DC Velocity - May 2017

up steam. Drone demand is still driven by hobbyists flying small models of unmanned aircraft systems (UAS)—the government term for flying drones—with the market predicted to grow from about 1. 1 million vehicles in 2016 to more than 3. 5 million units by 2021, according to the agency’s “Aerospace Forecast – Fiscal Years 2017 to 2037.” But commercial drones—the type that would be used for logistics applications—are closing the gap. The commercial, non-hobbyist UAS fleet is forecast to grow from 42,000 at the end of 2016 to a conservative target of 442,000 aircraft by 2021 or a high-end target of 1. 6 million aircraft. That broad range of target estimates reflects uncertainty about the regulatory environment, the FAA says. The higher estimate would only apply if lawmakers decide to ease restrictions such as the rules that allow operation only during daytime hours and within the operator’s line of sight.

Loosen those regulations, Etris says, and the market could
explode. “The barriers to entry are far [lower] than most
people think,” he said. “It’s not terribly difficult to set one
of these up.”
Industry figures support the growth predictions. A recent
survey conducted by the trade group MHI across 1,100
manufacturing and supply leaders showed that the use of
driverless vehicles and drones (which were grouped togeth-
er for survey purposes) would nearly quadruple over the
next five years—going from just 8 percent of respondents
today to 31 percent. The study, titled “The 2017 MHI
Annual Industry Report—Next-Generation Supply Chains:
Digital, On-Demand, and Always-On,” also found that
more than half of the respondents ( 54 percent) believed
driverless cars and drones had the potential to transform
supply chains and create competitive advantage.
Vendors also see clear skies ahead for the wider adop-
tion of drones in logistics. Drone providers such as Pinc
Solutions, Verizon’s Skyward division, and Intelligent
Flying Machines Inc. (IFM) have seen a steady increase in
the number of warehouses that are looking to experiment
with drones. IFM, for example, says it can perform auto-
mated inventory counts for an entire warehouse within 20
minutes, ensuring accuracy by connecting the system to the
facility’s warehouse management software.

Between rising market demand, loosening government regulations, and a growing ecosystem of vendors, the case for deploying drones in the warehouse is building quickly. Experts like Evans’ Etris advise any company that operates DCs to keep an eye on trade shows and industry publications to keep up with changes in drone technology and regulation. If the forecasts are right, advances in those areas could unleash flocks of flying drones into a warehouse near you soon.

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