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.