Are drones going to hurt my FedEx routes? Is FedEx focusing on drones? How will Amazon delivery drones impact my investment?
We get these questions and similar ones every week, if not multiple times per week.
Drones are sexy. We get it. The idea of drone delivery feels like the future. Every time Amazon says something about drone delivery it splashes across all of the major news outlets. For example, the Federal Aviation Administration (FAA) recently certified Amazon’s drone division to operate as an airline.
Drones Cannot Deliver the Type of Packages FedEx Ground Delivers
As fun to think about as drone delivery is, it’s not a realistic mode of transportation for the type of packages FedEx Ground delivers.
Each time we field worried inquiries about drone competition we encourage individuals to walk through a FedEx terminal and give it more thought. When you walk through a FedEx terminal you realize the size of many FedEx packages is wildly incompatible with drone delivery.
FedEx Ground delivers trampolines, couches, sets of tires, and more. In fact, FedEx is known for delivering “incompatible packages”—packages that do not fit onto a 4-foot wide conveyor belt. FedEx Ground is the industry leader in incompatible packages and it is a substantial portion of their business.
Drones Cannot Cover the Amount of Area FedEx Ground Covers
Not only is drone delivery a poor solution for incompatible packages, the mechanics of drone delivery are complicated for most packages.
A FedEx Ground terminal typically covers a radius of 150 air miles. When you think about drones making a 300 mile round trip to deliver one package on the far end of that radius it seems improbable. Drones making those types of trips would experience significant battery life issues. Plus, they would frequently experience conflict with other aircrafts.
Drones Make Excellent Skeet Shooting for Some Enthusiasts
Lastly, let’s not forget how uncomfortable the idea of a drone flying into a residential area might make some individuals. Here in Tennessee, we can imagine that drones would make fantastic skeet shooting for some sporting enthusiasts.
It will be a long time before drones genuinely feel familiar enough for regular deliveries.
If you have questions about Industry Changes + Threats, we’d love to answer them for you. We’re rooted in this industry and keep our fingers on the pulse of it. Connect with our team to ask more questions.