Drone based delivery system: Restrictions and limitations

Seidakhmetov, Azamat; Valilai, Omid Fatahi Conference Paper Drone based delivery system: Restrictions and limitations Provided in Cooperation with: Hamburg University of Technology (TUHH), Institute of Business Logistics and General Management Suggested Citation: Seidakhmetov, Azamat; Valilai, Omid Fatahi (2022) : Drone based delivery system: Restrictions and limitations, In: Kersten, Wolfgang Jahn, Carlos Blecker, Thorsten Ringle, Christian M. (Ed.): Changing Tides: The New Role of Resilience and Sustainability in Logistics and Supply Chain Management – Innovative Approaches for the Shift to a New Era. Proceedings of the Hamburg International Conference of Logistics (HICL), Vol. 33, ISBN 978-3-756541-95-9, epubli GmbH, Berlin, pp. 351-373, https://doi.org/10.15480/882.4711 This Version is available at: https://hdl.handle.net/10419/267192 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. 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ISBN 978-3-756541-95-9, September 2022,epubli Azamat Seidakhmetov and Omid Fatahi-Valilai Drone based Delivery System: Restrictions and Limitations CC-BY-SA4.0 Proceedings of the Hamburg International Conference of Logistics (HICL) –33 Drone based Delivery System: Restrictions and Limitations Azamat Seidakhmetov 1 and Omid Fatahi-Valilai 1 1 – Jacobs University Bremen Purpose: Considering the idea of drone application in last mile delivery, this paper has examined literature studies about the restrictions and pitfalls which the organizations will face with for using drones in the last mile delivery. Moreover, the recent drone tests for commercial purposes in last mile delivery industry and challenges in these practices are investigated. Methodology: A survey-based approach has been applied to both the potential customers of the drone delivery service and also literature review for discovery of latest practices for drone enabled delivery projects has been targeted to identify the limitations and restrictions. Findings: The study demonstrates the problems that arise when the delivery drone crushes while in the air and the approach of self-exploding drones does not seem to make positive effect on this problem. Also, issues like special area for landing, noise of drone activities, safety and security of citizens in urban area are found to be main concerns. Originality: Very few research studies have been conducted in evaluation of using drones for last mile delivery operations focusing on current limitations and forthrightly downsides of drones of current state of the art. Therefore, this paper has tried to elaborate the limitations and restrictions from two perspectives of potential customers and technology developers. First received: 09. Mar 2022 Revised: 24. Aug 2022 Accepted: 25. Aug 2022 Drone based Delivery System: Restrictions and Limitations 1 Introduction 1.1 Motivation Increase of digitization technologies and their effects for improvements of interactions among computers and automation, reinforced with autonomous and smart systems have faced industries with the opportunity of process improvements (Keliang , et al., 2016; Delaram & Fatahi Valilai, 2019). This has also enhanced the in-store consumer behavior and the way how end users consume the product. According to Federal Reserve Bank’s economic data, the E-commerce retail sales as a percent of total sales has increased from 0.8% in Q1 2000 to enormous 16.1% in Q2 2020 (Federal Reserve Bank of St. Louis, 2021). This means that the customers’ preferences are changing towards the online shopping and even when they make in-store purchases about 38.5% of them were digitally influenced (Satish & Sanjeev, 2017). Taking the massive adoption of information and communication technologies as the internet into account, many businesses have reorganized the method of how products will be produced, advertised and purchased (Nestor, et al., 2017). Hence, the eagerness of individuals for online shopping channels has resulted in the introduction of businesses offering e-commerce services compared to the traditional one, especially when global pandemic step on, many businesses survived by going online (Montenegro, 2021). One of the most successful examples of e-commerce business would be Amazon.com Inc., here forth Amazon, which started as an online book-retailing business with a mission to create real value for customers–by making their shopping easier and convenient (Amazon 2018). The online shopping industry is in process of constant growth and Amazon might be considered as one of the key contributors of this growth, increasing its net sales from $1.6 billion to $280.5 billion over the period of two decades between 1999 and 2019 (Amazon, 2020). However, the rapid augmentation in the supply chain of the companies as Amazon, DHL, UPS, etc. and overall consumer consumption rate has come with some challenges in optimization throughout the whole supply chain. For instance, as delivery services become more and more popular, studies showed that the share of last mile service costs accounts for 41% of whole supply chain costs (Capgemini Research Institute, 2018). Additionally, this number is more than two times larger than any other Seidakhmetov and Fatahi-Valilai (2022) 353 category of costs incurred in supply chain such as sorting, inventory or other remaining supply chain costs. Moreover, naturally last mile delivery cost is defined as variable cost, and it might get larger in case if overall delivery volume increases. Therefore, coming up with a new approach in last mile delivery to cut losses in cost and time was in interest of above-mentioned companies like the application of drone enabled deliver technologies (Farajzadeh, et al., 2020; Moadab, et al., 2022). 