Brandon Donnelly

Daily insights for city builders, delivered every morning at 6 AM ET. I’m Brandon Donnelly — a Toronto-based real estate developer and founder of Globizen. I’ve been writing here since 2013.

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Tag: drone delivery

  • Beyond visual line of sight

    Drone delivery is one of those things that has always sounded really cool, but has yet to see a lot of adoption. As of May of this year, Amazon Prime Air has only made about 100 drone deliveries in California and Texas (the two states where it operates). This is compared to their initial target of 10,000 deliveries before the end of 2023.

    That said, last week, the Federal Aviation Administration (FAA) approved UPS (as well as other companies) to fly drones “beyond visual line of sight.” This seems like a pretty important approval, because I don’t know how you deliver anything meaningful if somebody needs to keep the drone within their line of sight.

    The thing that I can’t get over in my mind, though, is how you deal with the noise population associated with lots of drones flying around. It’s one thing if you live in a low-density community and a lonely drone comes by once in a blue moon to say hello. But in the city, even just replacing every cubed-shaped Uber Eats backpack would equal a hell of a lot of drones.

    Presumably they would fly, at least some of the time, on top of our existing streets, just above the cars. Because the authorization is only for altitudes below 400 feet. So for tall buildings, you wouldn’t always be able to do deliveries from the roof. And I guess that would be fine so long as they stop sounding like giant insects.

    If that were to be the case, it’s interesting to think about what that would do to all the real estate that exists at that same elevation.

  • Drone delivery doubled in the last two weeks

    One of Alphabet’s moonshot projects is an autonomous delivery drone service called Wing. As far as I can tell, they’re only company offering this kind of service to the general public in North America — though they are only operating in a few test locations in Virginia, Finland, and Australia.

    Specifically:

    • Canberra, Australia
    • Logan, Australia
    • Helsinki, Finland
    • Christiansburg, United States

    Not surprisingly, demand for Wing deliveries has surged during this pandemic. According to the Verge, the company made over 1,000 deliveries in the past two weeks, which represents a doubling of deliveries in the US and Australia. The most popular items seem to be essentials like toilet paper and coffee.

    This is perhaps a good example of the argument that COVID-19 isn’t going to change things per se, it will simply accelerate the adoption of things that were already in the process of happening. I was and am of the opinion that drones will become an integral part of delivery logistics. (Full disclosure: I own a bit of Alphabet and Drone Delivery Canada stock.)

    There is still a lot that will need to happen. Alphabet/Wing is also working on an autonomous traffic management platform, because you obviously need something robust if you’re going to scale this up. How you make this work in dense urban environments is also a whole other kettle of fish, though already people are starting to reconsider how rooftops are used.

    For more on Wing, click here.

    Image: Wing

  • Air Canada partners with drone delivery provider

    Today, Drone Delivery Canada (TSXV: FLT) — a company that I have written about before on the blog — announced that it has entered into an exclusive 10-year agreement with Air Canada. Press release, here. Globe and Mail article, here. BNN Bloomberg article, here.

    As part of the agreement, Air Canada Cargo will market, sell, and promote DDC’s drone delivery services across the country using its sales and marketing platforms. It will be positioned as premium offering, and Air Canada has agreed not to engage any other drone delivery service during the term of the agreement.

    This is a pretty big deal for DDC because it gives them distribution and legitimacy (they’re a pre-revenue company). And for Air Canada, it is an opportunity to be a part of “Canada’s first national drone cargo solution.” The promise is a more cost-effective solution for servicing remote communities.

    DDC plans to build out and operate up to 150,000 drone delivery routes across Canada as a result of this partnership. But, of course, it remains to be seen just how profitable these routes will be when they begin servicing their low-density communities.

    Full disclosure: I am long $FLT because I think that what they are trying to build is very interesting and I think that better connectivity will be a positive thing for remote communities within Canada.

    Photo by Ethan McArthur on Unsplash

  • Public perception of drone delivery

    Back in 2016, the United States Postal Service published a report on the public perception of drone delivery in the US. This was nearly 3 years after Jeff Bezos announced on 60 Minutes that Amazon was working on a drone delivery service and that it would arrive within the next 5 years (so by 2019). I think USPS was trying to figure out how to be, or appear, more innovative.

    Not surprisingly, the report found that Millennials were significantly more supportive of drone delivery (65%) compared to Baby Boomers (24%), who strongly dislike the idea. Generally, the report indicates that the percentage of people who think it’s a good idea declines with every preceding or older generation. Again, I don’t find this at all surprising.

    But what I did find interesting was that, irrespective of age, respondents were primarily concerned with some sort of “malfunction.” This was at the top of the list. Next in line were concerns around “intentional misuse,” such as drones being used to transport illicit goods or to spy on people and/or property.

    Closer to the bottom of the list was a concern that drone delivery “might make the sky less pleasant to look at.” My own view is that visual clutter and noise pollution are critical problems to address here. There’s talk of “drone highways in the sky”, but how do you really manage the sheer volume of drones that would be needed to service a dense urban environment?

    Photo by Goh Rhy Yan on Unsplash

  • How ecommerce is growing in rural China

    This piece in the New Yorker about how e-commerce, and in particular JD.com, is transforming rural China is worth a read.

    In typical New Yorker fashion, it’s a good long-form read, but one that you can also listen to if that’s your thing.

    What’s immediately fascinating are how important trust is to JD’s rural expansion strategy and how locals from these rural communities are used to penetrate the social networks.

    Today, Xia oversees deliveries to more than two hundred villages around the Wuling Mountains, including his birthplace. But, in line with JD’s growth strategy, an equally important aspect of Xia’s job is to be a promoter for the company, getting the word out about its services. His income depends in part on the number of orders that come from his region. Across China, JD has made a policy of recruiting local representatives who can exploit the thick social ties of traditional communities to drum up business.

    This is important because:

    “Chinese people don’t easily believe the good will of strangers,” Liu told me. “Why do you think Chinese fight tooth and nail to get on the bus and subway?” He shook his head and laughed. “It doesn’t matter that it’s less efficient or unnecessary. It’s a complete reflex for them, because it’s what they’ve been taught since they were young.”

    When you have some time, here is the full article. 

    According to the New Yorker, JD.com is the third largest tech company in the world in terms of revenue. They also have the largest drone delivery platform in the world.