Drone delivery

Today, drone delivery is one of the key areas that both large UAV manufacturers and companies specializing in the delivery of goods around the world are working on.

Top Developers

To date, four American companies developing commercial drones for delivering goods are among the first successful ones:

Amazon

Wing Aviation

Uber Technologies

UPS & Matternet

Achievements of companies

Although there are many legal obstacles that still need to be overcome. For the United States, 2020 marked the beginning of a series of drone delivery trials:

Wing Aviation is known to have partnered with FedEx and Walgreens to test deliveries this month with their drone in Christiansburg, Virginia.

Uber said it has already begun testing drone delivery in San Diego, California.

Amazon did not specify where it will test its drones, but back in June the company said it would begin delivering packages to consumers using UAVs “within the next few months.”

UPS & Matternet recently announced that it is fully certified by the FAA, allowing it to operate as an unmanned airline using Matternet’s unmanned aerial vehicle technology to expand the delivery of urgent items on demand across the country.

What are the prospects?

According to industry experts, it takes quite a long time to launch a large-scale drone delivery service. Nonetheless, commercial drone sales are expected to skyrocket. The FAA estimates that this number will grow from 600,000 (as of 2016) to approximately 2.7 million in 2020.

Drones

Amazon

Amazon has been testing its drones in Cambridge, England since 2016. It is known that before settling on the last hexagonal configuration, the developers had to consider about 50,000 concepts. The Amazon drone is a pretty interesting design with a hexagonal shape and shields around the six rotors. An Amazon drone lands to deliver the package. Takeoff and landing are carried out vertically. To carry out high-speed flight, the drone switches from horizontal to semi-horizontal mode. The drone can make a 20-kilometer round trip, and it promises delivery within 30 minutes. The drone uses machine learning algorithms in combination with an infrared sensor system to detect wires, birds and buildings. The company programs its drones for different scenarios so that they know what to do when, for example, they arrive at a delivery location.

Wing Aviation

The design of the Wings Aviation drone is even more unusual. To implement vertical takeoff and landing, their drone is equipped with 12 small propellers. For horizontal flight at higher speeds, wings with two large propellers are provided. The Wing drone lowers the parcel using a cable, which excludes landing from the delivery process. Able to carry out delivery within 10 minutes at a distance of up to 19 kilometers.

Wing aviation has been testing its drones since 2014 in Australia. According to the Wall Street Journal, the company has conducted more than 80,000 tests. As previously mentioned, Wing Aviation is partnering with FedEx and Walgreens to deliver small packages to Christiansburg, Virginia. The developer does not inform by means of what technologies the definition and overflight of obstacles is carried out.

Uber Technologies

The Uber drone has received a traditional configuration. This is a hexacopter, which is actually a modified AR200 drone from AirRobot. In May this year, Uber teamed up with McDonald’s to test drone delivery near the University of California, San Diego. The company says residents in the vicinity of the university will soon be able to order drone-delivered food from a limited number of local restaurants via the Uber Eats app. Uber promises delivery in an average of 7 minutes for a distance of up to 4.8 kilometers. The developer does not inform by means of what technologies the definition and overflight of obstacles is carried out.

UPS & Matternet

The Matternet M2 Drone standalone platform includes the Matternet M2 drone itself, the Matternet control station and the Matternet cloud platform, through which it interacts with Matternet networks. The drone received a classic quadcopter configuration. The potential of the platform allows you to automatically receive customer requests, generate routes, monitor and manage all operating Matternet assets. The developer presents its platform as a service for healthcare, e-commerce and logistics organizations. The M2 drone is authorized by the Swiss Aviation Authority for full-fledged logistics operations over cities. Designed for the carriage of goods weighing up to 2 kg or 4 liters at a distance of up to 20 km, in a 24/7/365 operation mode.

Do you think this delivery method will become popular?

The Toyota Way

Toyota is one of the world leaders in the automotive market and the company is very successful both in terms of profitability and market capitalization. Despite the fact that Tesla has recently appeared, nevertheless, for many years Toyota remains the standard of quality and Toyota’s business is built on very clear and principles known to scientists for a long time.

The authors of the book very clearly show that in fact there is no the mysteries of the Toyota company itself are simply very deep and subtle effective management that can be extrapolated and other businesses. in particular such major American companies like Boeing, General Electric, Caterpillar have been using Toyota production principles.

