The e-commerce industry is booming. In 2022, US-based sales generated approximately $905 billion in revenue. By 2027, the market is expected to exceed $1.7 trillion dollars. As orders increase, so do the demands on postal service providers.
To compensate, some providers are exploring new ways to streamline and expedite transportation processes. For example, in 2020 FedEx began trialing Elroy Air’s autonomous air cargo system to automate moving shipments between sorting stations.
In this article, we’ll analyze what this partnership means for FedEx and Elroy Air, as well as the use of drones in e-commerce moving forward.
FedEx and Elroy Air: The Need for Speed
In early 2022, Elroy Air unveiled its Chaparral, an autonomous, hybrid-electric aircraft. Chaparral contains an aerial cargo system that can fly 300 to 500 pounds in cargo for up to 300 miles. In addition, the Chaparral can carry out longer-range trips without the demand for supporting infrastructure like airports or charging stations.
Elroy Air’s Vice President of Business Development and Strategy, Kofi Asante, stated: “When you’re not limited by challenging infrastructure, traffic, or airports, logistics can reach more people, faster than ever before.” Together, FedEx and Elroy plan to explore this new drone-powered future. Testing is expected to take place in 2023.
The COVID pandemic accelerated the growth of the e-commerce market, and it continues to trend upward. Rising online shopping and digital transactions have meant that domestic and international shipping giants have flourished in recent years. FedEx is a prime example of this. The company’s revenue has steadily increased from 2017 to now, reaching $93.51 billion as of May 2022.
As revenue increases, so does the need for workflow optimization throughout every stage of the supply chain. This explains why FedEx turned to automation and drones to expedite deliveries.
Elroy Air: Flying to New Heights in the Drone Space
Elroy Air is a US-based logistics company specializing in robotics and air transportation. Throughout the past two years, the company has received more than $100 million in funding. Backed by these investments, Elroy Air launched its Chaparral, which puts it at a competitive advantage, compared to other startups in the field.
Look at the graph below; it illustrates Elroy Air’s strength of innovation. You’ll notice that the company leads in both patents acquired and cited. This may be an indicator as to why FedEx has decided to partner with this flourishing startup.
With more businesses looking to incorporate autonomy and drone usage into their processes, the overall value of the market is expected to increase substantially. Currently sitting at $35.67 billion, the drone market is predicted to more than double by 2025.
Our two cents? This is a market you’ll want to keep an eye on.
Closing Thoughts: Same Day Deliveries Are a Likely Future Scenario
Similar to Elroy Air’s mission statement to “enable same-day shipping to every person on the planet,” FedEx also plans to streamline processes via cutting-edge technology, like autonomous drones. The continued alignment between these two companies may alter how we get and receive packages.
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