New Company Called Natilus Developing Concept for Air Service it Says will Cost Just 20% More than Ocean Shipping

It is a choice that has challenged global supply chain managers for decades: whether to move international shipments via ocean container or put the goods in a plane and ship via air cargo.

Ocean shipping is relatively cheap, but can involve two-three weeks in total transit time, a cycle made worse over the past decade by the practice of "slow steaming" that has been adopted by ocean container carriers to reduce fuel costs.

Supply Chain Digest Says... Natilus expects to build hundreds of the drones. Target customers would of course include major air freight service providers such as UPS and FedEx, as well as "medium freight forwarders" like Whole Foods and Costco. What do you say? Click here to send us your comments Click here to see reader feedback

Using traditional air cargo reduces that transit time to a few days, increasing responsiveness, but comes at a heavy cost for transportation.

Now, a start up company called Natilus is developing an approach based on a drone aircraft that it says will cost just 20% more than ocean shipping, far lower than the premium today for air freight.

The company says it hopes to find a sweet spot in delivery time and cost between ocean freight and traditional air shipping.

The full Natilus vision is for a large drone aircraft about the size of a current Boeing 777 able to carry some 200,000 pounds of cargo. For now, it is developing a 30-foot long prototype drone that can carry about 700 pounds of cargo as a proof on concept.

It plans on making its first test run sometime this summer, taking 30 hours to carry freight between Los Angeles and Hawaii. The drones will fly at an altitude of approximately 20,000 feet, well below commercial planes, but high enough to be fuel-efficient. The drones will be powered with turboprop and turbofan engines using standard jet fuel

The company says the trips across oceans would cost about half of what current commercial air freight transport runs, and travel just a bit slower than manned cargo aircraft. The savings come from more efficient use of fuel and elimination of the expense of a flight crew.

As reported by Fast Company magazine, because the drones would be unlikely to receive government approval to fly over populated areas, they are designed to take off and land in the water. They don’t even have landing gears. The expectation is that after landing, they would taxi into a standard port, where cargo would be unloaded using cranes.

The goal is to finish production of the full-scale, over 200-foot drone by 2020, then have it undergo testing and certification before beginning actual commercial flights.

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Natilus expects to build hundreds of the drones. Target customers would of course include major air freight service providers such as UPS and FedEx, as well as "medium freight forwarders" like Whole Foods and Costco.

But company founder Aleksey Matyushev notes that Natilus may operate some of the drones itself as a freight airline but fly them under the brand logos of customers.

"Air cargo is all about speed at high price," Matyushev tells Fast Company. "Ocean freight is longer transit times at lower pricing. And with certain goods - be it perishables, or goods that are looking for that middle ground - that idea of middle price for middle transit times is that sweet spot."

What do you think of the Natilus concept? Will is work? Would a lot more cargo go air if it costs just 20% more than ocean? Let us know your thoughts at the Feedback section below.

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