Today, container ships transport more than 90 per cent of all goods in the world and more than 4 trillion dollars worth of goods annually. But it can take over a month for those goods to sail from Beijing to New York.
By land, trucks move nearly 71 per cent of all freight tonnage in the United States. Problem is, there’s a shortage of truck drivers in the U.S.
So how do you speed up shipments while keeping personnel low?
The future of shipping looks very much unmanned. Anything that has high levels of customization, anything that’s unpredictable, that should be done by air.
Many startups believe the answer is autonomous flying cargo drones that can carry heavy loads and fly long distances.
All around the world, millions of people are benefiting from drones already, and we’re just at the tip of the iceberg.
The global drone logistics and transportation market accounted for more than USD 10 billion in 2020 and that number is excepted to grow to USD 29.06 billion in 2027.
These drones could be the disruption needed in a global supply chain that has been largely unchanged since the 1950’s.
How drones will transform the freight industry
Getting large shipments of products across large distances is difficult. That’s why Malcolm McLean created the shipping container in 1956.
This standardize the shipping industry and allowed shipping to scale in ways that weren’t possible before.
For a typical product that is being shipped from overseas and then received within the United States, would involve trucking, ocean freights, in some cases we are seeing the emergence of more rail being used as it’s becoming a more reliable mode of transportation.
But now, with programs like Amazon’s one-day shipping, consumers are looking for goods to get to them faster. That means the standard shipping methods – ships and trucks – have to be re-evaluated.
There is seemingly insatiable demand for this right away by consumers and that just keeps growing and people become increasingly impossible over time.
What seems like is the supply chains, which are wildly complex, are built around the timeliness of air freight. But the cost per item for air freight is significantly more expensive when compared to sea and ground shipping.
We are at the point where you really need to have those high-value goods or some kind of an emergency shipment would be an ideal candidate for air freight because it cost so much.
In the United States in 2016, 11.6 billions tons of good were shipped via truck, 1.8 billion tons were shipped via train, 740 million tons were shipped via a cargo ship and only 5 million tons were shipped via airplane.
But using autonomous flying cargo drones to ship goods might bump that number up.
Air freight is actually a mode of transportation that has increased dramatically. It’s still a small percentage of all freight being moved, but if you look at the percentage change over the years, air freight has been gorging more rapidly.
Big reason for that is the growth of e-commerce.
If you are living in a small village and you want to ship goods and be a part of a global economy, often your freight link is by road or rail and it takes quite some time for your goods to be transmitted around the world.
So when we bring autonomy and scale into aviation, every community can be connected with the rest of the world through a airborne freight link.
And that means massive potential for economic growth in communities all over the world.
The main challenge is volume. You just can’t lift as much weight into the air as you can floated along the sea, especially if you are trying to use battery powered vehicles like many of the smaller drones we see today. Current battery technology is incredibly heavy.
Volansi, a drone company that has been working in this space since 2015 created a hybrid vehicle that uses electric power to take off vertically, then standard fuel to fly off horizontally.
So, if you build an all-electric vehicle, you have a 85 per cent mass fraction on the batteries which means you can carry 15 per cent the rest of the weight in payload, which doesn’t really make sense for cargo delivery.
See, the more volume you carry, the cheaper shipping becomes, even if that means travelling longer distances.
Going in from Shanghai as an example, to the United States might take about 28 days by ship, whereas by airplane it’ll only take 14 hours.
But still, ships are cheaper.
A medium sized 2,000 pound box from Shenzhen, China to New York can cost $1,200 by ocean, while $4,000 by air.
Natilus is working on getting that volume up and the costs down by using jet fuel powered drones to autonomously fly goods long distances, like across the ocean.
The company is building large-scale unmanned aircraft the size of Boeing 747s to reduce global air freight costs by 50 per cent. It will do this by using a uniquely shaped vehicle designed for cargo, not passengers, unlike other air freight carriers.
When Boeing and Airbus design airplanes meant for passengers, whatever falls out is what the freight aircraft looks like and they are not really optimized on volume. Natilus also wants to utilize pilots more effectively. Instead of having two pilots on one single flight, it hopes to use one pilot managing multiple flights remotely.
There’s a huge bottleneck with pilots today, which is limiting the expansion of air freight as well as passenger freight.
Companies like Volans-i have already started making deliveries in places like the Bahamas, a particularly difficult area for deliveries because of the large distances between islands. The company’s goal is to alleviate the shipping strains of high need, expensive shipping; like when a specific part needs replacing on a production line, and it needs to be replaced quickly since times is money.
Other companies are trying to lighten the load of the ever critical last mile delivery. That’s the portion of the shipping process that gets the product from its last warehouse or shipping hub to your door, and trying to hasten the delivery of medical supplies and samples for testing.
Zipline has been delivering supplies in Rwanda since 2016, Ghana since April of 2019 and is expanding its services to the U.S. this year.
UPS has teamed up with drone startup Matternet to quickly ship medical supplies from a North Carolina hospital to labs for testing.
News of these delivery drones has been flying around for years. Prime Air, Amazon’s drone delivery system, can fly up to 15 miles and deliver packages under five pounds to customers in under 30 minutes.
For now the biggest thing that’s pacing the development of the drone industry is regulation. FAA regulations are still pretty strict on these autonomous flying vehicles, and that has created a challenge for these drones.
Competition for airspace is becoming more and more heated as drones of all sizes take to the air. There have been some restrictions by the FAA that have restricted the use of drones for delivery to consumer homes and that something that needs to be overcome.
Autonomy brings a whole new set of public concerns, just as we’ve seen with self driving cars, because the public has grown to appreciate the safety and the assurance of being able to fly from one place to another. The regulators are hesitant to permit new technologies from entering the airspace until they are really proven satisfactorily.
Another big concern when it comes to automation is jobs. As you hear some of the challenges related to drones, that’s one of thing that come up often. There would be this whole workforce needed to be able to manage this drone network.
This technology could help alleviate some of the worker shortages that the shipping industry is facing.
Customers, shipper and regulators all see the promise in these autonomous flying vehicle for emergency deliveries, for incredibly high speed home deliveries and even for large shipments of goods.
There’s a great opportunity here with unmanned cargo aircraft to start proving out some of the technologies in a lower risk environment without people on board, and these same technologies can eventually be introduced to the aircraft that we will use for flying around cities to and from work.