1.2 Research aim The recent legislation of Drones for commercial purposes by governmental authorities has laid the first stone for the large-scale implementation of UAVs (Unmanned Aerial Vehicle) in last mile delivery of products (Andy & Ferek, 2021; Ahmadi, et al., 2021). During the last decade, a tremendous amount of work has been done on optimization of logistics of drones and their applications in parcel delivery along with advantages the dronebased delivery system has compared to traditional truck-based shipping mode in last mile logistics. However, very little amount of research has been conducted in evaluation of employment UAVs considering the current limitations and forthrightly downsides of drones of current state of the art. Therefore, the framework which will contain all the negative side effects UAV deployment in last mile logistics may bring along through the thorough analysis of previous literature. Additionally, a survey to both the potential customers of the drone delivery service and providers of air delivery will be conducted to identify other limitations and restrictions both parties see. Hence, the results will be added to the framework considering the actual weight of the problem. First, getting acquainted with the previous literature and studies about the Unmanned Autonomous Vehicles and their usage in delivery businesses will be on top priority. The literature and studies being examined will be mainly about the restrictions and pitfalls the organizations forcing the massive avail of drones, for example Amazon, are facing in the last mile delivery. however, the drone examinations for commercial purposes and what challenges the drone delivery is facing with will be deeply considered. In parallel with the research, a survey will be conducted on studying the vision and preferences of customers regarding the drone delivery system. Subsequently, the data obtained will be thoroughly analyzed through data analysis tools. Then, tendencies and Drone based Delivery System: Restrictions and Limitations trends in customer behavior will be identified and finally the recommendations and advice will be proposed for the future research studies of this topic. 2 Literature review 2.1 Challenges in last mile delivery Over the last decade, e-commerce business models have shown the increase in the number of on-line orders. Accordingly, vendors have to fulfill the enormous demand from private customers through attaining the lowest delivery time of parcels, mainly low weight and small volume, being shipped while constantly facing the overlap in the time windows of customers (Zeynivand, et al., 2021). Therefore, different players throughout the supply chain are trying to refine their plants by making the production processes available 24 hours a day, reducing the processing time of orders and transportation (Archetti, 2020). Nevertheless, the problems associated with decrease of the costs and resources spent in last mile delivery are still currently challenging (Khaturia, et al., 2022). Examining a closer investigation on the root of the problem, there can be derived that the challenges emerging in the last mile are mostly arose from the fact that shipments are formed from individual customers and from a large scale of diversification of destinations, meaning that each order has to be shipped to different address (Macioszek, 2017). Additionally, last mile logistics employs the service of freight carriers. Therefore, especially in highly dense areas, freight carrying truck drivers are encountering large deal of problems (Aljohani, 2020). Efficient optimization of urban mobility is a key for the economic success of large metropolitan areas and respectively delivery of parcels on time is also crucial factor for companies to satisfy the customers’ need. Recent studies have shown the increasing demand for express and small size parcels in densely populated areas in Europe and there’s also a tendency of customers preferring same-day delivery (Mazareanu, 2019; European Commission, 2018). Furthermore, couriers have to travel long distances from distribution centers mainly located in suburban areas to satisfy the wants of end-users vastly located in inner-city areas. Seidakhmetov and Fatahi-Valilai (2022) 355 One more factor negatively affecting the logistics in last mile stage is the presence of high skyscrapers, each comprising bunch of various business establishments, retail stores, food shops and public areas in city centers of large urban areas. Despite the fact that those commercial city towers do not span large area compared to other retail stores and businesses located in one single block, they do effectuate complexity as they simply engender vast amount of freight movement. For example, it was estimated that around 4% of all truck movements in all districts of Manhattan was mainly triggered by 56 neighboring business towers (Miguel, et al., 2015). Moreover, enterprises located in skyscraper buildings mainly order parcels through express delivery meaning the shipment in the same day at hand. In general, the city center area suffers from great amount of traditional truck movements. Here are the factors negatively causing the last mile delivery: 1. Restricted and inconvenient infrastructure for parking the freight trucks and loading the shipments. 