Drone Logistics and Transportation Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Drone Logistics and Transportation Market is segmented by Sector (Commercial and Military), Application (Retail and Logistics, Food, and Medical Supplies), and Geography (North America, Europe, Asia-Pacific, and Rest of World).

Market Snapshot

Drone Logistics and Transportation Market Overview
Study Period: 2018-2027
Base Year: 2021
Fastest Growing Market: Asia Pacific
Largest Market: North America
CAGR: >15 %

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Market Overview

The drone logistics and transportation market is projected to register a CAGR of over 15% during the forecast period (2021-2026).

The COVID-19 outbreak has proven to be a boon for the drone industry. To limit physical contact among people and disinfect facilities, drones are now being used for several innovative applications, including monitoring the body temperature of pedestrians at a transport hub. Drones have emerged as a viable option to conduct inspection missions in cities, towers, and factories, wherein they can easily identify people violating the imposed safety norms. As the world reeled from the imposed lockdown, drone deliveries skyrocketed as several critical medical supplies were delivered to health facilities without violating the norms of the lockdown.

The versatility of drones is one of the major factors driving the adoption of drones in a variety of industries. Drones have become critical to several industrial applications, which has resulted in enhanced investment in the drone ecosystem. Although the commercial drone industry is still young, it has begun to witness some consolidation activities and major investments from industrial conglomerates, chip companies, IT consulting firms, and major industrialists. This is fueled by big ideas and widespread awareness regarding the capabilities of drones. Over the years, investments in drone startups have grown strongly. It is estimated that in the last seven years, investments of about USD 2 billion have been attracted into the drone startups, including OEMs and related companies, in the supply chain. Moreover, with the market trends becoming clearer, both in terms of technology and the end-user, the investors have started focusing their investments on selected companies that seem to have higher growth potential. Drone delivery is one such area, which is showing promising growth. As a result, the delivery drone companies are experiencing a downpour of investments. For instance, the medical drone delivery company, Zipline, announced new funding that brought the company valuation to USD 1.2 billion. Another company, Wingtra, a vertical take-off and landing (VTOL) drone producer, announced another USD 10 million in venture funding. Such investments are projected to fuel the growth and expansion of the players, thereby making the market more competitive and boosting the R&D in various technologies related to delivery drones.

Scope of the Report

Drones are unmanned aerial vehicles (UAVs) of different sizes and payload capacities that are designed for specific purposes. Logistic drones are mainly designed in the rotor-wing configuration and are used for delivering critical equipment or goods to end users. The market study includes the use of drones or UAVs for transportation and logistics support. The market study is inclusive of the logistic drones used in both military and commercial sectors. The drone logistics and transportation market is segmented by sector, application, and geography. By sector, the market has been segmented into commercial and military. By application, the market has been segmented into retail and logistics, food, and medical supplies. The report also covers the market size of and forecasts for the drone logistics and transportation market across major regions. For each segment, the market sizing and forecasts have been represented in value (USD million).

Retail and Logistics
Medical Supplies
North America
Rest of the World

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Key Market Trends

The Retail and Logistics Segment to Witness Rapid Growth During the Forecast Period

Drone delivery is a disruptive technology that is redefining the traditional shipping/delivery market with great applications in the future for the retail industry. For online retailers, the drone delivery method has proved to be highly convenient and cheap for ensuring last-mile delivery. Thus, retailers across the world are piling money into programs that can ensure faster delivery of their products. For instance, Chinese companies like Alibaba and JD.com have been using drones to deliver items to shoppers in hard-to-reach rural areas since before 2017. Drone service providers such as Drone Delivery Canada are also ramping up their capabilities to efficiently services an emerging clientele. In December 2019, Drone Delivery Canada entered into a definitive agreement with DSV Air & Sea Inc. Canada to deliver goods on planned routes around its 1.2 million-square-foot warehouse complex in Milton, Ontario, as a depot-to-depot solution. Logistics powerhouses are also investing financial resources to integrate drone delivery capabilities into their existing business model. On this note, in June 2019, Amazon unveiled a state-of-the-art six-rotor delivery drone that can transport a payload of 2.3kg up to 15 miles. The new hybrid drone launched by Amazon is VTOL capable, and it uses a combination of data from visual, thermal, and ultrasonic sensors to navigate and deliver packages safely to the customers autonomously. Amazon has also filed a patent with the US Patent and Trademark Office for a new system called “surveillance as a service” that can transform its delivery drones into hovering intelligent security cameras. Such developments are expected to foster the growth of the retail and logistics segment of the market during the forecast period.

