LANGHAM: Will drones disrupt logistics?

innovation-sig-langham-cathy.jpgTo succeed and survive in the logistics industry, we have to continually evolve and find ways to become innovative while staying dependable, efficient and fast.

Drones have potential to disrupt the logistics industry as well as many others. With e-commerce growing at an exponential rate, and with economic factors such as truck driver shortages, it makes sense to look at how drones can be used as an asset in logistics and distribution.

Some benefits to consider include the ability to reach remote areas that might not have regular delivery service, no traffic congestion, and no hours of service regulations. But there are many unknowns.

Cost is a huge factor in determining whether companies will be able to acquire drones as part of their service offerings. In a Forbes article a couple of years ago, contributor Roger Kay noted that drones could carry a price tag of around $50,000, making the operating costs in the hundreds per hour. Today, some are relatively inexpensive.

Federal Aviation Administration rules allow drones to weigh up to 55 pounds, and travel at up to 100 mph and as high as 400 feet above the ground. The big challenge, though, is that the drone must always remain within the pilot’s line of sight.

Some 400 million annual shipments from Amazon to U.S. customers would be eligible for drone delivery; no doubt, many of these shipments will be moved by drones in the next 15 years.

Many facets to the technology also need to be further researched in order for drones to alter logistics. Areas of compliance and regulation, security, insurance, mechanical breakdowns, safety and liability are just a few examples of what really needs to be considered before a company can maximize the potential of the technology.

Drones have introduced a new level of excitement and opportunity everywhere they have been used. Obviously, we have just scratched the surface, and drone technology continues to evolve with new designs.

We as logistics companies must be comfortable that we have a precise financial model for their operations, just like we do for any other transportation assets like tractors, trailers and airplanes. Stay tuned.•


Langham is co-founder, president and CEO of Langham Logistics Inc.

Check out the rest of IBJ's 2015 Innovation Issue.

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