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State of the Art: Think Amazon’s Drone Delivery Idea Is a Gimmick? Think Again

There are hurdles to realizing this vision. Drone delivery in the United States faces an uncertain regulatory future, and there are myriad technical and social problems to iron out. Still, experts I consulted said that a future populated with autonomous drones is closer at hand than one populated with self-driving cars.

“It’s a vastly easier problem — flying than driving,” said Keller Rinaudo, the co-founder of Zipline, a drone-delivery start-up that will begin deploying a system to deliver medical goods in Rwanda this fall. “If we had regulatory permission, we’d be delivering to your house right now,” he added, referring to the San Francisco Bay Area.

If Amazon’s drone program succeeds (and Amazon says it is well on track), it could fundamentally alter the company’s cost structure. A decade from now, drones would reduce the unit cost of each Amazon delivery by about half, analysts at Deutsche Bank projected in a recent research report. If that happens, the economic threat to competitors would be punishing — “retail stores would cease to exist,” Deutsche’s analysts suggested, and we would live in a world more like that of “The Jetsons” than our own.

Shipping has always been at the core of Amazon’s strategic investments. In its earliest days, as part of an effort to avoid collecting sales tax from most customers, Amazon purposefully placed warehouses in low-tax, low-population states, and then shipped goods to populous areas within three to five days.

The 2005 introduction of Amazon’s Prime subscription program, which gives customers two-day delivery on many goods for an annual price of $ 99, changed Amazon’s shipping needs. Prime encouraged customers to buy a lot more stuff, and it also forced Amazon to deliver packages more quickly.

That explains why Amazon abandoned its tax-avoidance strategy earlier this decade and began building dozens of warehouses in populous areas. It also ramped up a system called “postal injection,” in which it uses prediction algorithms and complicated network analysis to figure out how to deliver every package to the United States postal facility nearest a customer’s house. According to Deutsche, postal injection has allowed Amazon to slash the cost of the most expensive leg of shipping an item, the “last mile” from a warehouse to customers’ homes. So despite shipping most goods faster, between 2010 and 2015 Amazon cut its shipping costs from $ 5.25 per box to $ 4.26, Deutsche estimates.

But that’s still not low enough. Though Amazon has released a string of stellar earnings reports recently, its shipping costs are rising, and it faces capacity constraints. During the holidays two years ago, a surge of online orders overwhelmed UPS, leading to missed deliveries.

A more severe problem looms in the long run: The transportation infrastructure in the United States is aging, and the Department of Transportation has warned that unless urgent and expensive fixes are made, roads, waterways, airports and other systems will become alarmingly clogged by the 2040s.

For Amazon, that projected future is catastrophic: Pretty much all of Amazon’s current investments in shipping — in trucks, planes and crowdsourced delivery cars — depend on the traditional shipping infrastructure.

All, that is, except for drones — which explains why they are integral to Amazon’s vision of the future of retail.

I was first clued in to the importance of Amazon’s drone initiative, called Amazon Prime Air, when I met Gur Kimchi, the head of the program, at an industry conference a few months ago. Though our conversation was off the record, Mr. Kimchi’s detailed answers to my questions suggested I had been too quick to dismiss the initiative.

When I began talking to others in the drone industry about Amazon’s interest in autonomous flight, they all pointed out that drones offer a way to leapfrog roads. Because they operate in a new, untrammeled layer of physical space — below 400 feet, an airspace that is currently unoccupied in most of the country — they open up a vast new shipping lane.

Beyond posting several videos, Amazon has not revealed much publicly about its drone program, but it has been working with regulators worldwide to set up tests of the system. It envisions drones being able to deliver packages up to five pounds in weight, which account for 80 to 90 percent of its deliveries.

Amazon also said it has built many different kinds of prototypes for different delivery circumstances. The first rollouts will likely be in low- and medium-density areas like suburbs, where a drone might land in a backyard to drop off shoes. But the company said it was also working on systems to deliver to cities — for instance, drones could deliver packages to smart lockers positioned on rooftops.

As it happens, the shipping company DHL has tested just such a drone-to-locker delivery system in Germany; a representative told me that the test was a success and that it plans to expand the technology depending on regulatory approval. Amazon’s patent filings hint at even more fanciful possibilities — drones could ferry packages between tiny depots housed on light poles, for example.

Others project even wilder ideas. Ryan Petersen, the founder of the logistics software company Flexport, pointed out that Amazon had filed patents that envision using trucks as mobile shipping warehouses. Such self-driving trucks, prestocked with items Amazon has determined a given neighborhood might need, could roam around towns. When an order comes in, a drone might fly from the truck to a customer’s house, delivering the item in minutes.

Scenes like that are most likely in the far-off future. But according to Amazon, the earliest incarnation of drone deliveries will happen much sooner — we will see it within five years, somewhere in the world.

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