On The Radar
Venture capital group Up Partners has released the first in what will be a series of annual reports on trends in transportation, from advanced air mobility (AAM) aircraft to road transport and hypersonic and space travel. The Moving World Report is designed to inform investors, entrepreneurs, policymakers, and students, according to Up.Partners co-founder and managing partner Cyrus Sigari. “We’re looking at every facet of mobility and dissecting macro and micro trends,” he said.
Developed in collaboration with Research+Attitude, the Moving World Report identifies passenger and cargo mobility developments that are responding to forces shaping upcoming markets.
One of the most interesting aspects of the report is a chart showing a constant decline in transportation costs from about 1830 to the present. According to the report, sea transport costs have declined by 3.4 percent (negative annual growth rate), rail freight by 2.8 percent, and air freight (since about 1930) by 6.7 percent. “Data is effectively free now,” he said, and if the trend in freight cost continues, “We will be able to move matter without any cost.”
But there are constraints that will affect the development of future mobility technology, the report concludes. With transportation the largest contributor to global emissions, Sigari said, “we have a singular opportunity to affect climate change.” Even though aviation accounts for just 10 percent of that contribution, “There is a bullseye on aviation, particularly with the public perception of aviation,” he said.
Most investment—about 80 percent—in mobility since 2020 has been on ground vehicles, with 5 percent going to AAM. With special purpose acquisition company (SPAC) investments losing some luster, he said, “We’ve seen a significant contraction in public equity investment in AAM companies. But electric, hybrid-electric, and hydrogen power sources for AAM aircraft have the potential to help move people much more efficiently than aircraft powered by combustion engines and thus create a more sustainable aviation industry.
These projections are tempered by a severe shortage of pilots. “This is an area of collective interest,” Sigari said, “and it’s important to invest more in pilot training and technology to allow [the industry] to bring pilots online quicker, faster, better, and cheaper. Airline travel is going to get worse [because of the shortage]. Regional airlines have had to shut down.”
A bright spot for AAM is the rapid growth in drone package deliveries, which climbed almost 300 percent in 2022 versus 2021. Zipline just surpassed 500,000 flights over 36 million miles. “They will do more in 2023 than in the last six years combined,” he said.
Further automation of cargo flying will help ameliorate the pilot shortage. “We can’t guess when we will have fully autonomous people-carrying aircraft, but I can see cargo being the largest consumer of this kind of technology.”
Other issues that the report tackles include sustainable aviation fuel, which will need to be created in massive amounts to meet the carbon emission reduction needs of the aviation industry during the coming decades; raw materials for batteries, the demand for which is projected to grow by 10 times by 2030, causing major price hikes; and the ability of electrical grids to handle widespread electric vehicle charging. "If we collectively don’t address these issues,” Sigari concluded, “the whole electric [movement] could go in the trash. We have to ensure that as an economy and western society, we’re able to move forward.”
In 2021, Up.Partners raised $230 million for its venture capital fund, with backers including Alaska Air, Woven Capital (part of Toyota Motor), Standard Industries, Hillwood, and OSM Maritime. Its investments include eVTOL aircraft developer Beta Technologies.