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In the part one of this two-part feature we looked at the launch of Amazon Prime Air and whether Amazon’s announcement heralded a revolutionary new delivery method which could change field service as we know it, or if it was little more than a PR stunt to put the ecommerce giant in the public eye ahead of a key revenue-generating period and whether (or not) the public was ready for fleets of drones delivering their goods?

Now in the second part of the series we review how the business world has reacted to the launch, the regulatory challenges that stand in Amazon’s way and one reason why it might just work after all….

The business world poured scorn…

Whilst public opinion remained divided, in the corporate world Amazon’s competitors both current and potentially those from the future if they step into the realms of delivery and logistics.

When asked if Amazon could emerge as a competitor, FedEx CEO Fred Smith commented:

“Quite frankly I don’t think I’ve seen more mythology in the press about anything than I have about the e-commerce space over the last year or so…”

He further clarified FedEx’s position by adding:

“Now that’s not to belittle UAS [unmanned aerial systems] technology because we’ve got a lot of studies underway in that area ourselves,” he said. “…but at the end of the day [most products will be delivered through] the intercity transportation networks of FedEx and UPS and to a lesser degree the Postal Service, which is designed around delivering very lightweight items.”

John Donahoe, CEO of Ebay was equally dismissive of Amazon’s plans. Not pulling his punches he commented that Ebay were “Not really focusing on long-term fantasies, we're focusing on things that will change consumers' experience today," 

Meanwhile in a fantastic parody of the Amazon announcement British book retailer Waterstones, announced they were launching a new service using specially trained Owls to deliver online purchases within 30 minutes.

A question of regulations...

In fact whilst it does seem that open season has been declared on Amazon and mischievous sniggering can be heard in corporate boardrooms around the globe, the simple fact is that the technology to make this happen is very much a reality and should Amazon be able to overcome the regulatory obstacles then they may well find themselves not only laughing last but also lughing loudest.

So what exactly is the current state of affairs in terms of the regulation Unmanned Ariel Systems (UAS) to give the drones their official moniker?

Well last year the US Congress passed a law that required the FAA to publish their final regulations that would allow certain applications of commercial UAS by September 30^th 2015 – which is the likely the source of Amazon’s own claim that Prime Air could be launched as soon as then.

Having recently published its first annual “road map” in which it laid out the necessary steps it will be taking to move forward with plans for draft legislation within the next year, the agency has already approved certain UAS for use by energy firms off the Alaska coast, as instructed by Congress.

However, both types of UAS that the FAA certified had already been approved for military use, something the Amazon drones don’t have behind them. Whilst law enforcement agencies and other public organisations have also received permission from the FAA to fly UAS in US airspace for surveillance and other purposes, corporate uses are a long way from being cleared. One un-named source at the FAA is even quoted as saying:

“We can’t even handle the simpler cases… this is taking ridiculously long. We’re hurting a lot of industries.”

In fact as the Washington Post highlighted:

"The fact that Amazon had to leave the country to make the video underscores how slowly U.S. officials have embraced the policy challenge."

In the UK the Civil Aviation Authority (CAA) are responsible for the authorization of UAS. In response to the Amazon announcement a CAA spokesman commented

“There are rules in place to make sure unmanned aircraft are operated safely and don’t pose any risk of harm to the public. A key element of this is the operator must have the aircraft within visual sight at all times during the flight. So there are a number of safety issues Amazon would need to address before this type of operation could go ahead.”

Yet it could still work…

However, there is one potential application of delivery drones which has been overlooked by the Amazon spin machine but could actually prove to be a much more viable solution in terms of both the logistics of operation and also meeting existing regulations, which was outlined by Ralph Rio, A Research Director with the ARC group in an article on Forbes Magazine.

“Instead of replacing, think about augmenting.  Jeff [Bezo] said that 80% of the packages are light enough for a drone to carry.  That means 20% of packages will need a delivery truck and person to carry the package to the destination…”

“…Consider a truck with sides that roll-up to reveal shelves with drones.  The truck stops at a home and, while the delivery person gets and delivers a package, multiple drones emerge and deliver packages within a few hundred feet, and return.  If a drone has a problem, the delivery person is there to help.  Also, the drones could be limited to a lower altitude that avoids FAA issues. “

“With the delivery augmentation approach, each stop releases a swarm of drones.  One stop delivers five packages rather than one.  This would be a huge productivity improvement for a dense, same day delivery route – like in suburbia.”

“ Of course, this approach to package delivery requires creation of complex algorithms for issues like when to use, route optimisation, sequencing, error correction, failure response, and more.  Amazon has the PhD math scientists to solve these problems.  The major impediment may be the business agreement between Amazon and the package delivery service providers.  But, this may solved with the next iteration of its agreement with the post office.”

