DPSGY Deutsche Post AG (PK)

By Hendrik Varnholt 

PRIEN, Germany--High in the Bavarian Alps, package-delivery giant DHL this week demonstrated the potential and pitfalls of shipping with drones.

The unit of German postal company Deutsche Post AG on Monday presented a new unmanned aerial vehicle capable of carrying up to two kilograms, or almost 5 pounds, for several kilometers. DHL, which already has used a drone to deliver medicine to a remote North Sea island, convinced German authorities to close local airspace for test flights and invited media to see the aircraft's capabilities.

Then Deutsche Post scrubbed the proposed flight Tuesday, blaming winter weather. The company had said its drone was perfectly suited to use in mountain regions, where wind, cold and snow are frequent concerns.

Despite the setback, Deutsche Post's board member Jürgen Gerdes told a group of international journalists who had traveled to see the flight that "the drone works."

He said that "in the not-so-distant future, drone deliveries will no longer be a niche business" and the company would operate a fleet of flying DHL drones.

Still, DHL's ability even to plan such a flight puts it far ahead of U.S. companies, which are struggling to test commercial drones under strict Federal Aviation Administration restrictions.

DHL is also developing driverless delivery vans, Mr. Gerdes said. "It's unbelievable how well that works," he said of the vans, although the technology remains far from routine use, he added.

The German company's approach to drone delivery differs from those of Amazon.com Inc. and Alphabet Inc.'s Google unit, which have both talked up prospects of autonomous deliveries straight to customers' doorsteps.

DHL aims to use drones for shipments to parcel lockers--like the thousands of the company's existing Packstation delivery lockers. Customers receive a personal code to open a specific locker once a package has been delivered. By delivering parcels to pickup facilities rather than recipients' homes, DHL aims to avoid difficulties and the risk of collisions in landing at unfamiliar locations.

DHL Senior Vice President Ole Nordhoff said the company's new drone can autonomously place parcels inside a locker unit, through a door in the top. The unit automatically sorts deliveries into specific lockers.

"The locker station is packed with technology," he said.

DHL in 2014 conducted a three-month test in the North Sea using helicopter-like drones. The company's newest unmanned aerial vehicle is completely redesigned and more closely resembles an airplane with propellers that tilt or the U.S. military's tilt-rotor V-22 Osprey. The 12 kilogram aircraft has done test flights of roughly 8 kilometers, climbing from a base at 700 meters to a remote ski area 500 meters higher up.

The company opted for a tilt-wing design because it can take off and land vertically like a helicopter and fly like an airplane.

"Tilt-wing drones are more energy efficient and can therefore travel longer distances," said Dieter Moormann, a professor of flight dynamics at Germany's University of Aachen, which was a partner with DHL on the project.

In Germany and other countries, drone operators must keep unmanned aircraft in visual sight, Prof. Moorman said. For DHL's test flights, German aviation regulators closed local airspace. Mr. Gerdes helped negotiate the exemption, he said.

In the U.S., a 2012 law exempts recreational drone use from most restrictions, but the FAA has effectively banned commercial use of the devices. The agency two years later started approving commercial operations on a case-by-case basis. It has now authorized more than 3,000 companies to operate drones in the U.S. for uses including farming, filmmaking and aerial inspections of pipelines and other remote locations. Only licensed pilots are allowed to operate these companies' drones.

U.S. approval of some commercial-drone operations has relieved some pent-up demand for such flights, but the drone industry is still awaiting comprehensive commercial-drone rules that were proposed in early 2014. The proposed rules prohibit drones from carrying external payloads or flying over bystanders--conditions that likely preclude drone deliveries, industry officials say.

In Germany, Deutsche Post's Mr. Gerdes said the company aimed to begin wider business tests of drones in the next year or two. He declined to disclose the company's investment in the project plans for its rollout.

Jack Nicas contributed to this article.

Write to Hendrik Varnholt at hendrik.varnholt@wsj.com

(END) Dow Jones Newswires

January 19, 2016 13:18 ET (18:18 GMT)

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