Drone Logistics Market Size, Share, Trends, Growth Report & Forecast 2022-2028

Industry Prospective:

The global drone logistics market size was worth around USD 8.25 billion in 2021 and is predicted to grow to around USD 53 billion by 2028 with a compound annual growth rate (CAGR) of roughly 20.75% between 2022 and 2028. The report analyzes the global drone logistics market drivers, restraints/challenges, and the effect they have on the demands during the projection period. In addition, the report explores emerging opportunities in the drone logistics market.

Drone Logistics Market: Overview

A drone is also called an unmanned aerial vehicle (UAV) and refers to any aircraft that does not require a human pilot. There is no space on a drone for any passenger. Drones fall under the category of unmanned aircraft systems (UAS). These devices are operated from the ground using controllers and communications systems.

Request Free Sample

Drones came into existence in the 20th century and were mainly developed by military personnel for national security; however, over time multiple non-military grade drones have come into existence with varying uses for recreational and logistics purposes. This was possible because the cost of manufacturing drones decreased and access to product awareness increased. Logistics refers to the transport of goods from one point to another for business purposes. Drone logistics requires the use of drones for the movement of products.

Drone logistics gained more momentum during Covid-19 especially in 2020 when social distancing was mandatory and the population was asked to avoid unnecessary human touch. However, this system has been in existence since even before 2014, a Mumbai-based restaurant delivered pizzas to its customers without any glitches.

 Key Insights 

• As per the analysis shared by our research analyst, the global drone logistics market is estimated to grow annually at a CAGR of around 20.75% over the forecast period (2022-2028)
• In terms of revenue, the global drone logistics market size was valued at around USD 8.25 billion in 2021 and is projected to reach USD 53 billion, by 2028. Due to a variety of driving factors, the market is predicted to rise at a significant rate
• Based on application type segmentation, warehouse & storage management was predicted to show maximum market share in the year 2021
• Based on the end-user segmentation, the commercial was the leading end-user in 2021
• On the basis of region, North America was the leading revenue generator in 2021

Drone Logistics Market: Growth Drivers

Growing traffic to drive more businesses to adopt drone technology

The global drone logistics market is projected to grow owing to the increasing traffic that can be witnessed across the globe. The growing population, increasing use of private vehicles for transport, rising automobile industry, and change in lifestyle with an increased standard of living are some of the factors why time spent in traffic has been on a constant rise in the last couple of years. In 2010, China witnessed the worst case of traffic jams that lasted more than 12 days.

The traffic route was spread across 100 kilometers and it resulted in increased food and water prices. Such incidents have become a common sight in the modern world and businesses are suffering due to delays in package delivery. To adopt innovative ways many firms have started investing in drone technology to help them carry out their businesses. As per a 2019 report, traffic congestion cost the US economy more than USD 85 million in losses.

Drone Logistics Market: Restraints

High cost to restrict market expansion

The global drone logistics market is projected to face growth restrictions owing to the high cost of drones and increased expenses when operating the technology. Although the systems have become comparatively more affordable, they are still out of reach for many businesses, since bulk buying can increase the total associated capital. A high-technology drone can cost between USD 15000 to USD 16000 making buying in numbers a difficult choice for mid or small-sized firms. However, growing research and development for the manufacturing of affordable drones is underway and may soon become a well-accepted reality.

Drone Logistics Market: Opportunities

Positive outlook toward drone logistics to create more growth opportunities

Many experts are regarding drones as the future of logistics due to several benefits associated with the use of the technology. Not only do drones help in increasing the transportation route, but since they can cover more areas, the technology is also considered environment-friendly. Drones do not operate on any kind of fuel but on batteries, which leads to lesser emission of carbon dioxide which is a by-product of using fossil-fuel-powered vehicles for transportation. Transportation is considered one of the top industries that cause air pollution with over 26% of the greenhouse gasses in the United States. 

Drone Logistics Market: Challenges

Low payload capacity to challenge the market expansion

Even the most advanced drones have relatively lower payload capacity as compared to traditional ways of transporting products. This is one of the major challenges the global drone logistics market faces as it heavily restricts the kind of products that can be transferred from one point to another. For instance, beginner-level drones cannot lift anything more than 300 grams of added weight. Only military-grade drones have the capacity of lifting around 500 kilograms of payload but they are too expensive for commercial purposes.

Drone Logistics Market: Segmentation

The global drone logistics market is segmented based on application, component, end-user, and region

Based on application, the global market segments are transportation management, and warehouse & storage management. In 2021, the global market was dominated by the warehouse & storage management segment owing to the use of drones to manage inventories in large production facilities. Since a couple of drones can prove to be effective in managing warehouses, more businesses were investing in small-scale drones, However, the transportation management segment may grow at a high CAGR of 25% during the forecast period owing to growing awareness amongst organizations and product innovation undertaken by drone manufacturers to cater to the needs of all consumer types.

Based on end-user, the global market is divided into military and commercial with the latter generating the highest revenue as compared to military applications. During the projection period, it may grow at a CAGR of 23%. Military-grade drones are expensive and most developing or under-developed economies may not be able to purchase drones in bulk. However, with the increasing investments witnessed for national security, segmental growth may witness a higher rate.

Recent Developments:

• In March 2022, Skye Air Mobility, a Delhi-based provider of drone logistic services, unveiled Artemis, a drone developed for long-range services. The new launch can carry a payload of up to 6 kilograms for a distance of 100 kilometers.
• In October 2020, the Indian Army stepped up its efforts in a bid to procure 363 drones for national security reasons across the China border

Drone Logistics Market Report Scope:

To know more about this report, request a sample copy.

Drone Logistics Market: Regional Analysis

North America to witness surging growth during the projection period

The global drone logistics market is projected to witness the highest CAGR in North America. The US is expected to lead with the highest regional market share owing to the advanced economy and technology-driven approach of businesses. The US has been at the forefront of adopting advanced systems to automate as many processes as possible.

This approach has allowed the country to become a superpower and is one of the major reasons the country has been able to influence the rest of the world. Skydio, the largest producer of drones, is located in the US, and in 2021 it crossed the USD 1 billion mark in value. The high spending by the military division on drones for various logistical purposes is another contributing factor to the regional market growth. In the fiscal year 2017, the military division of the US government allocated more than 4.61 billion only for drone-related expenses.

Drone Logistics Market: Competitive Analysis

The global drone logistics market is dominated by players like Hardis Group, PINC Solutions, Flytrex Inc., United Parcel Service of America, Inc., Deutsche Post DHL Group Amazon.com, Inc., Zipline International Inc., FedEx Corporation, Workhorse Group Incorporated, Infinium Robotics, Wingcopter GmbH, and Drone Delivery Canada to name a few.

Request Free Sample

The global drone logistics market is segmented based as follows:

By Application

• Transportation Management
• Warehouse & Storage Management

By Component

• Software
• Hardware
• Services

By End-User

• Military
• Commercial

By Region

• North America
  • The U.S.
  • Canada
• Europe
  • France 
  • The UK
  • Spain
  • Germany
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Southeast Asia
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • GCC
  • South Africa
  • Rest of Middle East & Africa