Logistics of the Future

Air cargo: Don’t think of it as the “little brother” to passenger planes. While the industry may be in the shadow of passenger airlines or maritime logistics, the rapid rise of e-commerce has seen air cargo grow in size and importance over the past few years. The industry accounts for an average of 51.2 million tonnes being moved every year, and that number is only increasing.

According to the International Air Transport Association (IATA), air cargo demand grew by 3.5 percent in 2018 as measured by freight-tonne kilometers, and the IATA’s latest Business Confidence Survey said airlines expect freight volumes to continue increasing in 2019. Demand is such that Boeing is increasing the production of the Boeing 767 Freighter to three airplanes per month in 2020 – their third rate-hike on the model, which represents a doubling of production since 2016. Not only are traditional air cargo methods increasing, but NASA is also estimating that there will be 2.6 million commercial drones in the skies by 2020.

Air cargo is innovating and moving ahead rapidly, but it should be noted that it is still by far the most expensive method of shipping: Air cargo accounts for just 1 percent of global shipping by volume but 35 percent of it by cost. Startups in this space are always devising new ways to combat such costs and boost efficiency for the benefit of both the consumer and the logistics/transport company.

While many maritime shipping startups have already dived into digital booking platforms, the air cargo industry has lagged behind when it comes to booking transparency. That all changed in 2018 when one of the most promising air cargo startups, SkySpace released its online trading platform which, with its unique partnerships of over 100 connected airlines, is attempting to bring new pricing transparency into the air cargo industry.

For smaller and medium-sized freight forwarders, this is a game-changer. Previously, this industry was ruled by big brokers, handshake deals, and even large freight forwarders who decided the pricing for themselves. With the introduction of SkySpace’s completely neutral platform and routes from 50,000 flights, smaller freight forwarders can finally have the chance to compete with bigger players.

Last-mile delivery has always been one of the costliest aspects of the logistics industry. And with the introduction of commercial drones, now it has become one of the most competitive aspects of drone delivery startups. But Matternet has set itself apart with its drone delivery technology: It was selected by the FAA to test unmanned aerial networks in the U.S. – a rare feat, considering only ten programs in the country have been allowed by the FAA to run these trials.

Designed exclusively for transportation, Matternet operates by connecting smart drones, cloud software, and safe ground stations to an intuitive mobile app — and they aim to do it at a fraction of the cost of any other current method of transportation. They aim to deliver everything from critical health supplies to areas in need, to common items such as prescription drugs or milk from the grocery store. A $16 million Boeing-led investment in 2018 shows that this startup is well on its way to success as a pioneer in the drone industry.

Imagine an airfreight economy in which every aircraft was flown autonomously, fuel-efficient, and could land on short and unpaved runways. Being one of the best European air cargo startups, DRONAMICS wants to make all of this and more possible through its new type of cargo airplane, The Black Swan. This new aircraft can transport 350 KG at a distance of 2,500 kilometers (or 1,550 miles) for a cost that’s 50 percent or lower than other airplanes. It can also be monitored and managed completely remotely via satellite.

By developing drone ports, making use of small airfields, and training local personnel as drone and logistics operators, DRONAMICS believes it can transform the air cargo industry, and economy, completely. Svilen and Konstantin Rangelov, the founding brothers of the startup, say the final Black Swan model will cost less than $100,000. Their goal is not only to produce the aircraft but also to operate them together with local airlines in emerging domestic markets in Asia, Africa, and Latin America, regions that have plenty of potential in the air cargo and drone industry.

For those in the air cargo industry, there’s almost nothing worse than being told that a flight is delayed – a recurring problem that ultimately can create delays in the delivery of goods overall. The Swiss startup Assaia is aiming to reduce the number of delayed flights and improve turnaround time for both cargo and passenger flights by changing how ground crews and airports operate. It's AI technology generates timestamps, predictions of key turnaround events, and preventative hazard alerts.

Air carrier delays caused by crews servicing planes accounted for nearly 4.5 percent of all airplanes running late in December 2018. If Assaia’s machine learning and GPU technology can reduce this number, airlines can see a boost in profits while cargo shipments get to their destinations on time.

The future of air cargo is here, and it has arrived in the form of drone delivery. In the U.S. alone, this type of delivery increased from a $40 million industry in 2012 to $1 billion in just five years. Founded in 2013, Flirtey became the first service of its kind to complete an FAA-approved drone delivery in the U.S. – and in 2018, they were named to the CNBC Disruptor 50 list, an annual ranking of the most ambitious and innovative companies in the world.

Flirtey hopes to dominate the entire industry by providing everything from food and retail services to medical and e-commerce delivery. They’re even aiming to save lives with a partnership that will launch the first automated external defibrillator (AED) sent by drones in the U.S. As the industry grows ever-closer to becoming legal around the world, businesses will be able to partner with Flirtey to use its drones in a new logistics market and further drive sales.

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