While many question whether drone deliveries will ever happen in the U.S., Keller Rinaudo is already using autonomous aircraft to deliver medical supplies to remote locations in Africa.
David Maloney has been a journalist for more than 35 years and is currently the group editorial director for DC Velocity and Supply Chain Quarterly magazines. In this role, he is responsible for the editorial content of both brands of Agile Business Media. Dave joined DC Velocity in April of 2004. Prior to that, he was a senior editor for Modern Materials Handling magazine. Dave also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a journalist, television producer and director in Pittsburgh. Dave combines a background of reporting on logistics with his video production experience to bring new opportunities to DC Velocity readers, including web videos highlighting top distribution and logistics facilities, webcasts and other cross-media projects. He continues to live and work in the Pittsburgh area.
Few people are fortunate enough to combine their job with their passion. Keller Rinaudo is one of them. Rinaudo is CEO and cofounder of Zipline, a company that builds autonomous drones designed for delivering medical supplies to remote parts of the world.
The Harvard-educated Rinaudo started his career as a software engineer and a professional rock climber. For a time, he built computers out of RNA and DNA to operate in human cells as molecular doctors. Then, he discovered the wonderful world of logistics and the possibilities of using new technologies to deliver medical supplies to all of the world's inhabitants, wherever they may live.
San Francisco-based Zipline employs 40 aerospace and software engineers and is funded by an impressive slate of investors, including Sequoia Capital, Google Ventures, Paul Allen, Jerry Yang, and Stanford University. The tech firm builds and operates 40-pound battery-powered drones that look like small airplanes. The drones are catapult-launched and fly to remote destinations to make deliveries by paper parachutes. They then return to the distribution center, where they fly into a large net or are caught by a tailhook and quickly made ready for further deliveries. (You can watch a video of a drone delivery on the company's website.)
Zipline's first major project is partnering with the government of Rwanda to use its drones to make last-mile deliveries of blood to remote transfusing facilities. From its DCs, Zipline currently delivers about 30 percent of the national blood supply of Rwanda. The long-term vision for this project is to be able to swiftly reach each of Rwanda's 11 million citizens with any essential medical product they need, regardless of how remote they are.
Rinaudo recently sat down with DC Velocity Editorial Director David Maloney to discuss this exciting venture. The following is an edited version of their conversation. You can watch the full interview at the end of the article.
Q: What made you decide to zero in on healthcare logistics for Zipline's first drone deliveries?
A: Healthcare logistics was a really good place for us to start for a number of reasons. First of all, every delivery is potentially saving a human life. Second, healthcare products are obviously urgently needed, and logistics is a really important part of making sure that doctors have what they need to treat patients. Plus, the healthcare logistics market itself is a huge $7 billion market, and it's one that, while it functions well in developed countries, really doesn't function well in a lot of other parts of the world. There is a huge opportunity to both push the industry forward and also save lives.
Q: Why was Rwanda chosen?
A: We wanted to find a country that was small enough that we could get to national scale quickly and had a government that was making active investments in technology and healthcare for its citizens. Rwanda really fit that bill. So, in partnership with Rwanda's administrative health [ministry], we've been able to turn Rwanda into the first country to achieve universal healthcare access for all. They have been able to put every single one of their citizens within a 15- to 25-minute delivery of any essential medical product.
Q: Your drones sometimes have to fly over populated areas to reach patients in remote locations. Some people have questioned the safety of drones flying over people. Is that a concern for you as well?
A: When we're flying, what's important to us is not just saving the life of the person that we're delivering for, but also ensuring that we're safe for the people we're flying over—the people who live in the towns and cities that we fly over on a daily basis. It's really important that these vehicles be able to operate at a similar level of reliability as general aviation aircraft.
Q: Could you describe just how the vehicles fly and make their deliveries?
A: The user experience of receiving a delivery from Zipline is very simple. Any doctor or health worker can use a cellphone to send a text message to place an order. When the distribution center receives that text, Zipline's team will basically pull the product from stock and load it into one of our aircraft. That aircraft is then launched from the distribution center, and it flies autonomously to the destination's GPS coordinates.
Q: So, no one is controlling it? It is all programmed electronically and by computer?
A: Exactly. The plane is flying itself using a flight control algorithm. It will descend to about 30 feet off the ground, and then we drop the package using a really simple paper parachute. That enables us to deliver every shipment right into the receiver's "mailbox," which is an area about the size of about two parking spaces on the ground. The plane will turn around, come home, and land at the distribution center. It is ready to fly again a few minutes later.
Q: Have you had any complications with your deliveries in Rwanda?
A: We've made tens of thousands of deliveries, and we've never lost a vehicle. We design redundant systems into every level, whether it's the flight controls, the avionics, or the way the vehicle is mechanically engineered.
