How Drones Could Change The Shipping Industry

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10:00   |   Jul 23, 2019


How Drones Could Change The Shipping Industry
How Drones Could Change The Shipping Industry thumb How Drones Could Change The Shipping Industry thumb How Drones Could Change The Shipping Industry thumb


  • 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.

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Today, container ships transport more than 90% of all goods in the world, but it can take over a month for those goods to sail from Beijing to New York. Cargo drones could be the disruption needed in a global supply chain that has been largely unchanged since the 1950s.

By land, trucks move nearly 71 percent of all freight tonnage in the United States, but there's a shortage of truck drivers in the United States. So how do you speed up shipments while keeping personnel low? The future of shipping looks very much unmanned.

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How Drones Could Change The Shipping Industry