WCS looks to the future with drones, world market

Andreas Raptopoulos, CEO for Matternet, captured the World Cargo Symposium’s attention when he flew a drone in front of the audience.

The whirr filled the quiet room, and audience members recorded the drone on their phones.

“We think we can create a new kind of transportation paradigm,” Raptopoulos told the audience.

One billion people have no access to all-season roads, making it difficult for them to transport goods to markets and receive medicine, he said. For example, there are many remote places in Canada where it’s challenging to transport anything in the winter.

Matternet wants to connect unmanned aerial vehicles (UAVs), which travel short distances, into a bigger network called Matternet in order to meet the world’s transportation needs.

Every UAV would be able to land at a station and swap a load and battery without a human touching it, Raptopoulos explained.

Besides rural areas, UAVs will also have uses in cities and megacities.

“These are places that have road infrastructure, but usually those are very highly congested,” Raptopoulos said.

Matternet wants to set up a drone network for cities. At first, it will fly medical goods and later, when it’s more reliable, commercial deliveries.

“When we think about designing the future of our cities, we think this is a solution,” he said.

UAVs also do not have a large carbon footprint.

But a few challenges to making a drone network a reality is reliability, safety and airspace management concerns, he said.

“Can we build for transportation what telecommunications did for the spread of information?” Raptopoulos asked. “We believe that this can be a big deal in transportation.”

After Raptopoulos finished his speech and attention-grabbing demonstration, IATA chief economist Brian Pearce talked about more sobering statistics in the airfreight industry – how up until recently, cargo revenues have moved in line with passenger revenues.

“The remarkable thing in the past three years has been our experience in the cargo business when compared to the passenger business,” Pearce said.

Typically, revenues would be expected to reach US$20 billion more than they do today, he said.

“Does that mean we have to rethink business models?” Pearce asked.

Reasons for this include modal shift and on-shoring of manufacturing, he said. Off-shoring was more efficient until the latest recession, but since then, the global economy has been supplied by products made at home, Pearce said.

“Our long-term expectations for substantive expansion, it probably depends on our expectation that international trade is going to grow much faster than domestic,” he said.

On another note, he said e-commerce, which is transforming the retail business, is also critical for airfreight.

A new challenge for the air cargo industry is also weaker world trade, partly due to protectionism. Pearce said this isn’t tariffs so much as policies focused on buying locally.

“Governments are concerned with maintaining jobs at home,” he said.

Pearce named fuel efficiency and carbon-neutral growth as key issues over the next few years.

“We face the risk of governments and regulations imposing costs on our industry,” he said.

But in speech full of negatives, Pearce noted a few positives. Even with air cargo still growing slowly, there are encouraging signs, such as improved business confidence and the demand cycle turning up.

“I think it’s looking good,” Pearce said. “It’s heading up now.”