Today, container ships transport more than 90 percent 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 percent 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 24 million dollars in 2018, and that number is expected to
grow to 1.6
billion dollars in 2027.
These drones could be the disruption needed in a global supply chain
that has been largely unchanged since the 1950's.
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, that would involve trucking, ocean
freights, in some cases we're 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 a seemingly insatiable demand for things right away by
consumers and that just keeps growing and people become increasingly
impossible over time.
What it 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're 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
billion tons of goods 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 growing much more rapidly.
I think a big reason for that is the growth of e-commerce.
If you're 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 I think that 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're trying to use battery powered
vehicles like many of the smaller drones we see today. Current
battery technology is incredibly heavy. Volans-i, 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 an 85 percent mass
fraction on the batteries.
So that means you can carry 15 percent 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 traveling 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, but it can cost $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.
Natilus is building large-scale unmanned aircraft the size of Boeing
747s to reduce global air freight costs by 50 percent.
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're not
really optimized on volume.
It 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.
But Natilus is still not ready to get its cargo drones into the air
for deliveries.
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 time is
money.
I started Volans-i out of a problem that I saw while working at Tesla.
So imagine the Model 3 assembly line goes down for one hour. That
costs the business hundreds of thousands of dollars, in some cases
millions of dollars.
And at that point, the companies and businesses are motivated to get
that up-time and get the line going again at any cost.
And Volans-i is trying to help with that business and with that
problem.
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 service 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.
I think we can use this type of system to massively improve
health care in the country.
So imagine when you have to get that lab result back, how crucial it
is to get it on time.
And with a system like this, we can deliver the samples and then the
results much faster than we can do it with the traditional
transportation methods today.
But news of these delivery drones has been flying around for years.
Prime Air, Amazon's drone delivery system, was teased back in 2013
and it still hasn't rolled out the program, though Amazon recently
announced that it will launch delivery drones within months.
We're building fully electric drones that can fly up to 15 miles and
deliver packages under five pounds to customers in under 30 minutes.
Well, the biggest thing I believe 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, you know, that's
something that needs to be overcome and they're continuing to work
on.
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
the things I've heard come up.
There would be this whole workforce needed to be able to manage this
drone network.
But this technology could help alleviate some of the worker shortages
that the shipping industry is facing.
I think what you're seeing today, the airline sector, for example, has
a massive pilot shortage and it's forecasted to only get worse than
the number of people that are going to be traveling by air is
expected to double over the next 15 years.
But customers, shippers and regulators all see the promise in these
autonomous flying vehicles for emergency deliveries, for incredibly
high speed home deliveries and even for large shipments of goods.
So I think that there's 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.
And I'm really excited about skipping the terrestrial traffic as
well.