The Wall Street Journal
By Brian Baskin and Liza Lin
May 22, 2017 3:30 a.m. ET
China’s Shaanxi province is famous for being the start of the Silk Road, an ancient trade network where silk and spices were transported by camel across the Asian continent.
Soon, the central Chinese province will be recognized for a different form of transport.
Chinese e-commerce provider JD.com said Monday it is developing heavy-duty drones capable of delivering payloads weighing one ton or more, which it plans to deploy in Shaanxi.
JD, China’s No. 2 e-commerce company after Alibaba Group Holding Ltd., in 2016 started delivering small packages via drone as a way to bring online orders to shoppers in remote rural villages. Its fleet of about 30 drones have already been bringing shipments to customers in the remote areas of Beijing, and in Sichuan, Jiangsu, Shaanxi and Guizhou provinces, which are home to more than 230 million people.
The larger drones would also ferry goods in the other direction. For example, farmers looking to reach far-off urban markets could quickly ship fruit and vegetables that would have expired on a longer journey by truck, said Josh Gartner, a JD spokesman.
E-commerce and logistics companies around the world are experimenting with drone delivery, but most are focused on moving small, high-value packages, such as electronics or medicine. Amazon.com Inc. made its first delivery to a customer in December, in rural England, but is limiting the service to items under five pounds. A United Parcel Service Inc. drone dropped off an inhaler to an island near Boston in September. Earlier in May, Airbus SE said it would start selling commercial drones in the U.S. for purposes such as monitoring crops and inspecting cellphone towers.
Efforts to launch large-scale drone service in the U.S. have run into regulatory roadblocks, with many of the technology’s proponents predicting they won’t see widespread use until at least 2020. Regulations are less of an issue in China, home to the world’s largest civilian drone maker and where commercial drones are already widely used in farming. Local governments have offered up their airspace for drones and helped fund research. An arm of Shaanxi’s government is covering part of the roughly $150 million JD plans to invest in the province, where the retailer will also locate the headquarters for its logistics operations.
Heavyweight drones have their own set of problems. Where a small drone can be launched from almost anywhere, larger models need dedicated landing pads. Big, heavy drones can also be noisier, making them unwelcome in residential neighborhoods. Their extra size and weight also raise the potential damage from a crash, requiring extra motors, backup flight control systems and other fail-safes.
“The larger the vehicle and the higher the potential risk to people or property, the more redundancy and reliability you need,” said Ben Marcus, chief executive of AirMap, which helps drone operators navigate airspace.
Giant military drones and other unmanned aircraft have been in use for decades, Mr. Marcus said, but it is only recently that companies have begun exploring their commercial use. However, the bulk of investment is going toward smaller drones because “last-mile” delivery to customers’ homes is usually the most expensive leg of the supply chain, he said.
In China, unauthorized drones have also caused flight delays in several cities this year, leading authorities to introduce tighter regulation.
JD’s chairman Richard Liu sees drones as a way to reach millions of potential customers outside China’s major cities, an enormous market where it competes fiercely with Alibaba. In one Chinese province, Mr. Liu said he plans to build 150 drone delivery sites within the next three years.
Delivery costs in Chinese cities are inexpensive, as order densities are high and labor costs are low. However, in the rural areas, shipments are fewer and the road infrastructure is less developed, making deliveries inefficient and costly. JD, which operates its own logistics network, first sends order parcels from its warehouses to delivery stations, where the drones pick them up and send them to villages for distribution.
Original article can be found here: https://www.wsj.com
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