Are Drones an Opportunity, Risk or Both for Your Business?

Here are six reasons Australia’s drone industry is taking off:

• Solid drone-related research
• Availability of land and coastline
• Strong base of aerospace manufacturing
• Proximity to growth markets
• Home to industry stakeholders and global companies
• Drone-friendly laws.

For now, drones can’t be flown autonomously, only automatically. A remote pilot needs a visual line of sight and an available global positioning system. Compelling use cases exist though. These include agriculture, ecommerce, construction, freight and last-mile delivery, medical equipment, mining and resources, recreation/entertainment , and environmental management. Passenger drones are also on the cards.

How to be compliant

If you’re using a drone for business or as part of a job, you’ll need to register it annually with CASA, except some circumstances you can read about here. Learn more about CASA’s enforcement and penalties regarding drones. State and territory rules apply for drone use, too.

Extra regulations to protect people who work with drones may also be drawn up. For example, check out the Transport Workers’ Union submission on the Federal Government’s consultation about infrastructure planning guidelines. Final drone delivery guidelines should be released later this year.

Use case #1: Agriculture

While Australian figures aren’t available yet, in the US, the average farmer using drones enjoys a US$12 per acre return on investment for corn, and up to US$3 for soybeans and wheat.

Deloitte looks at the statistics another way for Australia. It forecasts drones ‘delivering’ $2.95M in savings for our agriculture, foresting and fishing industries. Drones are cheaper and more accurate for tracking agricultural productivity than satellites.

Drones can help with soil analysis, seed planting, scheduling harvesting, agricultural spray dosing, land surveying, locating stock/endangered species, and bushfires detection.

Use case #2: Ecommerce

Drones have the potential to save the e-commerce and delivery sector $1.875M. Deloitte says that by the late 2020s, we’ll see drones used for:

• Express parcels
• Food deliveries (and reach up to 65 million trips by 2040)
• Imported pharmaceuticals
• Regional and remote pathology
• Medical dispatches
• Some cargo-airfreight.

The only snag is ensuring the drone’s payload is within the weight specifications and aviation guidelines.

Use case #3: Construction

More than seven in 10 Australian construction businesses will use drones by 2040, says Deloitte. This sector is an early adopter and is expected to save $1.875M thanks to drones.

Already drones support inspecting powerlines, bridges and rail, as well as reducing the need for in-person inspections for the estimation and design phase of projects. Project managers are using sharable drone maps and 3D models to save time and minimise risk. Drones can measure stockpiles, boost communications and aid in safety inspections.

The technology needs more finessing for drones to quickly produce 3D terrain maps, higher-resolution images, and better GPS to link to ground-based geographic co-ordinates. The sector also needs more sophisticated data analytic generation. If all those issues are resolved, drone unit numbers in construction would hit their peak at about 2030, then flatline, Deloitte says.

Protecting your business

Drones offer potential as a great asset for your business, but create hazards and risks.

We can help with risk management, including by suggesting the best-fit commercial drone insurance. Typically, these protect your business in these ways:

• Your drone injures a third party or causes them property loss or damage (public liability)
• Your drone is damaged or lost, such as through loss of control and a crash. This coverage includes equipment you use or carry with the drone, such as the payload.

Extra coverage is available for spare parts, the drone in transit, and drones you use but don’t own. Be aware of exclusions, though. These may come into play if you don’t register your drone, log flights, operate it safely or fail to log maintenance and battery cycles.

Insurers also want to know your systems to manage risks and safety, and the experience of who’ll be piloting your drones. We can guide you in collecting the information required to secure a policy at the right premium that suits your needs.