Rosy outlook for UAV courier services in China

Unmanned aerial vehicles used for courier services first appeared in Shanghai and Guangdong last year, and now one firm has acquired a fleet of 500 drones to deliver packages in Guangdong’s Dongguan and Huizhou with maximum speed of about 60 kilometers per hour, Guangzhou’s 21st Century Business Review reports.

Developed by Guangzhou’s XAircraft, the UAVs can carry four kilograms of goods and can fly uninterrupted for about 45 minutes, said Xaircraft co-founder Justin Gong. As the test runs have gone smoothly, a total of 5,000 Xaircraft-made UAVs will be used for courier services by the end of this year, according to Gong’s estimates.

In late 2013, international renowned courier firms, including EMS, UPS, DHL and FedEx all expressed interest in using UAVs.

There are still questions that remain, however, like which party should be responsible for the loss of goods in the event of an error — the courier firm, the UAV maker or the insurance firm. There is no precedent to follow in the courts, not even in the United States, as the Federal Aviation Authority has still not lifted a ban on the use of UAVs for courier services. The FAA is trying to suppress a budding industry, said Raphael Pirker, founder of Team Blacksheep, a Swiss UAV maker.

XAircraft’s solution is to play the roles of both operator and insurer. When the UAV fails, the firm will check the black box in the drone to inspect the flight log, allowing them to identify anomalies. If the problem lies with the drone, the UAV firm will take responsibility for all losses incurred.

There is a lot of anticipation in the global market for UAV courier services, although this was dampened by the FAA decision to ban the practice. This took the wind out of the sails of Amazon, which had announced its Prime Air project, under which the company would be able to deliver packages within 30 minutes using drones. Despite the US ruling, Google announced in August its acquisition of UAV firm Titan Aerospace, saying its UAV has been in test runs in Australia’s Queensland. US-based consultancy firm Frost & Sullivan estimates that the global commercial-use UAV market will reach US$2 billion by 2015.

XAircraft was founded seven years ago and has just completed its first round of financing, introducing US$20 million in funds from Silicon Valley to develop UAV technology. It will build a factory in November in Dongguan to produce UAVs.

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