DRONE SHIPPING

 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. But the problem is, there are a shortage of truck drivers everywhere. 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 could 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 standardized 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 country, that 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 a seemingly high 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.

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.

But 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. 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.

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.

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.

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. 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. I think that there is 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.