Dive Brief:

• JD.com, a Chinese company that specializes in direct online sales, is developing a drone network plan in Canada that would deliver seafood from East Coast processing plants to an airport, thereby substantially reducing land-haul costs as the seafood makes its way to China, The Globe and Mail reports.
• JD's CEO Richard Liu, who met with Canadian Prime Minister Justin Trudeau in Beijing to discuss the drone technology, says that it has the potential to reduce logistics costs by 50% to 70%.
• A farm to airport to China journey for produce would involve drones hopping between small bases along the way that can be constructed for as little as $125,000. According to Liu, this would especially benefit Canada, which has a comparatively higher cost of shipping combined with a small number of airports that can relay goods to China.

Dive Insight:

Drones extend their reach in ocean crossing specialized delivery, and JD's proposal is a good illustration as to how it might work.

Drones have previously delivered food in Iceland, medical provisions from Johns Hopkins University, while improving inventory accuracy rates, greater operational efficiency and employee safety within the supply chain.

Drones are ideal for some types of delivery, saving logistics costs. "One employee can control a fleet of drones —manpower costs are cut and more deliveries can be executed," Yariv Bash, Flytrex CEO told Supply Chain Dive. "Drones don't face traffic hazards and delays, meaning they are both safer and quicker that traditional delivery methods, and drones are 100% electric, so there are no pricey gas costs (and bonus - no greenhouse emission)," he added.

For example, Bash cites the simplicity of drone versus vehicular deliveries. "A 20 minute drive takes the drone about four minutes, so drones enable hassle-free deliveries to remote or suburban areas, eliminating the need to send a vehicle to far locations in-order perform single deliveries."

The types of clients best suited to drone delivery vary as well. "The ideal clients are food retailer (restaurants, fast food places,etc), or consumer retailers (e-commerce sites, shopping centers etc)," Bash concluded. "Basically any small parcel weighing up to 6 lbs can be delivered by a drone. The drone can either be added to an existing delivery fleet containing traditional delivery methods, or a whole new fleet can be established."