Booms, Busts, Trucks And Drones
Ground to Air, The Evolving Trends in Cargo Transportation
Hi all, thanks for reading, if you’re interested in finding out more about how to help open the skies for a better world of transportation, you can reach me at Jonathan@sky.trade
Bubbles Burst
America's trucks carry a staggering 72.5% of the nation's freight by weight. In 2021 alone, the trucking industry, comprising 3.5 million employed drivers and over a million carriers, generated an impressive $875.5 billion in revenue.
The scale is enormous, with 1,102,799 for-hire carriers and 718,594 private carriers navigating the vast American road network. Interestingly, 91.5% of carriers operate with six trucks or fewer, emphasizing the prevalence of smaller enterprises in this sector. All paying their tolls.
In or around 4 million vehicles moved ~11 billion tons of freight in 2021. To put this in perspective, if trucks were to stop moving, store shelves would be bare within three days. Not only groceries, medical supplies, ATM cash, and even gas supplies would dwindle, illustrating the industry's critical role in maintaining the nation's essential services and the risk it poses in its current centralised makeup.
The trucking workforce is substantial and largely unionised, with 2,094,700 jobs sustaining the industry. Truck drivers' median salary is $47,130 per year, with 91% of them engaged in full-time roles. The salaries for truck drives are 34% of freight trucking costs.
While 2020 saw a dip in freight movement due to the pandemic-induced economic ‘recession’, 2021 bounced back, with trucks transporting the largest freight volume in six years. The industry's revenue surged to $875 billion in 2021, marking the first significant growth since 2018.
The American Trucking Association repeatedly said that the industry was short ~90,000 drivers, fuel was added to the fire and the Trucking Action Plan was launched in late 2021 to draw more drivers into the industry.
Companies that were paying $1.85 a mile in early 2020 were paying $3.10 a mile by late 2021 which motivated people who had never been in trucking to hop on the bandwagon. Drivers who were working for larger companies raked up debt and got their own trucks so they could become independent owner-operators and work for themselves. But it’s not for the faint-hearted, in 2021, for example, 4,714 people died in crashes involving large trucks, a 14% increase from 2019. Long hours away from loved ones leads to high attrition rates and the bust pierces the booming bubble again.
Enter The Drones
Several drone companies are trying to develop their systems to be able to carry cargo across distances which would relieve some of the road haulage pressures. New jobs in a growth industry for improved transportation will become a reality if the powers that be move out of the way.
Droneamics
Dronamics is a cargo drone airline licensed to operate in Europe and Qatar Airways Cargo, the international cargo carrier, unveiled an interline agreement. This strategic pact expands the delivery networks of both entities but also facilitates access to challenging locations for conventional freight. Dronamics, which is based in Greece, can now extend cargo services from what it calls, droneports, to Qatar Airways Cargo's extensive network.
It covers destinations like Singapore, China (including Hong Kong), and the United States (JFK). Simultaneously, Qatar Airways Cargo gains entry to remote locations, particularly the Greek islands, serviced by the Dronamics cargo drone network.
Customers of Dronamics can book cargo services from any available droneports, if there was a network of them, to destinations covered by the reach. This develops an efficient flow of goods ranging from pharmaceuticals to food, e-commerce shipments, mail, parcels, and spare parts for machinery.
Less than 1% of global trade moves by air but with Qatar Airways Cargo and their capacity, Dronamics can expand air cargo accessibility to more communities worldwide and widen the window for same-day delivery.
They claim they can deliver 80% faster, 50% cheaper and with 60% lower emissions than conventional road-based cargo transportation which is an amazing statistic considering the amount of cargo transportation and what level of improvement their can be.
Using drone corridors, through SkyTrade, controlled by property owners, income generation for individual landowners, when it’s at scale, is immense.
Commercial operations will be in Greece early next year, aiming to establish a same-day service connecting Athens with the industrial north and the southern islands.
Eanan Aviation
The UAE start-up wants to redefine air mobility, it was founded by a consortium of Emirati and European executives. Eanan Aviation recently launched the S-120 and S-700, its electric Verticle Take Off and Landing (eVTOL) vehicles aimed at the cargo market.
With cargo, weight is a major factor as it is directly related to energy consumption and costs. The S-120 has a 50 kg payload capacity and a 30 km range. The S-700 has a 200 kg payload capacity, although specific range details are yet to be disclosed for this model. As the demand for cargo transportation solutions continues to rise, Eanan Aviation with its highly ambitious cargo drones is looking to be at the forefront of industry developments in the Middle East and beyond.
California Cargo Drones
Elroy Air's Chaparral C1, an autonomous turbogenerator-hybrid electric vertical take-off and landing cargo drone, has completed its maiden flight. It took place on November 12 at Byron Airport in Northern California.
The Chaparral C1, was designed to revolutionize express shipping, humanitarian logistics, and military resupply. Its demo showed it ascending vertically, for about a minute, and executing a safe landing. It has a cargo capacity of 300lbs (136kg), and a range of up to 260nm (482km).
The company has three active contracts with the US Air Force, emphasizing its potential for supporting military resupply missions. The Chaparral's autonomous cargo delivery capabilities have the potential to be a game-changer for the United States military and allied forces.
They already have orders (LOIs) for over 1,000 vehicles and have secured commitments from various sectors, including Mesa Airlines, Bristow, and FedEx. It wants to position itself as a leader in autonomous cargo drone technology with applications in military, commercial and humanitarian contexts.
A Developing Industry
Now that truckers are competing against one another it’s driving rates down, the narrative about a truck driver shortage has disappeared.
The amount of freight being moved is roughly equivalent to what it was in 2019. With the advent of new cargo drone technology, the ~34% wage overhead that the industry has to push down to the end consumer can be severely dented.
People want to protect jobs, and unions and politicians must do right by their constituents to get voted back in. However, if long-term hats were put on, is this the best way to do it?
Many people don’t want to drive trucks, contrary to what some loud voices proclaim. Many drivers are walking away. It’s time to reboot thinking in the area of cargo transportation.
Thank you for reading, to learn more about how air rights can generate passive income to develop transportation in low altitudes please contact me at jonathan@sky.trade