Drone Logistics and Transportation Market Key Trends

North America to Dominate the Market During the Forecast Period

Drone package delivery is gaining popularity, albeit only in a few limited markets. As of April 2020, the Federal Aviation Administration (FAA) the final rules related to drone package delivery in the pipeline. However, the FAA is permitting exemptions to existing rules to enable the use of drones in the delivery service industry. In 2019, companies like Alphabet’s Wing and UPS Flight Forward were granted exemptions that permitted limited drone delivery operations. Deliveries using drones are expected to cost less compared to traditional transportation and are believed to increase the businesses of the service companies. However, the lack of a UAV traffic management system, differences in logistical operations, payloads, size, and the ongoing public debate over privacy and security concerns will act as a barrier to the market's growth. Currently, the companies continue to operate under FAA exemptions and test delivery by drone at FAA-approved test sites across the United States. In 2019, United Parcel Service signed an agreement with CVS Health Corp. to evaluate the use of drones for the home delivery of prescriptions and other medical products. The company is scaling up its operations, as it competes with other companies like Amazon and FedEx Corp. In October 2019, a drone delivery was conducted by Wing Aviation, in collaboration with FedEx Express, as part of the US Department of Transportation’s Unmanned Aircraft Systems Integration Pilot Program (IPP). The drone completed a scheduled commercial and residential deliveries to homes in Christiansburg, Virginia. Wing’s pilot program also includes a collaboration with Walgreens, allowing program participants to order health and wellness products through Wing’s delivery app. On that note, the drone developed by Wing weighs about 11 pounds and can carry packages that weigh a little more than 3 pounds. These drones can fly up to 400 feet above the ground. Such technological improvements to drone architecture and performance are expected to render a positive outlook for the drone logistics and transportation market in North America during the forecast period.

Drone Logistics and Transportation Market Share

Competitive Landscape

Airbus SE, Amazon.com Inc., SZ DJI Technology Co. Ltd, Drone Delivery Canada, and Matternet are some of the prominent players in the market studied. The market studied is in its nascent phase, and most of the developments in the market happened in the past 1-2 years. The advent of players from logistics, healthcare, and food delivery sectors into the market studied led to an increase in the competition for logistics drone manufacturers. While players, like Uber Technologies Inc., started manufacturing their drones, other players had either acquired small drone manufacturers or entered strategic partnerships with the existing players. For instance, in December 2018, Zomato, an Indian food delivery company, announced that it had acquired a drone delivery startup TechEagle Innovations, as it aimed to enable a drone-based delivery ecosystem in India. In addition to this, in May 2019, the German postal giant DHL Express partnered with Chinese drone manufacturer EHang, to jointly launch a last-mile drone delivery solution in urban parts of China. The drone logistics and transportation market is expected to become more competitive during the forecast period, as many companies from various sectors are eyeing the potential benefits of drone delivery and are planning to make use of the huge opportunities existing in the market.

Recent Developments

In April 2020, UPS subsidiary UPS Flight Forward (UPSFF) announced that the company would use drones to deliver prescription medicines from a CVS pharmacy to The Villages, Florida, for the largest US retirement community, home to more than 135,000 residents. The service will use Matternet’s M2 drone system. The new service was scheduled to begin in early May under the FAA’s Part 107 rules, with the authority to operate through the pandemic.

In March 2020, UPS partnered with German drone manufacturer, Wingcopter, to develop a new type of delivery drone. Wingcopter has already designed an electric vertical takeoff and landing (eVTOL) aircraft that has a range of up to 75 miles. The main advantage of the design is that it allows the drone to switch from hovering and vertical lift to a low-noise forward flight mode through a tilt-rotor design which makes it suitable for use in overpopulated areas as well as in difficult weather conditions.

Table of Contents


    1. 1.1 Study Assumptions

    2. 1.2 Scope of the Study




    1. 4.1 Market Overview

    2. 4.2 Market Drivers

    3. 4.3 Market Restraints

    4. 4.4 Porter's Five Forces Analysis

      1. 4.4.1 Bargaining Power of Buyers/Consumers

      2. 4.4.2 Bargaining Power of Suppliers

      3. 4.4.3 Threat of New Entrants

      4. 4.4.4 Threat of Substitute Products

      5. 4.4.5 Intensity of Competitive Rivalry

  5. 5. MARKET SEGMENTATION (Market Size by Value - USD million)

    1. 5.1 Sector

      1. 5.1.1 Commercial

      2. 5.1.2 Military

    2. 5.2 Application

      1. 5.2.1 Retail and Logistics

      2. 5.2.2 Food

      3. 5.2.3 Medical Supplies

    3. 5.3 Geography

      1. 5.3.1 North America

      2. 5.3.2 Europe

      3. 5.3.3 Asia-Pacific

      4. 5.3.4 Rest of the World


    1. 6.1 Vendor Market Share

    2. 6.2 Company Profiles

      1. 6.2.1 PINC Solutions

      2. 6.2.2 CANA Advisors

      3. 6.2.3 Drone Delivery Canada

      4. 6.2.4 Zipline International

      5. 6.2.5 Hardis Group

      6. 6.2.6 Flirtey

      7. 6.2.7 Matternet

      8. 6.2.8 Workhorse Group Inc.

      9. 6.2.9 Uber Technologies Inc.

      10. 6.2.10 Flytrex Aviation Ltd

      11. 6.2.11 Alphabet Inc.

      12. 6.2.12 Amazon.com Inc.

      13. 6.2.13 Airbus SE


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Frequently Asked Questions

The Drone Logistics and Transportation Market market is studied from 2018 - 2026.

The Drone Logistics and Transportation Market is growing at a CAGR of >15% over the next 5 years.

Asia Pacific is growing at the highest CAGR over 2021- 2026.

North America holds highest share in 2020.

Drone Delivery Canada, Airbus SE, Amazon.com, Inc., Matternet, SZ DJI Technology Co., Ltd. are the major companies operating in Drone Logistics and Transportation Market.

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