Last mile delivery by drones: an estimation of viable market potential and access to citizens across European cities

Rapid technological developments in autonomous unmanned aerial vehicles (UAV or drones) and an evolving legislation may soon open the way for their large-scale implementation in the last mile delivery of products. The use of drones could drastically decrease labour costs and has been hyped as a potential disruptor to the parcel delivery industry. Online retailers and delivery companies such as Amazon, are already filing up patents for the development of multi-level fulfilment centres for unmanned aerial vehicles or drone-beehives that would allow the deployment of this technology within built environment. A substantial amount of research has been carried out in the last years on the potential use of drones for parcel delivery, principally in the area of logistic optimisation. However, little is known about the potential market and economic viability of such services in Europe. This paper presents a modelling framework using EU-wide high-resolution population and land-use data to estimate the potential optimal location of drone-beehives based on economic viability criterion. It estimates the potential number of EU28 citizens that could potentially benefit from last mile-drone delivery services under four scenarios. The performed analyses indicates that under the scenario considered as the most technologically realistic, up to 7% of EU citizens could get access to such services. When considering technological improvements scenarios, the share reaches 30%. Furthermore, results suggest that due to the differences in population and land-use patterns in the different Member States, the potential drone coverage across Europe could be very heterogeneous, with the UK, Germany, Italy and France appearing as the most likely countries where drone-beehives may have the most efficient development.