2. Intense traffic movement caused by pedestrians, cyclists and congested with other private vehicle owners. 3. The local streets in city centers accessible only for pedestrians. 4. Deficit of facilities that would allow truck drivers to load packages beyond the street. In the e-commerce era, businesses getting more and more digitized, and customers’ standards being increased, last mile distribution of shipments to end-users appearing to be an issue entangled more than ever. Additionally, the amount of goods to be delivered door-to-door towards the customer living places is increasing the number of trucks needed to be involved in inner-city traffic and CO2 emission (Paul & Benjamin , 2018). Accordingly, the emergence of novel last mile delivery concepts was unsurprising and was just a matter of time. 2.2 Advantages of drone-based delivery system It is undoubtedly that logistics is a dominant factor in businesses as customer’s expectations to have their desired products promptly, and hence, logistics companies try to meet customer’s ever raising high standards in the most economically viable way. As discussed earlier, traditional truck-based delivery system has a lot of drawbacks and Drone based Delivery System: Restrictions and Limitations most importantly it is economically detrimental. Therefore, there are various transportation modes such as vessels, goods trains, trucks, carts, etc. have been invented. One of the most eminent and notorious concepts being actively developed during recent years is the Unmanned Aerial Vehicles or drones. A drone, UAV or Remotely Piloted Aircraft is a flying robot which can be controlled remotely or can fly autonomously without the assistance of human pilot (Federal Ministry of Transport and Digital Infrastructure, 2021). As there are many ways the drone can be referred to, in this paper, the terminology ‘drone’ is selected in further deliberation. Back in 2019, analysts have forecasted that drones and UAVs are highly likely to be prominently employed for commercial purposes as shown in Figure 1. The sales and revenues accounted for 392 thousand and 1.6 billion USD back then and these values were projected to reach 12.6 billion USD by 2025. The demand for drones has exceeded all optimistic forecasts until then, for instance, the sales of UAVs in 2020 in US alone outreached $1.25 billion (Insider Intelligence, 2021). Now, Goldman Sachs projecting total market size of drones to hit $100 billion by 2025. Apart from that, analysts at Insider Intelligence strongly believe that global shipments being operated with the aid of UAV services will reach 2.4 million by 2023 taking the 66.8% of annual compound growth rate (Insider Intelligence, 2021). Also, it is projected that drones will mainly be employed by five main industries: Agriculture, construction and mining, insurance, media and telecommunications, and law enforcement (Insider Intelligence, 2021). Recent years have demonstrated that drones have the potential to be one of the most essential technologies of our time, especially it was vivid in 2020 when contactless services were in high demand because of the pandemic. Nevertheless, drones are already in use in some places and big corporations such as Amazon, Google, UPS and DHL have already tested them in various environments. Furthermore, they are now capable of lifting freight weighing up to 2-3 kg (McKinsey & Company, 2016). The parcelcopter 4.0 of DHL in collaboration with the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH under the German Federal Ministry and German manufacturer Wingcopter have performed 60 km flight in 40 minutes to deliver medicines to remote rural areas during the pilot project in East Africa (DHL, 2020). Seidakhmetov and Fatahi-Valilai (2022) 357 Figure 1: Projected worldwide market growth for commercial drones (Buchholz, 2019) The fourth generation of parcelcopter is able to speed up to 130 km/h, fly 65 km distance with full battery level and carry up to 4 kg cargo and also have shown that drones can operate in spite of ‘natural barriers’ and can be a complete game-changer in the areas where the road system is not available (DHL, 2020). Furthermore, partnering with EHang DHL have launched first completely UAV based delivery mode in urban area of China in 2019 (Hartmann, 2019). They highlight the fact that they could reduce cost per delivery by 80%, shorten the 40 minutes lead time to 8 minutes and with significantly less energy consumption and CO2 emission (Hartmann, 2019). As an entirely autonomous solution, drones, can lift packages up to 5 kg per flight and operate being atop of special intelligent cabinets where sender can simply load/unload the shipment (Hartmann, 2019). Whereas DHL’s rival companies as Amazon, UPS, FedEx and Google’s sister company Alphabet’s Wing are also in process of making drone delivery reality. Amazon’s Prime Air service already offers its customers living in 15 miles within the selected areas to get delivered their items weighing less than 5 pounds (2.3 kg) in less than 30 minutes (Wilke, 2019). The drone is equipped with AI system which will help to recognize obstacles, animals, people, etc. and will need a small area around the delivery location to unload the