The Friday Report Blog: March 10th, 2023

Alphabet’s Wing Predicts Drones Will Deliver Millions of Packages by 2024

Drone delivery service Wing, owned by Alphabet, expects that its drone network will be able to deliver millions of packages at a lower cost than ground transportation by the year 2024.  The company states that it will be able to handle the high-volume delivery activity thanks to its decentralized, automated system the Wing Delivery Network.

Wing’s drones can not only support curbside pickup but also be integrated into retail and restaurant operations through its store-to-door operating model. Currently, Wing has made over 300,000 commercial drone deliveries to ten locations across three continents. By the middle of 2024, the company expects its operations to be worldwide.

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Air Cargo Capacity Returns to Pre-Pandemic Levels

According to a recent report from Xeneta’s Clive Data Services, available air cargo capacity increased for the 11^th consecutive month. This increase is the first time that cargo capacity has surpassed 2019 levels. The increase in cargo capacity is a result of a 4% decrease in demand for air cargo as shippers rely on cheaper modes of transportation amid labor challenges and inflation. 

According to the report, the last five weeks have seen a 17% capacity increase. This increase has resulted in a decrease in shipping rates, especially from Asia Pacific territories to North America. In fact, spot rates in February are down 8% and 60% year over year to $4.42 per kilogram. Rates from Europe to North America are also down 8% in February and 40% year over year to $2.88 per kilogram. Spot rates for shipments between China and the U.S. did increase in the first week of March however, up 3.4% to $4.62 per kilogram.

Despite the increase in air cargo capacity, shippers continue to invest in their cargo operations. Air Transport Services Group (ATSG) has announced intentions to spend the majority of its $850 million capital expenditure budget on its air cargo transportation fleet.

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DB Schenker and MSC Partner to Offer Net-Zero Emission Ocean Shipments

Freight forwarder DB Schenker and the Mediterranean Shipping Company (MSC) recently agreed to a partnership to transport at least 30,000 twenty-foot equivalent units (TEUs) of cargo with net-zero emissions throughout the remainder of 2023.

According to the deal, DB Schenker will mix 12,000 metric tons of biofuel with fossil-based marine fuels for all of its less-than-container loads, full-container loads, and refrigerated container shipments with MSC. Customers of DB Schenker can opt to pay a surcharge to transport chemicals with the sustainable fuel. Shippers can also receive a certified proof of emission reduction to help with their environmental sustainability governance reporting.

The agreement between the two companies is not the first of its kind. In 2022, DB Schenker partnered with French shipping company Maritime Freighting Company-General Maritime Company (CMA CGM) to offer net-zero carbon ocean container transport. The agreement was for over 2,500 tons of biofuel.

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