Drone delivery facing challenges

Drones are a welcome delivery approach for today's consumers but there are challenges both on the regulatory and the geographic fronts, according to a study in INFORMS journal Transportation Science.

While a drone approach allows e-tailers to reach smaller markets and more price sensitive customers, delivery may not be feasible in densely populated areas and governmental regulations will play a role in drone target markets, according to a release on the research.

The study, conducted by Gohram Baloch and Fatma Gzara, of the University of Waterloo in Ontario, Canada, uses New York City as an example and looks at data surrounding the Manhattan area. They chose New York because Amazon, first started its two-hour delivery services in the Big Apple.

"Our results show that government regulations, technological limitations, and service charge decisions play a vital role in optimal configurations and drone target markets,"Gzara, a professor in the Department of Management Sciences at Waterloo, said in the study.