parcel (Wilke, 2019). Plus, Amazon claims the weight limit of 5 pounds covers around 75-90% of purchased items in the platform (Wilke, 2019). While Wing drone has Drone based Delivery System: Restrictions and Limitations Figure 3: Willingness to use drone delivery service 3.3 Experts The experts whom were contacted in this survey were working in Sustainability, Mobility, Logistics, and drone projects of various enterprises for more than four years. The questionnaire itself consisted of two parts. The purpose of first part was to obtain the points of view of those specialists on various pre-described restrictions of drone technology. While the second part was generated in order to allow the responders to rank the severity of issue on 1-5 scale, where 5 is very complex, 4 is slightly complex, 3 is neutral, 2 is slightly negligible, 1 is negligible. The first question explained the problem of battery and charging of drones. To address this issue, some adjustments in city infrastructure as charging stations or beehive buildings where drones could be able to stay and charge their batteries is needed. This leads to other problems as city authorities, residents and cultural acceptance. Additionally, flying maneuvers at low battery levels can be catastrophic compared to when traditional truck runs out of fuel. The responders deem that the installment of charging stations where they will not disturb urban traffic at all would minimize the effect of this issue. Seidakhmetov and Fatahi-Valilai (2022) 365 The next question raised the issues of unwanted noise amount generated as a result of drone operations. Indeed, this issue can get even more severe when entire cities will employ thousands of drones in last mile logistics. One of the responders mentioned that drones don’t cause much noise than cars, trucks, and other urban traffic does, and residents will get used to it by the time passes. While another specialist noted that drone delivery mode should be allowed only for essential deliveries and in restricted amount. As discussed earlier the variability of packages which needs to be delivered by drone is restricted by their weight limit. Amazon air prime, for instance, can ship products below 5 pounds or 2.25 kg at once. One of the specialists said: “Once the drones will be successfully used in everyday delivery services for packages up to 5 kg, and if the clients will be satisfied and demand will be high, then the ways of upgrading the drones could be considered”. In case demand is high, there should be enough funding and resources for the upgrade. However, half of the responders consider this issue as slightly complex, one as very complex, and one looks at this neutrally. Apart from that, in case of emergency, some drones will activate self-explosion mode so smaller pieces will fall down, and less damage will be caused (Vincent, 2017). Responders pointed out that this technology is very dangerous and another approach as the implementation of built-in parachute which will be activated in case of falling should be studied. 75% of specialists considered the problem as either as slightly severe or very difficult. In case of drone accidents, there might be several parties being deteriorated: the shipper who sent the item and lost it; the owner of the property (e.g. house, car, etc.) the drone pieces fell onto; a customer who won't be able to get his item on time. The specialists think the involvement of insurance company in this process would help to distribute the responsibility fairly, saying that if the carrier will have to cover the whole expenses associated with the damage caused due to drone crush the replacement of traditional delivery with drone services won’t be possible in near future. Hence, all of the respondents rated this issue as either slightly severe or very complicated. Some citizens living in residential area where drones were being tested are concerned about their privacy and safety, especially the camera recordings of drones (Cherney, 2018). To mitigate this problem, the organization of educational events raising public awareness would make sense. The answerers reckon the detailed information about Drone based Delivery System: Restrictions and Limitations navigational purposes should be made public and they all rated this issue as slightly difficult. 3.4 Discussions The results show that though the 47.2% of respondents are planning to use drone delivery mode regularly, there are number of challenges which needs to be overcame. For example, 38.9% of responders don’t have the ability to offer a special area for landing maneuvers of drones. For this issue, respondents in the second group of survey suggested the DHL’s approach which involves the installment of intelligent cabinets that were specifically developed for the completely autonomous loading and unloading of the shipments. Another problem is associated with safety and security of the well-being of citizens living around as 19.5%, almost 1 out of 5 people, do not feel safe and protected if drones were flying around. This phenomenon might provoke other issues connected with the mental health of residents. The studies demonstrate that there’s a raising tendency that city dwellers are moving to suburbs in search of better quality of life. Moreover, drone propellers generate great amount of noise which eventually adds up to this problem. Consequently, the challenge gets especially crucial with the 52.8% of