Chinese couriers may love it but the idea of drones doesn’t fly with FedEx

FedEx, the world’s biggest express delivery company with more than 600 planes, is not too hot on the idea of drone delivery even though some Chinese companies including SF Express and Taobao are toying with the idea.

“The thing with drones is that they’re very good at catching headlines. But the challenge...is how you take a neat gadget and make it a technology that is sustainable, scalable and delivers real benefits to the customer,” FedEx’s Asia-Pacific president Karen Reddington told the South China Morning Post. “And it’s gotta be significant customer needs (before we invest in this).”

China’s express delivery market has been growing at more than 30 per cent for the past few years, replacing the US as the world’s biggest by volume, thanks to the e-commerce boom.

In FedEx’s home market of the US, e-commerce platform Amazon has come to be seen as a competitor rather than a customer for FedEx and its peer UPS since Amazon started leasing planes itself and bought a stake in freighter lessor ATSG in March.

Reddington shrugged off the idea of Amazon or its Chinese counterpart Alibaba as threats.

“Some of the speculation has been overblown. Their business is focused on e-tailing or Web services or cloud computing services. Even as a bricks-and-mortar retailer, [Amazon] always had some of their own distribution,” she said. “We operate one of the biggest airline fleets in the world. It takes time to replicate that model.”