Victoria Kickham started her career as a newspaper reporter in the Boston area before moving into B2B journalism. She has covered manufacturing, distribution and supply chain issues for a variety of publications in the industrial and electronics sectors, and now writes about everything from forklift batteries to omnichannel business trends for DC Velocity.
Research, development, and testing of large-cargo aerial drones—those capable of carrying more than just a few pounds of freight—continues around the world, but one European company is close to making commercial delivery operations a reality.
Cargo drone airline Dronamics will provide remotely controlled drone deliveries with its Cessna-sized Black Swan aircraft for Qatar Airways Cargo, in a partnership the companies announced late last year. The deal expands the reach of both airlines and furthers Dronamics’ goal of providing middle-mile logistics service that company leaders say not only speeds delivery and reduces costs but also gives remote and underserved locations around the world access to more frequent deliveries.
“[We] connect smaller places that may not have direct transport links,” says Severina Grozeva, global communications director for London-based Dronamics, which was founded by two brothers from Bulgaria in 2014 and maintains offices in the country’s capital, Sofia. Grozeva explains that the drones can land in small, unpaved areas that are unreachable by larger aircraft. “[The drones] will land at a small airport, regional airport, airfields. Eventually, we have plans for them to land near [warehouses] and manufacturing facilities.”
She adds that the drones can get a “meaningful” amount of cargo to remote locations for subsequent delivery to homes and businesses, explaining that the middle-mile drones deliver cargo “close to the business and close to the consumer, but not in your backyard.”
Dronamics expects to begin delivering for Qatar Airways Cargo later this year—first in Greece, where they will connect Athens with customers in the country’s northern industrial area as well as the islands in the south.
COVERING MORE DISTANCE
To date, most of the headway in drone delivery has been made in last-mile logistics, delivering small orders of retail merchandise or medicine to customers’ homes. Walmart has made strides in this area, announcing in January an expansion of its drone delivery program in Texas; the service will reach nearly 2 million households in the Dallas-Fort Worth area by the end of this year. Last-mile drones have also gotten traction in health care, delivering medicines, blood samples, and vaccines to medical facilities around the world. Autonomous delivery company Ziplineexpanded its work in that area in February, in a partnership with WellSpan Health in Pennsylvania. In both cases, the solutions offer small autonomous or remotely controlled airborne vehicles capable of delivering a few pounds of cargo up to a few hundred miles.
Dronamics’ planned service is different in size and scope. The Black Swan middle-mile drone can deliver 770 pounds of cargo up to 1,550 miles. Its fuselage is maximized for freight—it has no cockpit, giving the drone a maximum storage capacity of 125 cubic feet. Essentially, it holds about the same amount as a small delivery van, Grozeva explains. Technicians control the drones via a remote cockpit. The system requires a short runway for takeoff and landing, about 1,300 feet—paved or not. The idea is that the service will eliminate the need to use multiple trucks and vans to transport freight, replacing them with a service that can get the cargo closer to the consumer, faster.
Dronamics says its drones can deliver cargo up to 80% faster, 50% cheaper, and with up to 60% lower emissions than traditional modes of transportation, including air freight. The Black Swan runs on a conventional engine, but its frame and size help make it more fuel-efficient, Grozeva says, adding that the company is working toward using sustainable fuels, including biofuel, hydrogen, and synthetic-based formulations.
The company has been testing its drones for a few years and launched its first full-scale flight in 2023. Early customers include freight forwarders and logistics service providers— Germany’s Hellmann Worldwide Logistics and global package delivery service DHL are two examples—but Grozeva says Dronamics also plans to work directly with companies and brands that move large volumes of cargo. The agreement with Qatar Airways Cargo is its first partnership with an international airline—and Dronamics claims it’s an industry first as well.
DEMOCRATIZING DELIVERY
Air freight represents a small portion of the total cargo moved around the world annually, but leaders at Dronamics say middle-mile cargo drones will help broaden that market. On top of that, they say middle-mile drones can bring next-day delivery to more people in more places around the world, which will benefit those in less-developed regions as well as those in remote areas—like the Greek islands, where many businesses and consumers receive only weekly deliveries of essential goods, via ferry, much of the year.
“There are a lot of geographies like that,” Grozeva explains. “People say to us, ‘This is a great solution for the less-developed world’ … but there is a lot of opportunity in the developed world as well.”
Dronamics refers to its business proposition as “enabling same-day delivery to everyone, everywhere.”
Although Dronamics’ work has focused on Europe to date, the company is currently testing its service through a DHL partnership in Australia and eventually plans to break into the U.S. market.
Market trends may help make those goals a reality. The delivery drone market is expected to grow considerably over the next several years, by some estimates reaching a compound annual growth rate (CAGR) of around 40% by 2030—driven largely by demand for faster, more sustainable delivery as well as advances in drone technology. Small, last-mile delivery drones will make up the bulk of the growth, but drones that can transport heavier loads are making strides as well. A 2023 report from Allied Market Research points to the integration of cargo drones into middle-mile logistics as a key trend moving forward.
