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Why China Leads and the US Lags in Commercial Drone Deliveries

While the U.S. has only dabbled in drone pilot projects that have seen burritos and pizzas flown to customer doorsteps in one-off stunts, China is pulling ahead in commercial approval for unmanned aerial vehicles (UAVs) thanks to a more progressive regulatory environment focused on narrowing the gap between urban and rural.

With more than half a billion residents dwelling in hard-to-reach remote—and often mountainous—environs, China has plenty of incentives to foster new and cost-effective ways of shuttling goods to far-flung people, where the rural deliveries can cost five times more than they would in a metropolis.

Enabling reliable and budget-friendly means of servicing the last mile would facilitate access to new groups of consumers for online retailers; already 130 million packages are delivered in China every day, thanks in large part to the online shopping boom. Plus, more practically, UAVs also are seen as the most promising means of transporting life-saving devices to distant villages., one of China’s e-commerce titans, is making a big push into drone development, seizing the opportunity to take a leadership position even among the country’s many tech-forward e-commerce firms, Alibaba included. Its two-pronged approach sees smaller, lightweight multirotor craft—what most people think of as the civilian type of drones—making short-run deliveries while larger, fixed-wing craft would ferry “time-sensitive, high value-added goods,” according to a Bloomberg report. The company put its first fixed-wing drone into service during its midyear shopping festival, which raked in a record $17.6 billion over the 18 days ended June 18. So far, the company’s drones have flown more than 5,000 hours.

Related Stories’s “first” comes on the heels of China issuing its first drone pilot license enabling commercial deliveries via UAV to courier SF Express in March, paving the way for investment and development in this growing and competitive sector of last-mile logistics. With the license, SF received the greenlight to deliver packages in approved airspaces in Jiangxi province, with an eye toward expanding regionally and then nationally. Right around the time SF received the license, also unveiled a drone delivery station located in Hainan province, China Daily reported.

Not to be outdone, Alibaba, through its Cainiao logistics arm, is developing cargo drones in partnership with Beihang Unmanned Aircraft System, the Bloomberg report said. One of the drones in development is reportedly capable of hauling a one-ton load up to 1,500 km, or a little further than from New York City to Atlanta.

By contrast, the U.S. has seemed less interested in rushing to permit commercial drone activity, taking its time instead to consider the safety and privacy implications of UAVs as well as the best methods for communicating with the aircraft though a low-level air-traffic control system—especially where densely populated urban centers are concerned. However, the FAA in May approved 10 public-private UAV projects involving major tech firms such as Qualcomm, Uber, FedEx, Alphabet, Microsoft and Intel—with Amazon and its Prime Air group noticeably snubbed. Drone specialists such as Flirtey and Airmap are also participating.

“Data gathered from these pilot projects will form the basis of a new regulatory framework to safely integrate drones into our national airspace,” U.S. Secretary of Transportation Elaine Chao said upon announcing the news in May. According to the FAA, commercial UAVs could add $82 billion and as many as 100,000 jobs to the economy in less than 10 years.