FAA report estimates huge growth in commercial drone market
Due to recent regulatory progress, the subject of commercial drones is a piping hot topic in the industry right now. In this week’s news, the Federal Aviation Administration (FAA) released an annual forecast report that projects that the number of commercial drones in use in the US will triple by 2023.
As the commercial drone market is growing, the model (non-commercial) drone market is simultaneously slowing down. The FAA reports that it registered over 900,000 drone owners and around 1.25 million model drones last year, but this is only expected to grow to about 1.39 million units in 2023.The report also noted that the “pace of monthly registration (for commercial drones), almost 15,000, is nearly 3-times higher than the pace at which non-model aircraft owners registered their craft during the same time last year.” The registration rate will top 44% over last year’s figures and the FAA estimated that a total of 823,000 drones will be in the skies in 2023.
You can read more on this here.
Adidas looks to air freight to solve shortage woes
During its Q1 earning call earlier this week, Adidas announced that it will be increasing its use of air freight to respond to product shortages, which affected revenue growth during the first quarter of this year. In turn, this hopefully have an impact on profit margins for the rest of 2019.
Adidas’ shortages are claimed to stem from a high rise in demand for certain mid-priced apparel, which the company has not been able to meet. The overall financial impact of the shortages on revenue is estimated to be between €200 million to €400 million ($224m – $448m). An increase in air freight is expected to rack up “substantial” costs during the second and third quarters. As a longer term solution, the firm will secure extra supply chain capacity from its suppliers and move to overtime where necessary.
Click here to read the full report.
Nestle to stop direct-to-store delivery, cutting 4,000 jobs
Nestle’s U.S. unit is set to dismiss about 4,000 out of 48,000 workers as it stops delivering frozen pizzas and ice cream directly to stores, switching to a more economic warehouse model. It will shut down its direct-to-store delivery network for products such as DiGiorno and Skinny Cow beginning in the third quarter.
Its current direct delivery operation includes 230 facilities, 1,400 trucks and 2,000 different routes. Although the unit has been able to reduce costs, the direct-to-store delivery model proved to be too expensive, even when the company reached the “the maximum point of efficiency.” Nestle USA already uses the warehouse model for its frozen meals and snacks. The job cuts will initially cost $500 million and the shutdown will include the closure of 8 company-owned distribution centers. A change of model will “increase Nestle’s flexibility to adjust its U.S. frozen food business with possible further divestments” in 2020.
For more information, click here.
Have a great weekend.