“Improvements in battery technology, sensors, machine learning algorithms, and materials have enhanced the capability of cargo drones,” according to the report. “With longer flight times, heavier payloads, and greater autonomy, cargo drones have become more efficient and effective than traditional delivery methods.”
Leaders at Dronamics agree.
“[This is] still considered a niche market,” Grozeva says, emphasizing the long-term potential of middle-mile drones. “But it’s interesting in terms of what it can do to help businesses become more competitive.”
Congestion on U.S. highways is costing the trucking industry big, according to research from the American Transportation Research Institute (ATRI), released today.
The group found that traffic congestion on U.S. highways added $108.8 billion in costs to the trucking industry in 2022, a record high. The information comes from ATRI’s Cost of Congestion study, which is part of the organization’s ongoing highway performance measurement research.
Total hours of congestion fell slightly compared to 2021 due to softening freight market conditions, but the cost of operating a truck increased at a much higher rate, according to the research. As a result, the overall cost of congestion increased by 15% year-over-year—a level equivalent to more than 430,000 commercial truck drivers sitting idle for one work year and an average cost of $7,588 for every registered combination truck.
The analysis also identified metropolitan delays and related impacts, showing that the top 10 most-congested states each experienced added costs of more than $8 billion. That list was led by Texas, at $9.17 billion in added costs; California, at $8.77 billion; and Florida, $8.44 billion. Rounding out the top 10 list were New York, Georgia, New Jersey, Illinois, Pennsylvania, Louisiana, and Tennessee. Combined, the top 10 states account for more than half of the trucking industry’s congestion costs nationwide—52%, according to the research.
The metro areas with the highest congestion costs include New York City, $6.68 billion; Miami, $3.2 billion; and Chicago, $3.14 billion.
ATRI’s analysis also found that the trucking industry wasted more than 6.4 billion gallons of diesel fuel in 2022 due to congestion, resulting in additional fuel costs of $32.1 billion.
ATRI used a combination of data sources, including its truck GPS database and Operational Costs study benchmarks, to calculate the impacts of trucking delays on major U.S. roadways.
There’s a photo from 1971 that John Kent, professor of supply chain management at the University of Arkansas, likes to show. It’s of a shaggy-haired 18-year-old named Glenn Cowan grinning at three-time world table tennis champion Zhuang Zedong, while holding a silk tapestry Zhuang had just given him. Cowan was a member of the U.S. table tennis team who participated in the 1971 World Table Tennis Championships in Nagoya, Japan. Story has it that one morning, he overslept and missed his bus to the tournament and had to hitch a ride with the Chinese national team and met and connected with Zhuang.
Cowan and Zhuang’s interaction led to an invitation for the U.S. team to visit China. At the time, the two countries were just beginning to emerge from a 20-year period of decidedly frosty relations, strict travel bans, and trade restrictions. The highly publicized trip signaled a willingness on both sides to renew relations and launched the term “pingpong diplomacy.”
Kent, who is a senior fellow at the George H. W. Bush Foundation for U.S.-China Relations, believes the photograph is a good reminder that some 50-odd years ago, the economies of the United States and China were not as tightly interwoven as they are today. At the time, the Nixon administration was looking to form closer political and economic ties between the two countries in hopes of reducing chances of future conflict (and to weaken alliances among Communist countries).
The signals coming out of Washington and Beijing are now, of course, much different than they were in the early 1970s. Instead of advocating for better relations, political rhetoric focuses on the need for the U.S. to “decouple” from China. Both Republicans and Democrats have warned that the U.S. economy is too dependent on goods manufactured in China. They see this dependency as a threat to economic strength, American jobs, supply chain resiliency, and national security.
Supply chain professionals, however, know that extricating ourselves from our reliance on Chinese manufacturing is easier said than done. Many pundits push for a “China + 1” strategy, where companies diversify their manufacturing and sourcing options beyond China. But in reality, that “plus one” is often a Chinese company operating in a different country or a non-Chinese manufacturer that is still heavily dependent on material or subcomponents made in China.
This is the problem when supply chain decisions are made on a global scale without input from supply chain professionals. In an article in the Arkansas Democrat-Gazette, Kent argues that, “The discussions on supply chains mainly take place between government officials who typically bring many other competing issues and agendas to the table. Corporate entities—the individuals and companies directly impacted by supply chains—tend to be under-represented in the conversation.”
Kent is a proponent of what he calls “supply chain diplomacy,” where experts from academia and industry from the U.S. and China work collaboratively to create better, more efficient global supply chains. Take, for example, the “Peace Beans” project that Kent is involved with. This project, jointly formed by Zhejiang University and the Bush China Foundation, proposes balancing supply chains by exporting soybeans from Arkansas to tofu producers in China’s Yunnan province, and, in return, importing coffee beans grown in Yunnan to coffee roasters in Arkansas. Kent believes the operation could even use the same transportation equipment.
The benefits of working collaboratively—instead of continuing to build friction in the supply chain through tariffs and adversarial relationships—are numerous, according to Kent and his colleagues. They believe it would be much better if the two major world economies worked together on issues like global inflation, climate change, and artificial intelligence.
