A bane or boon of technologies : risks and benefits of drone delivery on last-mile operations

Abstract

Drones for logistics operations have emerged as a popular topic in logistics, offering numerous benefits and risks to the society and environment. While drones can have a significant impact on the surroundings, the environment and external factors can also influence drone delivery operations, resulting in a complex interplay. This article combines a comprehensive literature review and cocitation analysis, supplemented by practices, to explore the two-way interaction between drones and the environment. The benefits and risks of this interaction are also examined. A trend analysis is further conducted to generate insights regarding the stages of development in the literature. Combining findings from the reviewed literature and practices, we propose the novel 3R framework to guide future drone delivery adoption in practical operations. This framework highlights the importance of investigating drone delivery models and their respective risks that should be mitigated. Finally, a future research agenda is proposed to inspire further explorations in this rapidly evolving field of last-mile operations. Managerial Relevance Statement—In the recent decade, the fast development of drone technology has reshaped the last-mile delivery operations due to its superior reachability and sustainability. Several giant companies have successfully integrated the drone technology into their last-mile operations, like Amazon and UPS, in a variety of industries. Our study has identified the benefits of drone last-mile deliveries, including pollution control (less carbon emissions), societal and psychological impacts (as consumers trust that companies using drones are acting sustainably), and economic development (as drones can promote economic democratization and improve accessibility to essential products or services in rural and underdeveloped areas). These findings can assist in the decision making for engineering managers who plan to introduce this new technology in their business modes, by figuring out whether this new technology suits their organizational goals. Despite the merits and increasing popularity, drones face a list of operations challenges that may hinder their efficient applications in the real world and dampen their practical values. By exploring the interplay between drones and the last-mile logistics environment, we also identify the potential risks for the drone application in last-mile deliveries, such as regulatory restrictions, adverse weather conditions, service agility, disruption to the labor market, inherent limitations (like payload, flight range, battery capacity), and social trust building (safety and privacy concerns of the public), which should be carefully evaluated and considered by companies that aim to introduce this new technology. By further analyzing the four main drone last-mile operational models based on the real practice of four world-leading companies (Amazon, FedEx, UPS, and Walmart), we provide important insights into the practical challenges and opportunities of drone delivery implementation, which can be referenced by other small or medium sized companies in both developed and developing economies. Based on our findings derived from both the literature review and practice analysis, we further propose a 3R framework to offer important managerial and practical insights for decision makers to compare their needs with the impacts associated with each drone operational model, identify the best alignment, and prioritize specific impacts. It is believed that by following the three steps (i.e., reveal, reduce, and reward) as instructed by the 3R framework, engineering managers in the last-mile logistics industry can improve their decision making in the transformation from traditional operations into the drone-facilitated next-generation operations.