Dive Brief:

• DHL became the first international logistics provider to launch an autonomous aerial vehicle (AAV) drone delivery service in China on May 16. The company debuted an exclusive, eight kilometer (five mile) drone delivery route for a customer based in Guangzhou. The trip, which previously took 40 minutes one-way by car or truck, now takes eight minutes while producing a fraction of the overall carbon footprint.

• DHL is partnering with chinese drone company EHang for the flights, using the company's latest Falcon series AAV which can carry parcels weighing up to five kilograms (roughly 11 pounds). The drone comes equipped with vertical take-off and landing capabilities and includes AI and smart sensing technologies to help it autonomously navigate a variety of environments.

• DHL leadership hopes drone delivery can significantly reduce the high level of risk, time and expense it takes to ship goods to customers living in rural and/or densely urban regions of the country that aren’t easily accessible by truck or standard air shipping modes.

Dive Insight:

China’s drone market has been booming. JD.com and competitor Alibaba started deploying delivery drone programs in 2016 and 2015 respectively. Similarly, DHL has recognized drones may be the key to solving the last-mile delivery challenge posed by the densely urban and inaccessibly rural infrastructure of emerging countries. In these areas, the time, expense, and risk involved in last-mile delivery by truck or courier is a significant resource drain.

Following this current pilot, DHL has plans in place to continue its partnership with EHang and develop a next generation of drones capable of handling more weight and traveling longer distances.

This expansion of DHL's presence in China is in line with its strategic goal of generating 30% of its revenue from emerging markets by 2020.

While the partnership with EHang marks DHL’s latest foray into the drone delivery space, the company has been experimenting with drone delivery for a few years with its Parcelcopter pilot in Reit am Winkl, Germany. The company ran a three-month trial shipping 130 shipments over 8-kilometer distances in the area. According to the DHL website, the program has now been fully integrated into its delivery chain.