Cashback News – June 7: Drones – What’s the buzz?

Drones whats the buzzYou can’t read about e-commerce logistics without mention of how drones are going to eventually play a critical role in “last mile” delivery to consumers. From Australia and China to Europe, the US and around the globe. In agriculture, land management energy, construction and e-commerce. While governments struggle to get regulations in place, many companies, from Amazon and Walmart to smaller operators, are already experimenting with drones. Here’s a high level industry news roundup to bring you up to speed and altitude.

A Business Insider report says CAGR of 19% will not come from e-commerce in the early days but rather niche industries such as agriculture, land management and energy. A Tech Crunch story reports that Chinese government has invested more than $197.6 billion in drone technology. CBInsights reported investments totaling nearly $500 million in the drone sector. As we reported last week, Amazon opened a Prime Air research and development facility in Graz, Austria.

DHL claims it is the first company to use drones to deliver packages commercially following deliveries of more than 130 packages in Germany. Walmart warehouses could be swarming with drones, using them initially for warehouse inventory and perhaps consumer deliveries in the future. In Japan, Rakuten launched delivery of golf products by drone to golfers on the course.

Allan Martinson, COO of robot builder Starship Technologies, says robots have a big role to play as well in future home and office deliveries. Drones were all the rage at CES 2016 Shanghai and sees a big role for them in China e-commerce. The Droneport project reached pilot stage in its plans to deliver medical supplies, spare parts, electronics and e-commerce in Rwanda and to areas of Africa in the future.

The Drones Report: Research, Use Cases, Regulations, and Issues fast-growing global drone industry has not sat back waiting for government policy to be hammered out before pouring investment and effort into opening up this all-new hardware and computing market.

A growing ecosystem of drone software and hardware vendors is already catering to a long list of clients in agriculture, land management, energy, and construction. Many of the vendors are smallish private companies and startups — although large defense-focused companies and industrial conglomerates are beginning to invest in drone technology, too. Via

Drones: Putting China’s economy on autopilot

chinadroneThe global drone market has been rapidly expanding, attracting loyal consumers while integrating itself as an emerging pillar in the technological sector. One country that has seen an extremely rapid rise in drone growth in terms of usage and production is China. Already heavily invested in producing intermediate parts for other aerospace vehicles, the Chinese are starting to prove themselves a drone-manufacturing powerhouse — and eager consumer base.

As an up-and-coming sector of technological innovation, in which China invested 1.3 trillion yuan ($197.6 billion) in 2015 (comprising over 2 percent of the GDP), drones are set to bolster the growth of the Chinese economy in the future.

Drones and economic growth
Drones will continue to support economic growth in China because it is a pillar of technological innovation, something China needs to drive its economy (as opposed to simply mass manufacturing disposable goods). “Indigenous innovation” campaigns and programs targeting innovation in the technological sector have been launched by both governmental and private entities.

Investors in the U.S. are already seeing the potential for economic growth in this Chinese market, with Intel investing $60 million in Chinese manufacturer Yuneec in August 2015 (with another $67 million in eight other Chinese drone companies that followed). CBInsights reported investments totaling nearly $500 million in the drone sector alone in 2015. Via

Amazon Hires Top Computer Vision Experts for Prime Air Drone Development, Inc. (NASDAQ:AMZN) has turned to Europe to expand on its efforts to make commercial drone deliveries a reality. The Verge learned last week that the ecommerce giant had enlisted a dozen computer vision experts in the Austrian city of Graz. Amazon has now confirmed the news; the team of experts is working at a new development center in the city to build sense-and-avoid technology for Prime Air drones.

Amazon Prime Air is the company’s innovative project to deliver products to customers through unmanned aerial drones. While speaking to The Verge, VP of Science Prime Air Paul Viola talked about the challenges involved in the delivery of products through drones. The team in Austria is making sure that the drones have the necessary capabilities to determine and avoid objects such as bushes and furniture and to be able to distinguish depth perception as well.

Another team member at the Prime Air lab spoke about how drones need to know exactly what they are facing, and how they are going to land in someone’s backyard or roof. Computer vision will allow these drones to understand their surroundings, while also educating them about the geometrical properties of the objects. A smart drone should know the difference between landing on ground and accidentally dropping a package into a swimming pool. While a swimming pool does seem like a perfect landing spot, a smart drone should know that it is not. Via

DHL claims its drones are first to deliver

DHL droneDeutsche Post DHL, Germany’s market leader in shipping and logistics, said that its trial drone program delivered over 130 packages within the Bavarian town of Reit im Winkl between January and March this year.

This makes DHL the first company worldwide to utilize drone technology to deliver parcels to customers, according to a press statement DHL released Monday. During the three-month trial, residents were invited to drop off shipments in “packstations” – centers of parcel lockers run by the company for drones to carry off to another packstation, all without human aid.

The Bonn-based company has dubbed its fleet of drones “parcelcopters,” which it first began testing in 2013. It aims to integrate them into its logistics chain to complete the “last mile” of deliveries. Via

Walmart’s Warehouses Are About to Be Swarming With Drones retailer arms race continues as Walmart becomes the latest company to jump on the drone bandwagon. But unlike nemesis Amazon and other companies testing delivery drones, Walmart will use drones to catalog warehouse inventory and potentially replace people who manually scan labels.

