A cost-efficiency analysis of drones in revolutionizing intra-city express services

Abstract

Drones have emerged as promising transportation tools in the urban logistics industry, particularly for short-distance transportation, such as last-mile delivery and food delivery. With advancements in coverage range and payload capacity, medium drones are poised to open up a medium-range urban logistics market known as intra-city express service (ICES). This study aims to examine the benefits of deploying drones into ICES by comparing the costs and efficiency of current truck-based ICES with four potential drone-based modes: station-to-station (S-S), vertiport-to-vertiport (V-V), station-to-hub-to-station (S-H-S, with hub denoting distribution center), and vertiport-to-hub-to-vertiport (V-H-V). Based on the dataset from a courier in China, a thorough examination of the cost- and time-saving advantages associated with drone-based modes is conducted. The results demonstrate the promising potential of deploying drones in the ICES industry to save costs and enhance efficiency, but these benefits are highly dependent on the operational mode of drones. Among the proposed modes, none emerges as a dominant option across both metrics. Nevertheless, the V-V and V-H-V stand out as non-dominant modes, with V-V offering the highest time efficiency and V-H-V proving to be the most cost-efficient. Vertiports and distribution centers are crucial facilities for achieving cost reduction as they facilitate parcel consolidation. These facilities aggregate demands and strong the flow rate However, distribution centers may not necessarily enhance efficiency since they can introduce additional waiting time and detours. Overall, the managerial insights and policy implications proposed in this study demonstrate significant potential for the utilization of drones in intra-city express service.