“The technology is known, and could be deployed.  We will be watching for you to see how the application of this technology unfolds.”

This would certainly seem to provide a more practical application of the drones for deliveries, rather than Amazon’s initial more simplistic version drones leaving direct from the factory. Of course drones have been applied in other field service environments such as this example here as well. So whether the announcement was a perfect PR exercise or not, perhaps the idea of seeing delivery drones is the next few years is not as far fetched as it might seem…

At the beginning of this month Amazon caused a global sensation when they announced their intentions to launch a new service Amazon Prime Air.

Prime Air is a revolutionary new delivery mechanism that would see the e-commerce giant utilise small unmanned drones to deliver packages weighing under 2.3kg to consumers within 30 minutes of ordering. It is the stuff of science fiction fantasy but if the plans are real then Amazon’s plans then it could be a move that will change field service forever.

But is there any substance to Amazon’s claims or is this just a very sophisticated marketing move? Serious questions remain about the legality of such a venture with legislation unclear both in the US and the UK , whilst the timing of the announcement, with the usually secretive Amazon CEO Jeff Bezos appearing on CBS’ 60 Minutes programme the day before ‘Cyber Monday’, raised further questions also.

Yet at the same time, if Amazon can find their way around the legislative maze that stands in their way, and if they have indeed perfected the technology then the business case for such a bold move is certainly sound.

Online purchases have been reported as having increased 20% year over year over the Christmas periods.  If this figure is compounded, that equate to business doubling within just four years.  The likelihood of Amazon being able to double their delivery capacity using existing methods by 2017 is questionable at best. Add to this the increasing consumer demand for free delivery driven by a highly competitive market, then finding an improved means of delivering small packages becomes a high priority to keep their business sustainable.

What Amazon’s official statements say…

With a powerful video that outlines Amazon’s vision for future deliveries sat prominently on their official site it certainly seems that Amazon themselves see Prime Air as more than just a pipe dream but an actual viable solution they will be rolling out to customers within the medium term.

In a dedicated FAQ about the Octocopters (Amazon’s official name for their drones) they describe the technology as:

"It looks like science fiction, but it's real. From a technology point of view, we'll be ready to enter commercial operations as soon as the necessary regulations are in place. The Federal Aviation Administration (FAA) is actively working on rules for unmanned aerial vehicles”

In the same section they also claim that the “One day, Prime Air vehicles will be as normal as seeing mail trucks on the road today” and that the drones could be in action as early as 2015. They also appear to address one of the most likely objections to drone fleets taking to the skies… public safety.

Amazon’s official statement reads  “The FAA is actively working on rules and an approach for unmanned aerial vehicles that will prioritise public safety. Safety will be our top priority, and our vehicles will be built with multiple redundancies and designed to commercial aviation standards.”

But safety isn’t the public’s only objection to the drones…

A divided public reaction…

In the days following the announcement the Internet was buzzing with articles and comments about the drones. If the old cliché that there is no such thing as bad coverage is true, then this certainly was a PR masterpiece by Amazon as their brand was suddenly everywhere.

Many responses were positive, openly welcoming the announcement. Comments from a BBC online article discussing the drones included:

“The sooner the better. I'm sick of being imprisoned in my home waiting for deliveries to my online shopping mad daughters. Perhaps with this delivery system I will be able to go out and do some real shopping. You know, the type where you choose what you want and get it there and then.”

And

“Yes, I believe that this would be an effective means of parcel delivery... Eventually. Drones of this type can be easily flown and built, from as little as £100. A model aircraft can be classed as a drone. The law does not currently stop people from strapping a small GoPro camera to the front of a model aircraft, yet. Drones have many practical uses, but must be used in the correct way.”

However, whilst some greeted the prospect of drone fleets warmly many used the forum to express their misgivings about the concept.

“What about people living in apartments with no direct access to street level. I'm reckoning this will be limited to people who live in suburban detached or terraced houses - can't see this making its way to inner city areas with the technology advancing well enough to avoid substantial damage to property or life.”

And

“Amazon's aim is to get goods to customers faster and cheaper; and make more profit. Machines can put many people out of work, but we still have no plan in place to deal with it's effect, i.e.: unemployment.”

Certainly it seems that public opinion remains divided but what about the corporate world? Read the second part of this feature where we assess how Amazon’s competition has reacted, the regulatory challenges that need to be overcome if Amazon Air Prime is ever going to be realised, and one potential solution that could see drone fleets arriving sooner than you might think…