Third-party logistics provider Flexport, flush with fresh investor funding, has tentatively ordered two large autonomous cargo jets with a 100-ton payload from startup aircraft manufacturer Natilus, part of a strategic effort to enhance customer service by directly controlling more transport capacity. But it’s more a case of making a trial investment than a big bet on a concrete technology.
San Diego-based Natilus on Wednesday announced $6 billion in advance purchase commitments of more than 440 pilotless aircraft from Flexport plus Kenyan all-cargo airline Astral Aviation; Volatus Aerospace, a drone services provider; Dymond Group, a management services and consulting company with an aerospace division based in Ottawa, Ontario; and Aurora International, an aerospace company developing autonomous aircraft products and services in the Kingdom of Eswatini, formerly Swaziland.
Flexport, which also has an option to buy a third robot freighter, is the only one of the group that disclosed its purchase volume. The letter of intent it signed, however, is not a firm commitment to purchase yet. Aircraft manufacturing has high barriers to entry and potential customers will likely want to see concrete production and technical capability before signing contracts.
The Natilus engagement involves a small investment by Flexport’s venture capital arm.
“We’re always looking for innovation. We’re investing in a number of startups that are trying to bring change and a new way of doing business to this industry that is fairly antiquated and has been behind the curve of innovation for years,” said Neel Jones Shah, executive vice president and global head of airfreight, in an interview.
Natilus is developing a family of pilotless cargo jets, starting with a 3.8-ton twin-engine turboprop able to carry the equivalent of seven LD3-45 small shipping containers for short-haul feeder service. The N3.8T is in prototype production, with its first test flight scheduled for 2023. Natilus has completed two wind tunnel tests to validate the aircraft, and officials expect to fly commercially in two years.
Other variants will include a 60-ton medium-haul aircraft and a 130-ton payload long-haul jet. The 100-ton type will have a maximum range of 5,400 nautical miles.
The diamond-shaped cargo bay provides an efficient blended wing body configuration that allows for 60% more volume than a comparable traditional freighter, according to the company.
Natilus says its robot aircraft will use existing airport infrastructure, engines and standard cargo containers, while cutting costs by 60% and lowering carbon emissions by half.
Flexport has actively expanded its dedicated air capacity since the pandemic through a long-term air charter agreement with Atlas Air (NASDAQ: AAWW). The arrangement essentially gives the freight forwarder its own private airline with service six to seven times per week to Los Angeles, as well as less frequently to Miami. Last month the company announced it will add a third Boeing 747-400 freighter to its Atlas network.
Jones Shah has previously said the company will focus more on dedicated long-term charters with all-cargo airlines because international passenger flying, which has more schedule volatility, will be reduced from pre-pandemic levels after airline downsizing. Passenger carriers are also utilizing smaller, more fuel-efficient aircraft with increased long-distance capability that have less room for cargo.
Flexport expects to close on $935 million in new fundraising this spring and use the money to accelerate technology developments needed to expand its service.
“We are working closely with customers to increase the efficiency of air transportation and make it more competitive and safer than ocean shipping,” co-founder and CEO Aleksey Matyushev said in the announcement. “Natilus intends to revolutionize the transport industry by providing the timeliness of air freight at an affordable cost reduction of 60%, making air cargo transportation substantially more competitive.”
No pilots, more cargo
The robot cargo jets will be capable of fully autonomous flight but will initially operate with a remote pilot in an office to comply with current regulations and enable faster approval. The ability to be certified under current regulations is a big advantage over drones used for last-mile logistics. Switching from a pilot on board to a remote pilot is a smaller bridge to cross for civil aviation authorities, who are already comfortable with existing autopilot functions on aircraft that essentially turn the pilot into a skilled flight manager rather than a manual aviator. Autonomous aircraft follow aviation regulatory standards and employ the same standard safety protocols as on a crewed aircraft.
“It’s going to take many years before regulators and insurers are comfortable with large unmanned jets,” Richard Aboulafia, managing director at Aerodynamic Advisory, told FreightWaves.
The pilotless aspect of the aircraft is one element in reducing costs and also helps to address a looming shortage of pilots as air travel and airfreight demand continue to grow.
But it’s the next-generation design that Natilus officials claim will drive cost savings.
The triangular blended wing-body configuration is a departure from tube-and-wing aircraft which feature linear loading capability. By rotating the cargo to 45 degrees, the diamond configuration introduces more loading positions and maximizing space in the aircraft. Natilus aircraft will be smaller in size than their legacy counterparts, with more volume, according to the company.
Traditional fuselage cross sections are optimized for passengers, with a circular design to aid cabin pressurization. But cargo naturally moves best in rectangular boxes or pallets. Fitting rectangular pallets in a circular fuselage section leaves plenty of empty space. A blended-wing body configuration allows for a single rectangular cross section and full utilization of the available volume.
The more aerodynamic structure also is designed to reduce fuel burn.
Natilus says its design will also outperform passenger-to-freighter converted aircraft because the conversion process adds weight.
Allied Market Research recently forecast that the global airfreight market is projected to reach $376 billion by 2027, a third greater than in 2019.
A series of high-tech aviation companies have entered the market for middle-mile autonomous aircraft. Destinus SA, based in Switzerland, on Wednesday announced a $29 million funding raise for its hypersonic cargo delivery aircraft. Dronamics, with headquarters in London and Sofia, Bulgaria, intends to go live this year with unmanned aircraft able to carry 772 pounds up to 1,500 miles, enabling same-day shipping over long distances. It plans to create a network of droneports at more than 35 airports in Europe.
Natilus is supported by Silicon Valley investors such as Draper Associates, Mubadala, VU Ventures, Liquid2 VC and Seraph Group.
Volatus Aerospace has secured the first production slot for the Natilus N3.8T large autonomous air vehicle. In November, Volatus announced the expansion of its existing drone services business into the drone cargo market with the introduction of fully autonomous drones produced by Avidrone.
In September, Dymond Group entered into a preliminary agreement to purchase the struggling Stephenville Airport in Newfoundland and develop it into an international facility with cargo capability. But the Stephenville Airport Corp. last month said it has yet to receive a formal offer, according to the Canadian Broadcasting Corp. CEO Carl Dymond said at the time that he planned to manufacture 80-foot-long cargo drones at the airport.
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