Director, National Valuation
t: +44 207 182 2663 Ben.Thomas@cbre.com
Associate Director, National Valuation
t: +44 207 182 2683 Judy.Zhu@cbre.com
In the last post “Drones are here”, we explored the potential use of drones in the logistics industry, both inside and outside the warehouse. In this post, we are going to look at some of the potential impacts that drones will bring to the industry.
A typical delivery chain sees goods travel from a manufacturer – to a national distribution centre – to a regional distribution centre – couriered by last-mile transportation – then eventually reach the consumer. In this system, various transportation types are involved, such as vehicles on road, ships and railways. Access to these transportation networks is an important decision-making factor on choosing the locations of warehouses (which we previously considered, click here to read).
However, taking drone delivery into consideration, the need to have a warehouse close to strong infrastructure could be less restricted. Most commercial drones developed at the moment are suitable for last-mile delivery, with small-size delivery drones able to carry goods of up to 5lb in weight for a 10-mile trip on average. These drones could allow for small warehouses to be located in rural areas where homes are spread over a wide area with rural road access. This will expand the delivery coverage, decrease the delivery time and save on truck fuel and wear.
Drones don’t just have to operate in isolation, but can work collaboratively with other vehicles. For example, small-size delivery drones could be dispatched from an HGV or a larger-size drones. Current technology allows for a heavy-lifting drone to lift and move a payload of up to 30kg. As technology improves, these larger drones could act as airborne mobile distribution centres, which could possibly replace the current small local warehouses or even regional centres. Indeed, there is the potential for HGVs to be mobile centres currently. This system can bring flexibility to delivery as we’ve never experienced before, with the routes of the hub vehicles changing based on real-time demand. If adopting this system brings down the overall cost of delivery, the amount of logistics warehousing required could also reduce.
With drones included in the delivery system, access to a warehouse will no longer be limited to ground level as drones can utilise the vertical space. Inside a warehouse, a multi-level conveying system could connect the picking area to drone loading docks, where small size packages would be collected by drones before they head out to deliver. Another possibility could remove the conveying system altogether with picking robots working in tandem with drones. Robots load packages directly to the drones which then fly directly from the picking area to their delivery destinations.
Specific Drone Maintenance Units will be required for the drones to be charged and fixed. This area will likely require less land space, since drones can be placed at multiple levels.
Use of drones in delivery will not only change the design of warehousing, but also the definition of it. As we mentioned above, in the future HGVs and drones could be used as mobile warehouse hubs. This, in turn, may possibly extend the definition of a warehouse beyond immovable assets.
At present, the longest distance a delivery drone can travel with package is 161 miles, but how far could the distance be a few years down the line? Delivery companies are testing to stretch drone payloads to 1 ton, and it begs the question of how this will impact the logistics industry. None of us have the answers but there is one thing for sure: placing drones into overall logistics network has the potential to bring unexpected flexibility and possibility.
In the next post, we are going to explore the potential challenges for the logistics industry when it comes to adopting drones.
If you are interested in more details of this report or our other logistics reports, please contact Ben Thomas, Director of CBRE National Valuation – Logistics & Distribution, or Judy Zhu, Associate Director of CBRE National Valuation.