So add “warehouse workers” to “delivery drivers” in the list of people who need to worry if robots are taking their jobs, though a spokesperson told the New York Times that said workers “could” just work in other parts of the factory. (Of course, warehouse work has been known to be notoriously soul-sucking anyway.) The custom-built drones, which can take 30 images a second, fly through the store providing real-time data about whether everything is in the right place. This is the first big-scale example of warehouse drones and, if all goes well, might encourage other companies to rethink how their factories are run.

This is all part of Walmart’s effort to make good on its promise to offer even lower prices. As customers have gotten addicted to lower and lower costs, massive chain retailers—of which Walmart is the largest in the country—have had to get creative in squeezing every bit of savings they can. With an eye on Amazon, Walmart wants to beef up its online and e-commerce business and thinks drones could help it ensure that it never commits the sin of having an item out of stock. Via

Rakuten launches drone delivery service on golf courses

Rakuten droneJapan’s e-commerce giant Rakuten Inc. recently announced the launch of Sora Raku, a drone delivery service for consumers on golf courses. The service will be available starting Monday (9 May). The drones will be used to deliver golf equipment, snacks, beverages and other items to players at pickup points on the golf course.

With the service, players can use the dedicated Android app to place orders, confirm the total possible order quantity, and receive push notifications when preparations begin for dispatch and when the drone commences its journey.

To use the service players will need to log in using their Rakuten Member IDs, and can choose to pay by either credit card or with Rakuten Super Points. On the operator’s side, once an order has been received, staff waiting at a dedicated depot pack the goods into a delivery box and load it onto the drone. The staff then initiate the delivery process from the control screen on a dedicated tablet, and the drone flies to the pickup point autonomously. Via

Droids Not Drones Are the Future of E-Commerce Deliveries the shadow of Greenwich’s 02 Arena – the futuristic dome originally built as London’s showpiece for the Millennium – what looks like a picnic cooler on wheels zips among groups of gawking children. This little delivery robot, designed to autonomously navigate sidewalks, not roads, later this year will begin making deliveries from local businesses direct to customers.

In doing so, it may just conquer e-commerce’s final frontier: the Last Mile, the least efficient and most problematic step in the delivery process. “Thirty to forty percent of the cost of delivery comes in the last mile,” says Allan Martinson, the chief operating officer of Starship Technologies, the company building this robot. The venture is the brainchild of Ahti Heinla, one of Skype’s original developers, and is backed by billionaire Skype co-founder and tech investor Janus Friis.

The little delivery robots designed by Starship and a competing U.S. startup called Dispatch are the BB-8s and Wall-E’s of e-commerce. These scrappy droids are up against tech’s strongest forces. Amazon is testing airborne drones, as are Wal-Mart and Google. Google has also sought patents for a driverless truck that would carry an array of storage lockers that unlock with a text message. And Uber is deploying drivers for food delivery, a concept that could be expanded to other products. And don’t forget incumbents from Federal Express and UPS to government postal services. Via

Drones all the rage at CES Asia in Shanghai markets such as robotics, virtual reality and especially drones were the main focus at this year’s Consumer Electronics Show Asia in Shanghai. While taking pictures and video is the most common application, drones are increasingly being used in fields like agriculture, land management, energy, and construction.

“In the next couple of years, somewhere between one, two, three, four years, I think there’s going to be a junction between robotics, AR (augmented reality), and the drone itself. What that means is that the drone will be capable of doing things for you. Whether it’s delivery or scaring a bird off of a farm, or harvesting, or uses in the military, you will see the application of the drone,” said Michael Faro, President and CEO of wearable consumer electronics firm Mota.

Some believe the technology could transform the future of deliveries. E-commerce platforms are already testing it to deliver goods to people in less accessible rural areas. In July 2015, the Federal Aviation Administration approved the first such use of a drone within the United States, to deliver medicine to a rural Virginia clinic.

According to Josh Gartner, Senior Director of International Communications at, a Chinese electronic commerce company: “What we’re looking to do is we’re looking to reach the countryside where there may not be very good infrastructure, there may not be roads to get the packages to the people, and so truck delivery is probably not a great option. So by using the drones we can go over those areas and drop them directly into the villages and then have them distribute it from there. People want to be careful about new technologies, particularly objects flying around. So in larger cities it’s largely banned which is one of the reasons why we’re looking at rural areas.” Via euronews, science

Aid delivery by drone project hits prototype stage we previously reported, the Droneport project (which also involves several other firms too) is intended to deliver medical supplies, spare parts, electronics, and e-commerce to areas of Africa, and possibly elsewhere, that are lacking in paved roads and other infrastructure.

The idea is that each Droneport will be delivered on-site in kit form and include basic formwork and brick-press machinery for locals to construct their own buildings using locally available materials. Each building will house a fleet of cargo drones with a range of up to 100 km (62 miles), delivering supplies to those that need it.

The pilot scheme is expected to start operating later this year in Rwanda and include three buildings by 2020, covering up to 44% of the country by delivery drone. Subsequent phases will build additional Droneport units in Rwanda, possibly delivering medical supplies to neighboring Congo and even further afield, eventually branching out all over Africa. Via

Drones and logistics solutions ahead

We hope you enjoyed this look at drones and logistics technology. While it’s early days for implementation in industry and e-commerce, if there is a payback and cost efficiencies, VC investment and innovators will press forward. We’ll keep you in the air and in the loop.