost goods), shuttling goods between distribution centers and last-mile delivery, often a very expensive part of a trip. 

New truck-drone collaborations use information sharing to execute deliveries by air to multiple destinations, straight off the delivery truck, a system referred to as multi-UAV parallel delivery. Cargo UAVs that are able to carry hundreds of pounds over many miles could be an integral part of future supply chains, and soon Amazon will ramp up its drone delivery program. 

Shifts toward artificial intelligence will bring many new changes to how businesses, governments and organizations operate, in some cases leaving out the human aspect of the process. Modern technology already supports the military, humanitarian aid, food supply and healthcare industries. 

New collaborative transportation management processes will provide innovative solutions in logistics, though globalization and the use of multiple modes of transport add challenges and require cooperation.  

Benefits of UAVs in the Supply Chain

1. Deregulation—free market enterprises
2. Cost efficiency
3. Information sharing
4. Increased collaboration 
5. Integration of last-mile delivery (multiple modes)
6. Maritime and military logistics 
7. Innovative management, operations, processes, communications, data collection
8. Changing customer/consumer choices—improved services
9. End-to-end visibility, accurate delivery
10. Reduction in delivery times
11. Road conditions do not impact delivery
12. Environmentally friendly

Drawbacks of UAVs in the Supply Chain

1. Information sharing (has its pros and cons)
2. Loss of Freedom (drone eyes, tracking)
3. Cybersecurity
4. Training costs
5. Start-up costs
6. Privacy concerns
7. Trust, partnerships, exchange of data and information 

While the above list is only a few of the many pros and cons based on industry initiatives, it’s a start in the thinking process for an organization looking to the future. It is anticipated that by 2030 10 million drones will be flying in our skies, requiring a drone superhighway system and demanding regulatory changes in the aerospace industry.  

Passenger drone growth is expected to continue to rise since it was first introduced by China in 2016. The labor market also continues to change, with an expected worker shortage in the millions by 2030, so new technologies will demand more and more attention. Changes in how we do business will impact our governments, military and commercial operations, but not without both positive and negative impacts on society. 

Like what you read? Subscribe today to the International Trade Blog to get the latest news and tips for exporters and importers delivered to your inbox.