Leap Frog Into The Future
Transportation Infrastructure Paves The Way
Investment in transportation infrastructure reduces costs, increases access to markets and resources, and facilitates trade.
“……the system of private property is the most important guarantee of freedom, not only for those who own property but scarcely less for those who do not.” - F. Hayek
Cargo
11.4 billion tons of freight are shipped in the United States each year, which translates to over 2.7 million truck journeys per day. A study by the University of California, Los Angeles (UCLA) found that the cost of cargo delivery by truck can range from $2 to $5 per pound, depending on the type of cargo and the distance travelled. Over 3.8 million trucks are registered in the United States, with a total fleet of over 12 million. The trucks on the roads of the United States are doing over 700 billion miles a year.
The fatality rate for large trucks is ~1.5 fatalities per 100 million miles travelled. 37% of fatalities related to large trucks occurred on highways, while 28% occurred on urban roads, and 35% occurred on rural roads
A Better Way
The global cargo drone market is expected to reach 1.4 million units by 2027, up from 220,000 units, and reach a market size of $13.6 billion by 2027, up from $2.5 billion in 2020. Cargo drones can have a range up to 1500 miles and a payload capacity of over 1000 pounds. Some can take off vertically and fly autonomously or need very short runways. Drones are safer than trucks, are programmed to avoid collisions, and have safety mechanisms to ensure they can be grounded safely if they have an issue.
Cargo drones will improve transportation by reducing fuel consumption, lowering emissions, and increasing efficiency. Compared to traditional trucks, cargo drones save up to 70% of fuel costs.
States that embrace this market, utilize their air rights, and help private air rights owners monetize their airspace will win. Not only are the efficiencies up for grabs but so is the manufacturing industry.
In contrast with autonomous trucks, a report by McKinsey estimates that autonomous trucks could reduce labour costs by up to 20% and improve safety by up to 50%. A report by the International Transport Forum notes that deploying autonomous trucks will require significant infrastructure investment, including installing dedicated lanes and developing new traffic management systems. These trucks will play a role, but the barriers are high, and drone technology can leap ahead.
Cargo drones also need infrastructure, but this is less invasive. Air rights owners and land owners will provide the locations for this infrastructure. These decentralized owners benefit from the cost savings of a developing industry, which aligns incentives for communities and industry.
A significant barrier to drone adoption is the lack of permission to be in private air space and the unwillingness of private air rights owners to permit drone transit without an incentive. Bringing these air rights owners into the ecosystem with state-level highway air rights creates an unprecedented unlock that delivers wealth to states, cities, towns, and communities.
New York Developments
Infrastructure is required for flying cars, aka eVTOLs. They need locations to take off and land and places to charge. Most importantly, they need these elements of the industry's infrastructure in the places where the customers are.
Recently, in NYC, the 34th Street heliport was being developed to enable flying cars to take off, land, and recharge. This is good but remarkably unambitious. It will effectively replace helicopters with electric helicopters.
It's not ambitious enough, as we need to network vertiports (modern heliports) in multiple communities; however, it does show definitive evidence of industry development.
The future is ever closer and New York air rights valuations are compounding as the use cases for air rights increase, including infrastructure requirements and transport.
The Future
States have enacted laws that allow cities to lease air rights above roads. Real estate owners control their air rights, setting the stage for drone highway development. Faster parcel delivery, improved distribution of medical supplies, job creation in the technology and logistics sectors are all net positive.
Allowing transit through air rights over decentralized physical infrastructure for a return is a long-term reward. Allowing drone pads, vertiports, and charging stations for the AAM industry to be developed on rooftops and backyards allows the industry to expand at scale. Individuals acting in their self-interest has positive implications for society.
When one air rights owner signals a price they are willing to accept for a drone station or flight, it shows the drone industry where it needs to go to expand.
The individuals invested in the industry will order more products from commercial entities that use drones, creating a virtuous circle. As the number of drone flights and the infrastructure to support them increases, so do the economic benefits to the community.
The future is closer than you think. It’s an excellent time to buy air rights.
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