It is possible to apply the principles even for small industries, it is only important to understand and want to apply it in practice. The book just describes development and prosperity of the Toyota company which is based on 14 basic principles and the author of the book reveals to us the very effective formula for success, the very philosophy that must be applied in the long run in every business for increasing its efficiency.

What is the basis?

There is such a Japanese word – Kaizen. Which denotes the pursuit of excellence, continuous learning of new things and readiness to change. Kaizen’s combined with Toyota’s respect for its personnel and gives the very same success, this is the main strategy of Toyota in the organization production is based on the so-called integral production system TPS (Toyota Production System), the principles of which form the basis of lean production (Lean management, Lean production, Lean manufacturing), this can include, for example, stopping a conveyor to avoid overproduction, creating a stock of products, supporting company employees, using manual assembly, and respecting workers.

Another important rule is the maximum disclosure of creativity.

Toyota employees and that is why the staff is constantly trained and improve because Toyota comes from the fact that success is laid in fact, people, not technologies, and thus the company, as it were, consolidates it’s dependence on labor. It would seem that this is not a trend now, it would seem everything they think that a successful business is maximum robotization, but it’s not there it was said in Toyota.

And here is an example that the 14 principles described in the book can be extrapolated to other businesses.

In the 80s, Toyota organized a joint project with General Motors outside of japan and started training employees internal principles of the system and after a few years General Motors began to produce cars at such a rate that it overtook all other General Motors factories in productivity.

TRENDS THAT WILL CHANGE THE LOGISTICS OF THE FUTURE

GREEN LOGISTICS

The high mobility and speed of delivery of goods, which is provided by the global transport network, undoubtedly have a detrimental effect on the environment. 

Electric vehicles, AI-based software that calculates routes with the lowest emission levels, and resource-efficient packaging will help minimize the environmental impact of logistics.

BLOCKCHAIN ​​TECHNOLOGIES

Blockchain will provide logistics companies with a seamless digital network. The technology will enable manufacturers, suppliers, customers, auditors, warehouse managers and others in the supply chain to create a transparent and efficient system for recording transactions, tracking assets and managing documents.

The security of the supply chain will be increased, fraudulent activities will be minimized due to complete transparency, and the absence of paperwork will reduce the risk of errors.

AUTOMATION OF LOGISTICS AND INTERNET OF THINGS (IOT)

These techniques are transforming the global supply chain market. IoT is communication between devices that are connected to each other by small sensors of different types.

IoT will help eliminate shipping delays, operator errors, and cargo loss and theft. In the near future, supply chain management is expected to use IoT and edge computing to generate automated data in real time. For example, to predict equipment failures and reduce crash risks using visual and acoustic sensors in maritime transport.

IMPLEMENTATION OF COLLABORATIVE ROBOTS (COBOTS)

Cobots will be needed to efficiently perform delivery order processing services. They are equipped with a long-range and visibility system and can quickly unload trucks, move boxes and pallets.

Amazon is already developing robots for warehouse operations, including functions such as packing, storing, and order picking.

DIGITAL TWINS TECHNOLOGY

Structural parts wear out and are replaced, and until recently, their computer models could not display this. With the advent of digital twin technology, everything has changed. Now the physical and digital worlds can be so synchronized that it will allow interacting with the digital model of a physical object as with its physical counterpart.

The possibilities for using digital twins in logistics are enormous. In the international transport sector, this technology can collect product and packaging data and use it to identify deficiencies and errors.

Warehouses and businesses can use “digital twins” to create accurate 3D models of their centers, experimenting with the introduction of new equipment. And delivery networks are designed to provide real-time information about cargo, improve delivery times, and help autonomous vehicles along their routes.

Amazon 3rd party FBA sellers face new inventory limitations

FBA (Fulfillment by Amazon) is the sale of goods from Amazon warehouses.

Amazon has introduced new restrictions on the supply of goods. Starting August 16 2020, sellers can send up to 200 units of a product with the new ASIN (An Amazon Standard Identification Number is a 10-character alphanumeric unique identifier assigned by Amazon.com and its partners for product identification within the Amazon organization) to Amazon.

The main reason for this limitation is the sharply increased demand for goods sold online in the past few months.

