Zipline:Conquering Last Mile Delivery in Health Care
The Driver:
Zipline recently announced that it is partnering with nutrition and supplements retailer GNC to start drone delivery of online orders in select markets, beginning with Salt Lake City Utah, this summer. Zipline raised $330M in a Series F funding led by Reinvent Capital and Baillie Gifford in April of 2023, bringing its total funding to $821M according to Crunchbase. Zipline is a California-based automated logistics company that designs, manufactures, and operates drones to deliver vital medical products. The funds will be used to design and manufacture drones to help those in need.
Key Takeaways:
In a study comparing drones and road paving for blood delivery in Rwanda, facilities were able to reduce inventory …without impacting service levels, and a 40% reduction in the number of blood products destroyed or damaged (U. of Pennsylvania)
Drones can reduce energy consumption by 94% and 31% and GHG emissions by 84% and 29% per package delivered by replacing diesel trucks and electric vans, respectively (Carnegie Mellon)
In May 2023, Associated Couriers announced they will enter into a partnership with Zipline to deliver specialty prescriptions and medications to long-term care facilities across Long Island (Associated Couriers)
Medium and heavy trucks in the United States are responsible for 37% of transportation-related greenhouse gas (GHG) emissions (Carnegie Mellon)
The Story:
Zipline was founded by CEO Keller Rinaudo and according to its website “Zipline is on a mission to build the world’s first logistics system that serves all people equally…to [transform] access to healthcare, consumer products, and food.” The company originally started delivering blood and medical products in Rwanda in 2016 and has since expanded to food, retail, agriculture products, and animal health products and now has operations in the US, Rwanda, Ghana, Nigeria, Cote d'Ivoire, Kenya, and Japan. According to an article in Axios, Zipline began operations in the U.S. by delivering PPE during COVID in partnership with North Carolina-based hospital system Novant Health. At that time drone delivery was operated under a waiver from the FAA.
CEO Clifton believes the company’s drone technology is more ecologically efficient and friendly than current delivery technologies like internal combustion engines. For example, Clifton notes that businesses tend to utilize “the same 3,000-pound gas combustion vehicles driven by humans to make billions of deliveries that usually weigh less than five pounds. This is slow, it’s expensive, and it’s terrible for the planet. We actually think it’s inevitable that this is going to shift towards systems that are quiet, less obtrusive, and actually good for the environment,”
The Differentiators:
Zipline creates and deploys different autonomous drones to help deliver goods to difficult places in an eco-friendly way. With operations in seven countries, Zipline has covered over 45 million autonomous miles to help increase access to healthcare to people around the world. Zipline delivers consumer products, food, and other goods.
The company has two delivery platforms- one for long-range and one for precise home delivery. As noted in a press release, when using the company’s Platform 2 approach, when the Zip arrives at its destination, it hovers safely and quietly at that altitude, while its fully autonomous delivery droid maneuvers down a tether, steers to the correct location, and gently drops off its package to areas as small as a patio table or the front steps of a home.
According to the company they have completed deliveries to thousands of homes, businesses, and hospitals across the US, Rwanda, Ghana, Nigeria, Kenya, and Japan. The company states that their efforts have been reported to have saved lives, lowered costs, increased convenience and reduced harmful emissions compared with traditional delivery methods.
In May of 2023, Associated Couriers announced they will enter into a partnership with Zipline to deliver specialty prescriptions and medications to long-term care facilities across Long Island.
The Big Picture:
Zipline’s drone delivery can help get goods to hard-to-reach locations more quickly and efficiently. As noted, Zipline’s drone flights first began in 2016 to help with the national blood delivery network in Rwanda. The speed and flexibility of Zipline’s delivery system can help save lives. For example, in a study comparing drone delivery with paving roads, researchers from the University of Pennsylvania found an 88% reduction of in-hospital maternal deaths from postpartum hemorrhage in Rwanda. The authors noted that as a result of Zipline’s logistics and delivery system, they found that “transfusing facilities [were able to] substantially decrease their on-hand inventory and wastage, but do not find any change in the management of blood inventory after paving roads.”
Interestingly while the authors were looking at critical supplies like blood supply, it appears that some of their findings could be extrapolated to show other economic benefits. For instance, the authors noted, “that facilities were able to reduce their on-hand inventory …without impacting service levels, [they found] a 40% reduction in the number of blood products destroyed or damaged [and did] not find statistically significant evidence of a change in the number of blood units used.”
In addition to aiding in the delivery of supplies, Zipline can have a big impact on the environment and climate change. Drones reduce inefficiencies and waste, especially carbon emissions. The United States transport sector heavily relies on petroleum, especially in the use of medium and heavy trucks. As noted in an article entitled, “Drone flight data reveal energy and greenhouse gas (GHG) emissions savings for very small package delivery” the U.S. transportation sector contributes to 37% of transportation-related greenhouse gas emissions, which is a significant contributor to climate change. Even light-duty vehicles contribute to the problem, accounting for 57% of transportation greenhouse gas (GHG) emissions and 64% of transportation energy use.
Transportation can also be a major source of nitrogen oxides (NOxs) and other air pollutants, which can have adverse effects on human health and the environment. The authors found that “drones can reduce the energy consumption by 94% and 31% and GHG emissions by 84% and 29% per package delivered by replacing diesel trucks and electric vans, respectively.” Utilizing drones will help maximize energy productivity. This will aid in reducing the amount of greenhouse gases within the atmosphere as well as reducing the energy and climate impacts of package delivery.
GNC partners with instant logistics provider Zipline for drone delivery service,South San Francisco drone delivery startup Zipline raises $330M; valuation jumps past $4B
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