Abstract

Unmanned Aerial Vehicles (UAVs), commonly known as drones, have emerged as transformative technology in modern logistics systems, offering unprecedented opportunities for cost optimization and operational efficiency. This study examines the role of UAV technology in achieving cost leadership strategy in logistics operations through the lens of Porter’s competitive advantage framework. Drawing on global case studies including Rwanda’s medical logistics network, Amazon Prime Air, and disaster relief operations, this research analyzes how UAVs reduce operational costs, improve delivery speed, and overcome infrastructural limitations in both developed and developing economies. The study employs a mixed-methods approach, combining systematic literature review, comparative case analysis, and costbenefit assessment to evaluate UAV implementation across different logistics contexts. Key findings reveal that UAVs can reduce last-mile delivery costs by 40-70% compared to traditional ground transportation, complete deliveries in minutes rather than hours, and operate independently of road infrastructure. However, technical limitations (battery capacity, payload restrictions), regulatory challenges (Beyond Visual Line of Sight restrictions, airspace management), and social acceptance issues present significant barriers to widespread adoption. The research contributes to strategic management literature by demonstrating how UAV technology serves as a digital transformation tool enabling cost leadership in Logistics 4.0. Practical implications include policy recommendations for risk-based regulatory frameworks (following EASA and Rwanda models), hybrid integration models combining UAVs with existing transport systems, and local capacity building initiatives. The study concludes that while UAV technology offers substantial cost advantages, successful implementation requires harmonized international regulations, technological advancements in battery systems, and ethical frameworks addressing privacy and security concerns. This research provides strategic guidance for logistics managers, policymakers, and technology investors seeking to leverage UAV capabilities for competitive advantage in global supply chains.

Keywords: Unmanned aerial vehicles; UAV logistics; Cost leadership strategy; Last-mile delivery; Supply chain management; Logistics 4.0; Beyond Visual Line of Sight (BVLOS); Regulatory framework