Amazon’s new policy affects all sellers planning a new product launch.

Initially, it was assumed that the restrictions will last until December 31, 2020. However, as of March 10, 2021, the limit of 200 units for the supply of new goods is still in force.

At the same time, Amazon relaxed the requirements for the allowable volume of goods in its warehouses, lowering the IPI (Inventory Performance Index) threshold to 450.

Previously, Amazon could restrict replenishment of inventory only if the IPI (Inventory Performance Index) fell below the acceptable level. Moreover, this concerned only the volume of goods in the warehouse, and not the number of units.

The main problem sellers face at the moment is the minimum order size. It is unprofitable for factories to produce batches of 200 units of goods, so the unit price will be several orders of magnitude higher.

What to do in this situation?

Pay the supplier the cost of the entire shipment, but ask to send only 200 units first.

This will not be a problem for most vendors. Based on the results of the sales of the first batch, you can optimize the listing and then send the bulk.

Use the services of independent logistics companies (3PL – third-party logistics company).

An external contractor will take over all the storage and shipping tasks for Amazon.

This will eliminate the need to reduce the batch size: you can send 200 units directly to Amazon warehouses, and the rest to the contractor’s warehouse.

This way, you will be able to replenish stock in Amazon warehouses as they run out.

Is there a way to get rid of the new restrictions?

Amazon does not provide an answer to this question. But there is reason to believe that the limit could be increased, provided that the product sells well.

Also, Amazon may lift restrictions after 30 new planned fulfillment centers open.

Ukrainian delivery service

I would like to tell you about the delivery service in Ukraine, which simplified life not only for private clients, but also gave a huge impetus to the development of e-commerce and not only. I will also give a small comparison with the Spanish postal service “Correos” which is 295 years older than the “Nova Poshta”.

The history of “Nova Poshta” began in February 2001, when university friends Vyacheslav Klimov and Vladimir Popereshnyuk decided to found a common business. Both were 25 years old. Vladimir’s small confectionery business helped to choose a market niche. He was just looking for ways to transport goods from Poltava to Ukraine. This is how young entrepreneurs got the idea to offer Ukrainians a new service – fast and convenient delivery.

The start-up capital of “Nova Poshta” was $ 7,000, and the team initially included 7 people.

Within the framework of the company, several development vectors have been formed, among which is the international direction (“Nova Poshta Global”). In 2014, “Nova Poshta” opened representative offices in Georgia and Moldova, and a year later entered the international delivery market.

For Ukrainians, “Nova Poshta” has ceased to be just a delivery service. The new corporate structure is a group of companies that provide clients with a range of logistics and related services. Today, in the branches you can not only receive / send a parcel or cargo and order targeted delivery, but also make an electronic money transfer through the ForPost cash desks, and order a fulfillment service.

“Nova Poshta”, along with Privat24 and OLX, is one of the three pillars on which practically all e-commerce in Ukraine rests upon. Today, “Nova Poshta” already processes 14 million parcels per month, and in order to cope with the constant growth in the number of parcels, it needs modern sorting terminals (now the company has 40 of them). The new terminal called KIT (Kiev Innovation Terminal) cost the company 15 million euros and was opened last year. Now they are preparing to launch new queues of the terminal, which will further increase its throughput. According to the company’s employees, their goal is to process up to a million parcels per day at KIT. This is the level of the largest terminals in the world.

In front of the entrance to the terminal, Slavuta’s car is installed on a pedestal. An interesting story is connected with it. This is the very first car of “Nova Poshta”, which at first played the role of both a truck and a representative vehicle. Today, this car is alive, daily reminder of how you can create a huge logistics company out of nothing. In the era of globalization and the total Internet, logistics is a real circulatory system of the economy.

The terminal uses equipment from Vanderlande, the world leader in the automation of logistics processes. Its equipment is used in many airports around the world.

Now the terminal has 199 gates with ramps for receiving trucks. The next step is the construction of new lines capable of increasing capacities and serving the constantly growing needs of Ukrainians in sending parcels. For the last 7 years, the company has been growing by 30-50% annually.

Thanks to the fast and relatively affordable delivery in Ukraine, a huge number of “Instagram shops” have appeared, which undoubtedly positively influenced the development of small businesses in the country.

Now I will make a small comparison between “Nova Poshta” and the “Correos”.