respondents identifying themselves as either slightly or very sensitive to noise. Additionally, 69.4% are willing to wait their packages from 2 days to 1 weeks which eliminates the need for instant drone delivery. Furthermore, respondents have noted that they don’t feel comfortable living around drone activity areas backing it up with the little development in computer vision and navigation algorithms. It can be concluded that there is a direct relationship between how people feel around drone operating area and their willingness to use the service. On the other hand, some believe that infrastructure and regulations must catch up to drones before wide-scale adoption to prevent violations in privacy and airspace. Plus, the environmentally sustainability of drones also positively influenced the respondents’ vision on whether they support the drone delivery adoption or not. When it comes to the responses of specialists, the most crucial problem was found to be the question of who should take the responsibility if delivery drone crushes in the air. They have mentioned that the involvement of 3rd party insurance company would make Seidakhmetov and Fatahi-Valilai (2022) 367 the situation easier. However, there emerges another question of who should cover the cost of that insurance company’s service? The carrier? The sender, online shop, retailer? Or the recipient? The data protection and privacy of people was happened to be the second most important restriction in deployment of drone technology in last mile logistics. Drones possess a great deal of cameras, LIDAR (Light Detection and Ranging), sensors, and actuators that monitor the real-time surrounding environment and that is essential in drone operation. The selected responders indicated that the detailed information about navigational purposes should be made public and the camera recordings should have an expiration date, meaning the camera footages will be deleted after set time. This period should be discussed with representatives who live in testing area and consent form should be signed. Surprisingly, the solution with self-exploding drones and drone crush while in the air were also occurred to be one of the most severe issues the carriers have to address to execute the massive employment of UAVs in delivery industry. Even though there were number of difficult challenges discussed, responders seem to be optimistic about drone future and think we will see the replacement of traditional truck-based delivery system with UAVs in 2-5 years. In the very beginning of the paper the majority of challenges that exist in the development of UAV based air delivery were identified. At first, they were discussed with potential customers of the novel technology and the most essential problems were sorted out. In parallel, those issues were also disputed with the specialists professionally working close to this industry. As a result, the possible solutions that might help to mitigate some of those issues were proposed and the most important, hard-to-crack problems were distinguished. Both two survey results illustrate that the availability of special area in the living place of the receiver, limitation in the weight of package the drone is able to deliver, lifting power of drones and installment of charging stations are the challenges that make little sense. Drone based Delivery System: Restrictions and Limitations 4 Conclusion This paper has elaborated the limitations and restrictions of drone-based delivery system. This research has discussed the most prominent challenges in the development of UAV based shipment mode have been identified through the study of various scientists’ research study, case studies and customers’ feedback. The paper has conducted surveys for the representatives of both parties, the specialists, and customers in order to identify the most significant challenges and to disregard the ones that are less important, or the possible solution is available. The paper has examined the respondents’ view on the limitations and restrictions in the cultivation of drone delivery method based on the current solutions of Amazon’s Prime Air, DHL and EHang’s drone delivery service, and Google’s sister company Alphabet’s Wing. The studies demonstrate the problems that arise when the delivery drone crushes while in the air and the approach of self-exploding drones has not been found to make positive effect on this problem. The interesting area for future studies could be conducting research on introducing another solution for drone crushes while operating in the air. Acknowledgement The paper has been derived from a thesis entitled “Drone based delivery system: restrictions and limitations” in the program of Industrial Engineering and Management, class of 2022, Jacobs University Bremen. The paper has condensed the gathered data and analysis from the aforementioned thesis. Seidakhmetov and Fatahi-Valilai (2022) 369 References Ahmadi, E., Wicaksono, H. & Fatahi Valilai, O., 2021. Extending the Last Mile Delivery Routing Problem for Enhancing Sustainability by Drones Using a Sentiment Analysis Approach. 13-16 Dec. 2021, Maria Bay Sands, Singapore, IEEE, pp. 207- 212. Aljohani, K., 2020. An Examination of Last Mile Delivery Practices of Freight Carriers Servicing Business Receivers in Inner-City Areas. [Online] Available at: https://www.mdpi.com/2071-1050/12/7/2837 Amazon, 2020. 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