Behind its store in tiny Pea Ridge, Ark., Walmart is experimenting with the future. There’s a mini airport in that location’s back parking lot, where a fleet of five drones will take off and land, ferrying prescription pills, vitamins, and COVID-19 tests to customers up to 50 miles away.
A drone pilot is running through a flight check for one of the aircraft, which resembles an airplane, but with only an 11-foot wingspan. When it reaches the intended customer’s home, the drone is supposed to hover, open a door in its fuselage, and drop a blue box tethered to a parachute so it can glide gently to the ground.
“Our very first customer is right there,” says Evan Britton, flight operations lead for Zipline, the drone company overseeing the distribution site for Walmart, pointing to a wall monitor. The screen shows the routes of the project’s first deliveries, which began in mid-November to a handful of Walmart employees.
But it soon starts to drizzle. And Britton tells me the drone—despite being able to withstand rain along with high winds and extreme temperatures—is grounded. For now, Zipline is flying its drones in Pea Ridge only during good weather.
Companies seeking federal approval for drone deliveries have faced major turbulence. Eight years after Jeff Bezos stunned the world by announcing that Amazon shoppers would eventually get their packages delivered by drone a mere 30 minutes after ordering, U.S. airspace regulation has, apart from small tests, kept most drones grounded.
Zipline, Google parent Alphabet, UPS, and Amazon have made thousands of flights. The technology is ready to go, drone companies say. And since the COVID pandemic began, demand for contactless delivery has only increased—including for medical supplies. Yet the wait continues.
As for gifts being delivered by drone during the current busy holiday shopping season, forget about it.
Drone package deliveries started to take off—literally—on July 17, 2015, more than one and a half years after Amazon’s initial drone announcement. It was Australian startup Flirtey that made the first federally approved drone delivery; a quadcopter flew just over six minutes roundtrip to deliver medicine in Virginia.
Since then, drones have transported Domino’s pizzas, Chipotle burritos, and 7-Eleven Slurpees. UPS is ferrying health care supplies from Atrium Health Wake Forest Baptist’s central lab and pharmacy in Winston-Salem, N.C., to nearby facilities, and it’s delivering prescription medication via drone to a retirement community in Florida. Meanwhile, Alphabet, through its subsidiary Wing, is setting up a drone port in a Walgreens parking lot in Dallas to deliver orders to the nearby towns of Frisco and Little Elm.
The arguments in favor of drone delivery have been on repeat for years. Drones are supposedly cheaper to operate than delivery vans, and their use could eliminate the release of 114,000 tons of carbon dioxide annually in individual metro areas. Drones can also deliver orders faster than vans, particularly for people who live in rural areas or those trapped in disaster zones.
“The way that we’ve solved instant logistics so far has been a human driving a 3,000-pound gas combustion vehicle to your home to drop something off that weighs a couple pounds … Not only is it very expensive for the end user and pretty slow, it’s also really bad for the environment,” says Keller Rinaudo, Zipline’s CEO.
Though drones have disrupted wildlife, and a series of crashes raised questions about their safety, current debate lies in how, not whether, to allow drones in U.S. airspace. The problem is that Federal Aviation Administration regulations weren’t written for drones.
“In some ways it’s like trying to fit a square peg into a round hole,” says Lisa Ellman, executive director of the Commercial Drone Alliance, a drone policy and advocacy organization. FAA regulations were created with large passenger jets in mind—not five-pound unmanned drones. “They’re all regulated in the same way,” she says.
The FAA has made some progress. In 2016 it clarified how companies can use drones. Then earlier this year it created a new certification that lets commercial pilots fly drones at night and over people’s heads without first receiving a waiver. Only UPS, Alphabet’s Wing, and, most recently, Amazon have been granted the full certification. As of the end of October, there were six additional companies in the queue, including Zipline, according to the FAA.
But a major hurdle still remains: Without a waiver, drones can’t be operated out of sight—meaning that at least one human must have an eye on the drone during its entire flight. Because of safety concerns, getting these waivers approved can take a long time, according to the FAA, which says it has approved 162 thus far. “It’s not scalable. It’s also not necessary for the technology,” Ellman says about the current rules.