For example, let’s imagine that we need to send a box weighing 5kg and measuring 20x30x50 cm between two major cities.

The parcel will be delivered from Dnipro to Lviv (990 km) the next day, if the parcel is sent before 12:00. If you send it from 12:00 to 18:00, the package will arrive in two days.

Spanish service “Correos” Delivers a parcel of the same size and weight from Bilbao to Seville (930 km) in 3 days. In order for the parcel to be delivered within 24 hours, you must select a separate more expensive tariff.

I did not find information about the insurance of the parcel in Spain, but Nova Poshta offers insurance for the parcel of any amount. To do this, you must indicate the cost of the parcel and the calculator will show the cost of insurance. For example, for just 0.10 cents, the 30 euros valued parcel will be insured. And if the parcel is lost or damaged, the full cost will be refunded.

There is no Amazon in Ukraine. But with the help of “Nova Poshta”, you can order any product from the USA or Europe. “Nova Poshta” provides addresses of their branches in Europe or USA and when making an order you put their provided address, then they deliver your parcel to Ukraine.

And now some statistics:

In Spain, which has an area of ​​505 990 km², 2400 branches of “Correos” and in Ukraine, which occupies 603 628 km², 7200 branches of “Nova Poshta”.

CORREOS Group has distributed over 196.5 million parcels in 2019. Of these, CORREOS has distributed 129.32 million parcels.

During the same year, “Nova Poshta” delivered 212 million parcels.

5 examples of the black swan theory

Today we are going to find out what the black swan theory means, how it affects the economy and the society overall and several examples of how the black swan events have changed the words.

The black swan theory or theory of black swan events is a metaphor that describes an events like the economic downturn and pandemic that comes as a surprise, has a major effect, and often change the direction of politics, the economy and business, and influence the course of history. Even though,the black swan events are often inappropriately rationalised after the fact with the benefit of hindsight.

• The Black Pestilence  in the 1300s destroyed the feudal system in Europe, replacing it with more modern hiring relationships. Only three centuries later, the deep economic crisis caused by the Hundred Years War between England and France led to a new leap of innovation that radically modernized agriculture.

• SARS pandemic in 2002-2004 sped up the growth of the small company Alibaba, which traded over the Internet. Now it is a retail leader in Asia. This growth was fueled by anxiety and panic of people who tried to avoid contact with each other as much as possible – almost the same as what we see now.

• The 2008 financial crisis also contributed to new technologies. In Western countries, companies like Airbnb and Uber instantly became popular, because in times of crisis, people tried to save on everything: arrange joint living and group for trips.

• The video game industry has taken the trend and has also dramatically changed course. In 2011, thanks to Nexon in Asia and King in the West, free games with in-game purchases began to develop rapidly.

• With the advent of Covid-19, we already see the first signs of how consumer and company behavior is changing. Airline profits are falling due to travel denials, stocks of drugs, cereals and toilet paper are running out in retail chains, and work at home is becoming the norm.

Some of these changes are a direct but short-term reaction to the crisis. All this will return to normal after defeating the coronavirus. However, some changes will remain, creating the basis for long-term innovation, and will dictate the business environment for many years to come.

Interesting fact: in the opposite to my personal opinion, Nassim Nicholas Taleb, the inventor of the “black swan” definition considers black swans to be an unforeseen events that have significant consequences for the economy. At his point of view,the COVID pandemic could have been prevented, so it may be called a white swan, rather a black one.

Three types of innovations that are likely to continue after the victory over the COVID19

The supply chains will integrate into flexible and resilient ecosystems

Because of the coronavirus, China had to cut back on production and supply, which triggered the chain reaction we may see today. This is a weak point of the existing global scheme.

There is a need in deliveries across countries and suppliers while supporting cost savings through increased production and traceability. To do this, there is a need of global platforms with sophisticated technologies – 5G, robotics,  blockchain (a continuous sequential chain of blocks containing information, built according to certain rules.) These technologies will help to establish a contact between customers and numerous reliable suppliers in a common network.

As the result, this will cause increased demand for unmanned vehicles and drones, as drivers will not be enough to completely cover the needs of online trading. Traditional B2B platforms like Amazon and Alibaba are likely to become leaders in this area and will begin to fight for ownership of such an ecosystem in the next ten years.

