Giant Airships as the Sixth Mode of Transport
The world economy relies on five major modes of transportation: airplanes, ships/barges, trains, trucks and pipelines (fluids only). Each mode utilizes, and is defined by, different technological principles. For trains, the low friction running surface created by steel wheels over steel tracks, allows them to pull huge loads with relatively little energy. For airplanes, aerodynamic lift permits range and velocity that are unparalleled in transport. For ships, floating on a dense liquid (water), requires minimal energy to carry immense loads. The reliability of pipelines and flexibility of trucks give them unique advantages in transportation, too. The technological principle by which a transport mode operates, determines the range of cost and capabilities characteristics that it can achieve.
Together, the five modes of transport comprise a menu from which shippers can choose one or more options. Not every option is available for a given job, e.g., furniture cannot be sent from the US to China by truck, or a parcel sent three streets over by airplane. Every mode of transport, including intermodal options like airplane-truck and train-truck, has tradeoffs in money and time, as well as other factors. Important constraints include cargo weight and dimensions, and perishability. As a sixth mode of transport, giant cargo airships will also have certain constraints, but could add new opportunities and intermodal options to the menu of shippers.
The giant airships that could become the sixth major mode of transportation have yet to be built, but are clearly in the design stage. More engineering effort and capital investment will be required, but we can be confident that certain capabilities will be achieved based on pre-WW2 experience. In this post and those following, we will explore the applications of giant airships that will probably emerge within the next ten or twenty years.
Table 1 provides a comparison of capabilities and costs for the six modes of transport. may serve as a rough sketch and a mnemonic before we go into more depth. As with any comparison, there are approximations and generalities in describing the different freight modes, but Table 1 underscores the potential competitiveness of giant airships. At one-quarter the cost, airships will compete well with cargo airplanes whether the distance is great or short. They can also compete with ships by getting cargo to its destination faster, though less cheaply. Shippers of higher value and perishable products that are crossing oceans will prefer to use airships. In most cases, giant cargo airships are likely to be complementary with trucks, though airships may also compete with trucking for over-dimensional freight and long-distance hauling. Routine door-to-door delivery by cargo airship is unlikely to occur.
Is it worthwhile to try to project a future for giant airships that, in the best case, will take a long time to arrive? Why not focus, as most actively aspiring airship builders do today, on making the business case for niche markets like remote military and mining resupply, logging, elite yachting and tourism, pipeline and wind turbine installation, resupplying communities in remote locations, and so forth? That, after all, is where the first giant airships will probably be deployed. But there are several good reasons to look further ahead.
A focus on the long run can elucidate that the “first mover” advantage which investors in the first successful cargo airships can expect to enjoy. The huge giant cargo airship industry of the future is likely vastly to exceed any value derived from the profitability of the first successful cargo airship operations per se. To see why, suppose that (a) twenty years after the first successful application of a cargo airship in a niche market, giant cargo airships are a trillion-dollar industry with $200 billion in annual profit, and (b) the first mover sustainably captures 10% of that market. Even if we use a rather high discount rate of 15%, the present value of the profits in the 20th year is $1.22 billion, with subsequent years contributing similar amounts, especially if the industry continues to grow.
Far from being irrelevant, the distant future would comprise most of the financial value in cargo airship investments. With this in mind, smart investors aspiring to obtain the first mover advantage in the giant airship industry should hardly care whether or not early markets in which an invested company operates are highly profitable. The big-money reason to use airships to install wind turbines or resupply northern Canada is to get the IP, brand capital, and teams in place that can hold onto a stake in the giant airship industry when airships establish themselves as the sixth major mode of transportation. If this were widely understood and believed, the many airship startups who are seeking funding today could expect a more sympathetic hearing from potential investors.
Giant airships could put a dent in the global warming problem. Transportation accounts for about one-quarter of global carbon emissions, of which about 2% and rising comes from jet airplanes and much more from trucks. Even if airships used fossil fuels for propulsion, they would still have a much smaller carbon footprint per ton-mile than trucks or airplanes because of the inherent tendency towards fuel efficiency of aerostatic flight. The more likely scenario is for giant airships to use hydrogen as fuel. With the hydrogen generated using nuclear or renewable energy, giant airships could carry freight with no direct or indirect carbon footprint and no carbon taxes. In a scenario where airships capture a large share of the global transportation spend, carbon emissions might be reduced by 5%.
Recently many on the Left cheered the Green New Deal championed by Representative Alexandra Ocasio-Cortez, even though its cost in the first year has been estimated (admittedly by critics) at $70,000 per US household. This suggests a huge willingness to pay for climate change mitigation by some Americans, and of course, many other Western countries are as concerned as Americans or more so. Cargo airships could be a much more cost-effective policy to reduce climate change. For about $70 per household, Americans could create a $9 billion fund for scientific research and pilot projects to catalyze the emergence of a giant airship industry. Besides the relative cheapness, that would have the advantage of being self-globalizing. Once produced, cost-competitive giant airships would spread on their own, by appealing to rational, profit maximizing logisticians, reducing carbon emissions as a side-effect.
Giant cargo airships might significantly reduce world poverty in the tropics and many remote locations. Being landlocked and/or having inadequate transportation infrastructure are important causes of world poverty. The export-oriented development strategy in East Asia over the past 50 years, which was powered by the development of intermodal sea containers, is largely unavailable to Central Asia and much of Sub-Saharan Africa. These people live too far from the sea lanes and navigable rivers that could carry exports to the rich, developed markets. Good roads and/or rail systems can make up for poor access to waterborne freight transportation, but many countries find themselves in a poverty trap. Poverty makes infrastructure investment unaffordable, and a lack of infrastructure keeps them poor. Giant airships that could operate cost-competitively with trucks would help connect landlocked and infrastructure-poor countries to the world economy and open up new possibilities for export-led growth.
A fourth consideration is food security and the ability to transport perishables, like fresh fruit and vegetables. No one knows how climate change is going to affect the world food supply, but we already observe greater variations in weather with more violent storms and temperature extremes. It has been said that the majority of the world’s food production is grown on a “postage stamp.” What this means is that the amount of the Earth’s surface with the optimal combination of fertile soils, precipitation and favourable growing-season is relatively small. As the world’s climate changes, the breadbaskets that mankind depends upon may become more threatened by droughts, floods, etc., or in some cases, simply be lost to rising seas. The ability of airships to move perishables across ocean barriers and between hemispheres quickly and affordably means that they could allow more rapid distribution in times of famine, especially to less developed countries with poor infrastructure where famines usually occur.
Famine risk aside, better movement of perishables among continents would enable more people to eat diverse, healthy, and delicious diets. In general, North-South trade is less developed globally than East-West trade because of transportation. Giving Africa and Latin America, and the island states, like Indonesia, better access to northern markets would generate trade and income. These long-term prospects for what airships could accomplish deserve to affect actions taken by investors, policymakers and philanthropists today.