Cargo airships are happening
I got something wrong; introducing Airship Industries
Last year, I published an article on airships. The article was the fruit of a few years’ exploration of the industry. I spoke to multiple airship manufacturers under NDA. I traded ideas with other cargo airship enthusiasts. And ultimately, along with my friends Ian McKay and Matt Sattler, I hired an engineer to develop new data on a 500-ton cargo airship.
My article explained why airships could transform the freight market and offered my thoughts on how they should be designed and operated. Airships feature a tantalizing scaling property—the bigger they get, the better they perform. If you want a cargo airship that can compete in transpacific cargo, it needs to be big. No one in the industry was doing what I thought needed to be done—targeting the intercontinental cargo market with a large, rigid-body airship as quickly as possible using an iterative, hardware-rich approach.
Perhaps surprisingly, my airship article resonated with a lot of people. Veritasium made a great video based on it that has racked up 3.5 million views so far. Because so many people read the post and watched the video, I feel that I now must come clean and admit that I got something wrong. I aspire to be 100% accurate in all my posts, so I regret the error.
But I don’t regret it that much, because it turned out great.
One of the thousands of people who read my airship article was an engineer named Jim Coutre. Jim began his career at SpaceX, where he worked on complex multidisciplinary systems like the stage separation systems on Falcon 9 and the solar arrays on the Dragon capsule. He also spent several years at Hyperloop, where he rose to become chief engineer.
After reading the article, Jim started a spreadsheet in March 2023. He was methodical. He worked through all the systems that would be required to make an unmanned cargo airship work, and put cost and performance bounds around them. He devised a feature set to address cargo loading and unloading. He made manufacturing cost estimates. He did all the technoeconomics that were missing in my post.
Jim only found one major discrepancy. In my article, I noted that freight service operates in three tiers—ship, truck, and plane, or basically, slow, medium, and fast. There are no bridges across oceans, so on transpacific routes there is only slow and fast. There was an opportunity, I argued, to introduce a medium-speed mode at truck-like prices. Airships could be that medium-speed mode with truck-like economics.
The problem is that today’s air freight service is not as fast as I had assumed. You can cross the Pacific in a plane in less than a day. You can pay for parcel service that will get you your package in 2 to 3 days. But for air freight service, end-to-end delivery takes a week or more, involving multiple parties: in addition to the air carrier and freight forwarder, at both the origin and destination, there is a trucking company, a warehouse, a customs broker, and an airport. Each touchpoint adds cost, delay, and the risk of theft or breakage.
Once you account for all these delays and costs, the 4 to 5 days it takes to cross the Pacific on an airship starts to look pretty good. If you can pick up goods directly from a customer on one side and deliver them directly to a customer on the other, you can actually beat today’s air freight service on delivery time.
This changes everything. Since airships are, after all, competitive with 747s on delivery time, you can earn the full revenue associated with air freight, not just the lower trucking rates I had assumed. Cargo airship margins, therefore, can be much higher than I had realized.
Today’s 747 freighters have almost no margin. They operate in an almost perfectly competitive market and are highly sensitive to fuel costs. They simply won’t be able to compete with transpacific airships that are faster end to end, less subject to volatile fuel prices, and operating with cushy margins. A cargo airship designed to compete head to head in the air freight market could take the lion’s share of the revenue in the air cargo market while being highly profitable.
Last year, Casey Handmer introduced me to Jim, with and for whom he worked at Hyperloop.1 I got to know Jim a bit. We met up in person at Edge Esmeralda in June—he presented at the Hard Tech Weekend there that Ben Reinhardt and I co-organized. We talked about airships a lot. We strategized. We initiated some customer conversations. We received validation.
Over the summer, Jim incorporated Airship Industries. He hired a team of cracked ex-SpaceX engineers. And he raised a large pre-seed round, in which I’m delighted to say that my syndicate (which you should possibly join) is the largest investor.
Airship Industries is designing its vehicle to dominate transoceanic air freight. It checks all the right boxes. It shortens end-to-end freight delivery time. It lowers freight handling costs, delays, and breakage. It’s highly profitable on a unit basis. It lowers fuel burn and carbon emissions by 75 percent without any sustainable fuel breakthroughs.2
In my last airship article, I expressed some doubt that cargo airships were startupable. Airship development and certification is capital intensive. I thought and still believe that airships can very likely match the economics of trucks. But even if you succeed at building a great cargo airship, if you are limited to charging trucking prices, the margins will be very thin. No one wants to invest a lot of capital in a risky endeavor for thin margins. But if, as I am now convinced, operating margins could be huge by competing directly in the air freight market, then airships are definitely startupable.
Here’s another way to look at it. Many software investors eschew hard tech startups because of their capital intensity, but it’s hard to deny that huge returns are possible in hard tech: just consider SpaceX. Bring me another SpaceX! the reluctant investors might say.
But even SpaceX looks like small potatoes next to an industry like global logistics. For a Falcon 9-sized investment, instead of revolutionizing a $2 billion/year (10 years ago) commercial launch market, you could transform a market that is at least 30 times bigger, with similar unit economics to SpaceX.
I am thrilled to see Airship Industries take shape. It’s happening. There will soon (soon in the grand scheme of things at least) be thousands of giant airships crossing our oceans, transforming global logistics and connecting economies. Cargo airships are going to be big.
Casey is also an airship aficionado. In our earliest airship conversations in 2021, Casey referred me to Hugo Eckener’s journals, which he had read.
If those breakthroughs do eventually come, at a higher price point, Airship will be less sensitive to fuel costs in the first place. And since the drivetrain is thoroughly electric, any new sources of electricity can be swapped in instead of a fuel tank and turbine.