Smart cities will become a commonness

The coronavirus pandemic caused officials to work fast. China broke all records by building a huge hospital in Wuhan with an area of ​​almost 60 thousand square meters in just 10 days! South Korea conducted speed tests for 200 thousand citizens and used smartphones to track the movements of infected people to quickly alert healthy people about such movements.

All these measures could be further improved if there were more “smart” cities in the world. According to a recent study by the University of Glasgow, of the 5,500 major cities, only 27 have this level of technological development.

The authorities will undoubtedly take this tactic into service, and investments will shift towards smart cities. In the event of new crises, it will become important to carefully monitor and maintain order. Mostly, smart governments, specialized companies like Cisco, Microsoft and Siemens, as well as digital city startups across Europe and the USA will benefit from this.

Psychological assistance using digital technology

Coronavirus will accelerate the transition to “remote” and online training. It’s harder to figure out what will happen if most people need to work together remotely and indefinitely.

It is possible that such a transition will begin to undermine the morale, productivity and psychological health of employees around the world, so companies need to prepare now.

IT companies such as Github and Automattic, that use the remote work model could share their experiences and invent appropriate technologies to help people all over the world.

For individuals working remotely, the prospects are also not so bad. Several startups are already providing psychological assistance (such as Braive and Moment Pebble) so they can also share help and solve the isolation problem. There are networking programs such as Ripple that will help with mentoring and development – and this becomes more relevant than ever if you work remotely.

COVID19 impact on Logistics processes

Coronavirus has brought enormous losses to the global economy as a whole and to almost all industries in particular. The transport and logistics sector was the one of the first fields to feel he loses. First of all, most logistics providers were affected, especially the ones who worked with export and import to / from China.

“Air cargo to China makes up 38% of our company’s total exports. In imports, this figure is 40%, – says Stefan Haltmeier, CEO of German Quick Cargo Service. – Up to 90% of our exports to China are paid in this country. Due to the unplanned long holidays, many banks are closed, and payments from China are delayed. We must continue to make advance payments, as the CASS IATA (cargo agents settlement system) billing system charges us for the previous transportation costs. It also negatively affected the cash flow of our company. ”

“The biggest problem for us today is that due to the late resumption of the factories in China, many batches of products must be delivered to the consumer as soon as possible. This forces us to change the vector of work, reducing the number of multimodal transportations in favor of increasing aviation, ” says Ken Hui, CEO of Chinese FANS TRANS.

Due to the fact that many airlines have suspended or reduced the number of flights to China and other countries (both passenger and cargo), the total carrying capacity of air transport in this direction has decreased, and there has been a disbalance between the supply and the demand, which “drives the Chinese market crazy.” Airlines increase tariffs every two to three days, and the waiting time for consignments can reach up to 7 days officially, and up to unlimited period as a reality.

Alibaba Logistic’s Decisions

 This is a blog about the world’s largest B2B online marketplace Alibaba, that is the part of the Chinese holding company Alibaba Group. I am sure you heard about Alibaba and maybe some of you even tried it out. It is a trading platform for buyers and suppliers to exchange variety of products and possibly complete a transaction directly between each other.

As a wholesaler, Alibaba offers both small items in large quantities and large items in small quantities.

Alibaba is offering discounts for buying in bulk. Most of Alibaba’s manufacturers make consumer products. Customers can find individual products for sale (usually higher-priced items), but the majority of offerings are cheaper bulk items.

In 2019 this Chinese e-commerce behemoth Alibaba invested 23.3 billion yuan ($3.3 billion) in logistics affiliate Cainiao in a move to strengthen its logistics operations, according to the South China Morning Post.

Alibaba’s latest investment brings its stake from 51% to 63%.  Alibaba’s investment will probably be used to develop new technologies and services in an effort to improve its existing smart logistics network, which already includes warehouse robotics, drones, high-speed scanners, and self-driving vehicles. 

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Alibaba found the logistics affiliate Cainiao since 2013 and in 2017 spent $807 million to acquire majority control of it. Alibaba’s decision to take further control of Cainiao is part of a growing trend of e-commerce giants bringing logistics operations in-house to bolster their services. 

You may check more information about Alibaba in general and some information about the response time, pricing policies, shipping standards and the money back guarantee at my video that you may also find on this blog.

Alibaba