And such relations could play a significant role in strengthening world peace, particularly in light of ongoing tensions over Taiwan. Because, as Kent writes, “The 19th-century idea that ‘When goods don’t cross borders, soldiers will’ is as true today as ever. Perhaps more so.”
Hyster-Yale Materials Handling today announced its plans to fulfill the domestic manufacturing requirements of the Build America, Buy America (BABA) Act for certain portions of its lineup of forklift trucks and container handling equipment.
That means the Greenville, North Carolina-based company now plans to expand its existing American manufacturing with a targeted set of high-capacity models, including electric options, that align with the needs of infrastructure projects subject to BABA requirements. The company’s plans include determining the optimal production location in the United States, strategically expanding sourcing agreements to meet local material requirements, and further developing electric power options for high-capacity equipment.
As a part of the 2021 Infrastructure Investment and Jobs Act, the BABA Act aims to increase the use of American-made materials in federally funded infrastructure projects across the U.S., Hyster-Yale says. It was enacted as part of a broader effort to boost domestic manufacturing and economic growth, and mandates that federal dollars allocated to infrastructure – such as roads, bridges, ports and public transit systems – must prioritize materials produced in the USA, including critical items like steel, iron and various construction materials.
Hyster-Yale’s footprint in the U.S. is spread across 10 locations, including three manufacturing facilities.
“Our leadership is fully invested in meeting the needs of businesses that require BABA-compliant material handling solutions,” Tony Salgado, Hyster-Yale’s chief operating officer, said in a release. “We are working to partner with our key domestic suppliers, as well as identifying how best to leverage our own American manufacturing footprint to deliver a competitive solution for our customers and stakeholders. But beyond mere compliance, and in line with the many areas of our business where we are evolving to better support our customers, our commitment remains steadfast. We are dedicated to delivering industry-leading standards in design, durability and performance — qualities that have become synonymous with our brands worldwide and that our customers have come to rely on and expect.”
In a separate move, the U.S. Environmental Protection Agency (EPA) also gave its approval for the state to advance its Heavy-Duty Omnibus Rule, which is crafted to significantly reduce smog-forming nitrogen oxide (NOx) emissions from new heavy-duty, diesel-powered trucks.
Both rules are intended to deliver health benefits to California citizens affected by vehicle pollution, according to the environmental group Earthjustice. If the state gets federal approval for the final steps to become law, the rules mean that cars on the road in California will largely be zero-emissions a generation from now in the 2050s, accounting for the average vehicle lifespan of vehicles with internal combustion engine (ICE) power sold before that 2035 date.
“This might read like checking a bureaucratic box, but EPA’s approval is a critical step forward in protecting our lungs from pollution and our wallets from the expenses of combustion fuels,” Paul Cort, director of Earthjustice’s Right To Zero campaign, said in a release. “The gradual shift in car sales to zero-emissions models will cut smog and household costs while growing California’s clean energy workforce. Cutting truck pollution will help clear our skies of smog. EPA should now approve the remaining authorization requests from California to allow the state to clean its air and protect its residents.”
However, the truck drivers' industry group Owner-Operator Independent Drivers Association (OOIDA) pushed back against the federal decision allowing the Omnibus Low-NOx rule to advance. "The Omnibus Low-NOx waiver for California calls into question the policymaking process under the Biden administration's EPA. Purposefully injecting uncertainty into a $588 billion American industry is bad for our economy and makes no meaningful progress towards purported environmental goals," (OOIDA) President Todd Spencer said in a release. "EPA's credibility outside of radical environmental circles would have been better served by working with regulated industries rather than ramming through last-minute special interest favors. We look forward to working with the Trump administration's EPA in good faith towards achievable environmental outcomes.”
Editor's note:This article was revised on December 18 to add reaction from OOIDA.
A Canadian startup that provides AI-powered logistics solutions has gained $5.5 million in seed funding to support its concept of creating a digital platform for global trade, according to Toronto-based Starboard.
The round was led by Eclipse, with participation from previous backers Garuda Ventures and Everywhere Ventures. The firm says it will use its new backing to expand its engineering team in Toronto and accelerate its AI-driven product development to simplify supply chain complexities.
According to Starboard, the logistics industry is under immense pressure to adapt to the growing complexity of global trade, which has hit recent hurdles such as the strike at U.S. east and gulf coast ports. That situation calls for innovative solutions to streamline operations and reduce costs for operators.
As a potential solution, Starboard offers its flagship product, which it defines as an AI-based transportation management system (TMS) and rate management system that helps mid-sized freight forwarders operate more efficiently and win more business. More broadly, Starboard says it is building the virtual infrastructure for global trade, allowing freight companies to leverage AI and machine learning to optimize operations such as processing shipments in real time, reconciling invoices, and following up on payments.
"This investment is a pivotal step in our mission to unlock the power of AI for our customers," said Sumeet Trehan, Co-Founder and CEO of Starboard. "Global trade has long been plagued by inefficiencies that drive up costs and reduce competitiveness. Our platform is designed to empower SMB freight forwarders—the backbone of more than $20 trillion in global trade and $1 trillion in logistics spend—with the tools they need to thrive in this complex ecosystem."