Two giants in the drone delivery sector—Zipline and Wing, a subsidiary of Alphabet—announced major upgrades to their service capabilities earlier this month. Although their upgrade paths differ, both share the same goal: to expand operational scale and serve more customers. Wing expects its drone delivery network to be able to handlemillions of deliveriesby mid-2024; Zipline plans to achieveannual flight volume surpassing most airlines。

by 2025. To achieve these goals, substantial investment alone is not sufficient—Amazon's experience serves as a cautionary tale. Reports indicate that Amazon encounteredsafety challengesandlimited delivery operationsin its drone delivery efforts. Companies need to maximize network efficiency to lower operating costs while winning support from regulators and consumers to turn drone technology promises into reality. Otherwise, experts point out, it will take even longer for drones to become as common as delivery vans in communities.

Increasing density and adjusting regulations to reduce costs

Delivery operators are working to increase last-mile delivery density, for example, enabling couriers to complete as many deliveries as possible on a single route to spread operating costs. Although drones are typically limited to lightweight payloads, networks can build their own "density" advantage by ensuring the fleet operates continuously—making pickups and deliveries as frequently as possible—thereby supporting the sustainability of the business model.

"The worst-case scenario is having vehicles (whether drones or trucks) sitting idle," said James Campbell, professor of supply chain and analytics at the University of Missouri-St. Louis. "The sensible approach is to achieve enormous scale, keeping drones flying continuously, thereby spreading facility fixed costs across a large number of drones and a large number of delivery tasks."

Although delivery density is a key factor, it is only one way to reduce operating costs. Eric Peck, CEO of drone logistics platform Swoop Aero, noted in an email that designing faster drones can respond to demand more quickly, provide higher-value services to customers, and translate into more substantial profits. Extending delivery range is also beneficial, opening up new business lines such as maritime logistics for drone companies.

Peck also mentioned that one pilot monitoring multiple aircraft will help operators maximize returns on network investment. A McKinseyreport released in January this yearconfirms this view: under current pilot restrictions, drone delivery struggles to compete with other last-mile transportation methods in terms of operating costs. The report shows that the cost per package delivery with one person monitoring a single drone is approximately $13.50; if one operator can manage 20 drones simultaneously, the cost per delivery could drop dramatically to about $1.80.

Efficient operations hold the greatest potential for reducing drone delivery costs

Direct operating costs for delivering a 216-cubic-inch package over five miles, calculated by transportation mode and deliveries per operator.

In the United States,a waiver is requiredfor one remote pilot to operate multiple small drones; operators also need certification to conduct drone deliveries beyond the visual line of sight of the pilot or an observer.

For DroneUp, which is helping Walmart advance its goal ofone million drone deliveries per year, visual line-of-sight regulatory restrictions limit its delivery radius to approximately two miles. Breaking through this limitation would bring significant benefits—DroneUp Chief Operating Officer Anthony Vittone noted that 90% of the U.S. population lives within ten miles of a Walmart. "For every additional mile of delivery radius, the number of reachable households increases threefold or even fourfold," he said.

Consumer acceptance and usage habits need to be cultivated

As delivery activities increase, companies also need to address concerns from the communities where they operate. Vittone said some potential customers have "unknown fears" about drone delivery, which is common in the rollout of new technologies. To reduce uncertainty, employees are on-site at Walmart stores to answer public questions and conduct demonstration activities.

Drone companies also need to consider the potential disruption their operations may cause to the public. For example, Wing facednoisecomplaintsin Australia. In an email response to Supply Chain Dive, the company said that engaging with communities, answering questions, and gathering feedback before launching new services is a top priority.

"The reality is that drone delivery brings significant benefits—reducing traffic congestion, lowering emissions, expanding business opportunities, and enhancing consumer convenience—and these advantages become apparent once the service is deployed," Wing said.

If companies can win public support, the potential for drones to disrupt traditional last-mile delivery is evident. Their speed advantage is particularly prominent, allowing them to bypass ground traffic and reach customers directly. But Campbell questions which items, besides food and emergency medical supplies, need to be delivered within 15 to 30 minutes—consumer behavior may need to shift, as happened when FedEx introduced express package services or Amazon accelerated online order delivery times.

For drone delivery companies to achieve a disruptive industry position, they first need to significantly expand coverage and operational capabilities. Based on recent announcements, this process may arrive sooner than expected. "Things in this field rarely happen early, but I feel more optimistic than ever—this is finally becoming a reality," Campbell said.