Amazon set to expand drone delivery of lightweight packages to 500 US cities

Amazon is set to expand its drone delivery service to deliver lightweight packages to an additional 500 U.S. cities by year's end, according to a company announcement on Thursday. The drone shipments, which can carry packages up to 5 pounds, could reach customers as quickly as 30 minutes after the order is placed. The expansion would bring Amazon's drone delivery operations into nearly 500 new communities nationwide, including major metro areas like Chicago, Atlanta, Cleveland, and Boise.

The increased availability of drone delivery is expected to intensify the competition between Amazon and Walmart, both of which rely on a mix of drones and drivers to deliver consumer orders. Amazon's plan would increase its drone delivery coverage more than sixfold nationwide, primarily serving suburban areas away from tall buildings and major airports.

While Amazon has already delivered hundreds of thousands of packages using drones this year, the airborne shipping will still only handle a small fraction of the hundreds of millions of packages delivered annually. The service has limitations, such as being able to carry only 5-pound packages and facing challenges from tree cover, landscaping, and inflatable pools that make it difficult to find suitable drop zones.

Regulatory hurdles and noise concerns also pose potential obstacles in each community where Amazon wants to set up operations.

Retail analyst Sucharita Kodali from Forrester notes that the novelty of drone delivery may initially attract consumers to use the service, but it is unclear how frequently they will continue to use it. Currently, Prime members who order more than $50 worth of goods can receive free drone deliveries, while smaller orders will cost $2.99 for Prime members and $4.99 for non-members. Non-members pay a flat fee for drone delivery, depending on the package size and delivery speed.

Amazon CEO Andy Jassy has expressed confidence in the potential of drone delivery for certain lightweight and urgent deliveries, such as prescription medications. In April, he shared Amazon's progress in the drone delivery program, stating that the company has learned valuable lessons from flying drones in 11 sites across various U.S. states and plans to serve communities with 30 million customers by year-end.

The company aims to deliver half a billion packages by the end of this decade, with a target of delivering packages within 30 minutes.