Tuesday, January 3, 2017

Amazon’s Genius Airborne Fulfillment Centers Mirror the Airline Industry’s Hub-and-Spoke Paradigm

Ars Technica thinks Amazon’s purposed blimp warehouses are “demented”, but Amazon’s drone army has big problems. Chiefly, it’s drones can only fly 15 miles total.
How can Amazon reach millions living outside the 7 mile warehouse radius without doting the nation with expensive fulfillment centers? Unlike Boeing’s 787 Dreamliner, which is ideal for point-to-point travels, drones are far too limited in range. Even if Amazon dotted the nation with small warehouses to accommodate short last-mile ranges, transportation among hubs remains problematic. Amazon must adopt the Airbus A380 hub-and-spoke model, but what could service main trunk routes? Amazon could copy Fedex’s ground transportation and airline network, but slow ground transportation would quickly end same day delivery ambitions. Amazon must move hubs closer to consumers to accommodate limited drones while maintaining fast transportation among hubs.
Costs for drones are also problematic. Flexport points out:
Route density makes today’s last-mile delivery networks extremely efficient. FedEx and UPS trucks enjoy a marginal cost for dropping off one more parcel as low as $2.00. Drones launching from faraway warehouses won’t be able to compete with this efficiency any time soon.
Alternatively, Amazon could release drone swarms in neighborhoods from a self-driving truck, which could be much more efficient than a delivery person going door to door. Using self driving trucks for drone swarm deployment would allow hubs to move closer to a consumer without the need for Amazon to build warehouses every 7 miles.
Amazon also has other ideas, namely the Airborne Fulfillment Center (AFC): Amazon’s blimp warehouse hubs.

Hub-and-Spoke for Drones

AFC’s masquerade as flying drone airports, major hubs that smaller shuttle blimps stock with goods and drones. Shuttles would travel the main trunk routes between hubs and terrestrial warehouses while drones would fly only the shorter last-mile spoke journeys. After departing a hub and delivering, drones would then return to the smaller shuttles blimps which then restock AFC’s.
This solves the problem facing limited drone range while allowing hubs to be closer to consumers. The dreamy blimps also continue Amazon’s trend of turning to the skies over terrestrial infrastructure to quicken deliveries.
Amazon’s hub-and-spoke ambitions aren't radical for delivery service. Fedex has employed the hub-and-spoke model for overnight package delivery since the the mid 1970’s using airplanes.
Although radical flying warehouse may not be the future, what’s certain is the proposed delivery system proves Amazon’s commitment to it’s drone dreams as a last-mile solution.