Dive Brief:
- Drone delivery company Flytrex on Wednesday partnered with AHA, Iceland's largest online marketplace, to provide delivery by drone in Reykjavik.
- The partnership creates the world's "first operational on-demand urban drone delivery service." Using drones, Reykjavik's food and consumer goods delivery industry will reduce costs by increasing efficiency, reducing energy consumption and streamlining delivery logistics.
- The Icelandic Transport Authority approved the companies' request to use drones to deliver food and consumer products from shops to a precise point across the city. Drone deliveries can save up to 20 minutes during peak traffic hours, according to Flytrex and AHA.
Dive Insight:
Flytrex CEO and co-founder Yariv Bash believes there's not enough evolution within last mile delivery logistics.
"We’re making delivery much more efficient,” Bash told Supply Chain Dive. "Drones offer better service than a driver in a car or a truck somewhere."
The Israeli-based company earned $3 million in funds last January to increase its drone offerings.
"We're working on several other deals but the current regulation means we're not ready to announce yet," Bash said. "Once various governments learn about Flytrex's experience in the industry, doors tend to open more easily."
In the U.S., supply chains are already aware of drones' serviceability. Tests reveal their usefulness on construction sites, warehouses, and railroads, but especially for last-mile delivery. Convenience store 7-Eleven has already piloted the technology for home delivery, while medical school Johns Hopkins is testing the technology for store delivery of medical provisions.
The machines could also benefit the U.S. economy. In 2016, the White House estimated that unmanned aircraft could bring as much as $82 billion in economic growth by 2025 and generate 100,000 jobs. Already more than 300 waivers for drone use have been granted to companies like Union Pacific, BNSF Railway and Intel.
However, as Bash noted, regulations remain drones' biggest stumbling blocks. Privacy laws, weight limits and even public safety have delayed widespread implementation. Population density is a major issue within the U.S., and though drone popularity is growing, their legality as delivery agents remains up in the air.
