Commercial drone deliveries are demonstrating continued momentum in 2023

Drone delivery—packages sent to consumers via unmanned aerial vehicles, often in just minutes—is already a commercial reality in some regions. There were more than ten drone operators that each completed more than 5,000 commercial deliveries in 2022, with the leading player having made hundreds of thousands of deliveries. Overall, the number of packages delivered by drone increased by more than 80 percent from 2021 to 2022, reaching almost 875,000 deliveries worldwide. The first half of 2023 indicates we are on track for another record year, with an estimated 500,000 commercial deliveries occurring through the end of June. Delivery projections through the end of this year exceed 1 million thanks to a range of new applications enabling the delivery of food, medication, goods, and more to consumers across the globe. In future years, commercial deliveries are expected to scale even faster as new regulations enable broader operations, consumer adoption improves, and economies of scale are realized (exhibit).

Commercial drone deliveries are projected to exceed 1 million in 2023.

Three major trends contributed to the growth in drone deliveries and will spur ongoing expansion: growth in Africa and North America, the emergence of new use cases, and coalescing regulatory standards.

North America and Africa are starting to gain ground

The Asia–Pacific region accounted for 43 percent of global drone deliveries in the first half of 2023. North America only had a 15 percent share, but this represents an increase of 50 percent compared to its 2022 share. Africa also demonstrated momentum, and its share of global drone deliveries increased from 13 percent in 2022 to 32 percent in the first half of 2023. In Europe, by contrast, the share of global drone deliveries fell from 17 percent in 2022 to 9 percent in the first half of 2023.

Additional use cases are emerging as mainstream retailers test drone technology

Drone deliveries in the restaurant industry increased by 195 percent from 2021 to 2022 and by 100 percent in the grocery and convenience industry. E-commerce also saw its first few deliveries in 2022. While other segments are growing quickly, healthcare continues to be the market leader and accounted for 45 percent of 2022 deliveries and 54 percent of deliveries that occurred in the first half of 2023. Interesting use cases at retailers, restaurants, other businesses include the following examples:

  • DoorDash and Wing announced a pilot program in November 2022 for DoorDash’s Southeast Queensland region in Australia.
  • Walmart has partnered with four drone delivery companies—DroneUp, Flytrex, Zipline, and most recently Wing—and established 36 stores as drone-delivery hubs in seven US states.
  • Amazon Prime Air launched its own drone delivery program, making deliveries in test sites in California and Texas.
  • Tesco launched its drone delivery service with Manna in 2020, initially launching in Galway and delivering nearly 10,000 items to residents in its first year.
  • Meituan, a food delivery platform in China, has delivered about 170,000 orders across 18 communities since its first delivery in 2021.

Regulatory standards are coalescing

The third major trend involves the creation of new regulatory frameworks. For instance, the US Federal Aviation Administration (FAA) recently established the Beyond the Visual Line of Sight (BVLOS) Advisory and Rulemaking Committees (ARC). In 2022, the ARC issued a report emphasizing the need to create a regulatory framework, including airworthiness certification, for unmanned aerial vehicles (UAVs) engaged in commercial BVLOS flights in higher-risk environments. As of September 2023, the FAA has approved BVLOS operations under specific conditions and geographic locations without the need for Visual Observers at seven test sites and for two delivery players: UPS Flight Forward and Zipline.

Regulators in the United States and globally are working to develop broader BVLOS regulatory frameworks and are approving BVLOS exemptions that allow broader scaling in the meantime. As regulations shift, companies could unlock significant sustainability and cost advantages, making drone delivery a more attractive option for retailers and consumers. For instance, increasing the number of drones that a single operator can fly could improve the underlying economics of the technology. In addition, the per-package emissions for drone delivery are only 15 to 20 percent of the amount emitted for single-package delivery via a vehicle with an internal combustion engine. For this reason, we anticipate that 2024 will see even greater growth than 2023 as companies are able to operate BVLOS.

We are at an exciting time in the logistics industry. Drones have the potential to disrupt norms and offer greater convenience to customers. As retailers test the technology, regulations move forward, and costs come down, drone delivery will have a significant opportunity to shift the way goods are delivered to homes.

Andrea Cornell is an associate partner in McKinsey’s Denver office, Sarina Mahan is a consultant in the Waltham office, and Robin Riedel is a partner in the San Francisco office.

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