The FAA is trying to eliminate some of the hurdles for out-of-sight flying by streamlining the process so that companies can ramp up their operations more quickly. “If this industry is going to grow, there needs to be a standard set of rules for Beyond Visual Line of Sight Operations. And we’re working closely with the drone community to do it right,” FAA administrator Steve Dickson said during a speech in September.
But the FAA acknowledges that its rulemaking for out-of-sight flight may take three or four more years.
The Zipline partnership isn’t Walmart’s first foray into drones. In 2015, it applied to the FAA to test grocery deliveries and also considered using drones to track inventory in its distribution centers. Nothing came of those plans, and Walmart instead opted to partner with drone companies rather than build its own technology. In 2020, it started using drones to deliver household goods and food in North Dakota and North Carolina, in alliance with Israeli company Flytrex. It also partnered with, and later invested in, DroneUp to deliver COVID tests in Las Vegas and Cheektowaga, N.Y. And in November, it planned to open another drone site in Farmington, Ark., for deliveries within a one-mile radius of the facility.
“Walmart has more than 4,700 stores stocked with up to 120,000 of the most needed items located within 10 miles of 90% of the U.S. population, making us uniquely positioned to offer drone delivery to our customers,” a Walmart spokeswoman said.
With its new site in Pea Ridge, Walmart’s drone service area will be larger than the state of Connecticut—assuming the project gets FAA approval. So far, the retailer has a few dozen customers signed up for deliveries through Zipline’s app. More can be added after the project gets government clearance.
For Zipline, the Walmart partnership is a huge seal of approval and marks its first U.S. commercial drone distribution center. The company, founded in 2014, has made more than 215,000 drone deliveries, mostly in Rwanda and Ghana, providing vaccines and medical supplies.
Pea Ridge Mayor Jackie Crabtree, for one, is looking forward to drones helping deliver supplies during emergencies and transporting prescriptions and other goods to the elderly in his Northwest Arkansas town, population 6,559 and home to an annual mule-jumping competition. Of course, he’s impatient for one of Zipline’s drones to make a Walmart delivery at his house and has asked “three or four times” to be put on the early list of customers. But so far, no luck. Says Crabtree, “I don’t know if I’ve convinced them.”
Awaiting takeoff
Drone delivery has mostly failed to take flight. But several companies are experimenting. These are some of the key players.
Amazon
The retail giant made its first drone delivery in the U.K. in 2016. Since then, it has gone mostly silent about its operations, including in the U.S., where it’s among only three companies approved to fly over people and at night.
Flirtey
After completing the first U.S. drone delivery in 2015, Flirtey was cleared to make deliveries in New Zealand. In October, it partnered with U.S. regional airline Mesa Air to test delivering food by drone.
Flytrex
The Israeli drone company started testing deliveries last year in Grand Forks, N.D. Now it’s also delivering food in Holly Springs, N.C., and has partnered with Walmart on deliveries in Fayetteville and Raeford, N.C.
JD.com
The Chinese e-tailer started testing drone deliveries in China in 2016 and has since provided its tech to Japan’s Rakuten for making deliveries to mountain huts near Hakuba, Japan.
Matternet
Matternet is building 40 drone ports around Abu Dhabi for medical deliveries. In Switzerland, the company has permission to fly drones beyond its pilots’ line of sight. And in Winston-Salem, N.C., it has partnered with UPS to deliver supplies from two health care centers.
UPS
The delivery giant has completed more than 7,600 drone flights in the U.S., including the distribution of COVID vaccines in Winston-Salem as well as deliveries within a Florida retirement community.
Wing
Alphabet’s drone unit has made over 100,000 deliveries—more than half of them this year in Australia. It has partnered with Walgreens in Dallas to deliver 100 items, such as health products and snacks.
Wingcopter
This German dronemaker is delivering blood samples in its home country. Meanwhile, its drones are also being tested in Hutchinson, Kans., by Air Methods, which plans to create a U.S. drone delivery network for health supplies.
Zipline
The California-based company has made more than 215,000 drone flights, primarily in Ghana and Rwanda, to deliver medical supplies. Its first U.S. project is in Pea Ridge, Ark., where it’s working with Walmart to eventually deliver health and wellness products within a 50-mile radius.
A version of this article appears in the December 2021/January 2022 issue of Fortune with the headline, “Drone dreams delayed.”