Q: And these are delivery vehicles that your company has created?
A: Yes. We build everything from scratch. We also have a system on board so if the vehicle can't make it back to the distribution center, it can actually use a parachute to bring itself to ground gently. So, this is how we ensure that these vehicles are 100 percent safe for the people they're flying over.
Q: How many types of those deliveries are you making a day in Rwanda?
A: We just agreed to an expansion of our services in Rwanda and have added a second distribution center. That will allow us to do about 200 deliveries per day countrywide.
Q: Are you looking to expand to other nations with this technology?
A: Yes, rural healthcare is a global problem. A lot of other countries are now looking at Rwanda as a role model and figuring out how they can leverage similar technology to improve their own healthcare systems. So, we will be launching in several other African countries in the next six months.
And here in the United States, we will soon begin making lifesaving medical deliveries in rural North Carolina. We're working through final details with the Federal Aviation Administration, the state of North Carolina, and our partners on the ground. We expect to begin deliveries there beginning in the second quarter of this year.
Q: There's been a lot of talk in the logistics industry about drones being used for deliveries. Can you see a day when that technology will be used on a regular basis for small parcel deliveries, such as e-commerce orders?
A: Yes. The funny thing is, it is already happening at scale today, just not in the United States. When it comes to e-commerce, we think it's inevitable that this type of technology will have a big impact on how e-commerce orders are delivered, but that's not the first place the technology is going to start. It makes more sense to start focused on life-saving applications. Then I think after that, you'll see a lot of high-need, urgent applications that might be more-industrial applications. And then in the long run, you'll start to see this technology permeate the really big parcel-delivery market that's currently served mainly by UPS and FedEx.
Worldwide air cargo rates rose to a 2024 high in November of $2.76 per kilo, despite a slight (-2%) drop in flown tonnages compared with October, according to analysis by WorldACD Market data.
The healthy rate comes as demand and pricing both remain significantly above their already elevated levels last November, the Dutch firm said.
The new figures reflect worldwide air cargo markets that remain relatively strong, including shipments originating in the Asia Pacific, but where good advance planning by air cargo stakeholders looks set to avert a major peak season capacity crunch and very steep rate rises in the final weeks of the year, WorldACD said.
Despite that effective planning, average worldwide rates in November rose by 6% month on month (MoM), based on a full-market average of spot rates and contract rates, taking them to their highest level since January 2023 and 11% higher, year on year (YoY). The biggest MoM increases came from Europe (+10%) and Central & South America (+9%) origins, based on the more than 450,000 weekly transactions covered by WorldACD’s data.
But overall global tonnages in November were down -2%, MoM, with the biggest percentage decline coming from Middle East & South Asia (-11%) origins, which have been highly elevated for most of this year. But the -4%, MoM, decrease from Europe origins was responsible for a similar drop in tonnage terms – reflecting reduced passenger belly capacity since the start of aviation’s winter season from 27 October, including cuts in passenger services by European carriers to and from China.
Each of those points could have a stark impact on business operations, the firm said. First, supply chain restrictions will continue to drive up costs, following examples like European tariffs on Chinese autos and the U.S. plan to prevent Chinese software and hardware from entering cars in America.
Second, reputational risk will peak due to increased corporate transparency and due diligence laws, such as Germany’s Supply Chain Due Diligence Act that addresses hotpoint issues like modern slavery, forced labor, human trafficking, and environmental damage. In an age when polarized public opinion is combined with ever-present social media, doing business with a supplier whom a lot of your customers view negatively will be hard to navigate.
And third, advances in data, technology, and supplier risk assessments will enable executives to measure the impact of disruptions more effectively. Those calculations can help organizations determine whether their risk mitigation strategies represent value for money when compared to the potential revenues losses in the event of a supply chain disruption.
“Looking past the holidays, retailers will need to prepare for the typical challenges posed by seasonal slowdown in consumer demand. This year, however, there will be much less of a lull, as U.S. companies are accelerating some purchases that could potentially be impacted by a new wave of tariffs on U.S. imports,” Andrei Quinn-Barabanov, Senior Director – Supplier Risk Management Solutions at Moody’s, said in a release. “Tariffs, sanctions and other supply chain restrictions will likely be top of the 2025 agenda for procurement executives.”
As holiday shoppers blitz through the final weeks of the winter peak shopping season, a survey from the postal and shipping solutions provider Stamps.com shows that 40% of U.S. consumers are unaware of holiday shipping deadlines, leaving them at risk of running into last-minute scrambles, higher shipping costs, and packages arriving late.
The survey also found a generational difference in holiday shipping deadline awareness, with 53% of Baby Boomers unaware of these cut-off dates, compared to just 32% of Millennials. Millennials are also more likely to prioritize guaranteed delivery, with 68% citing it as a key factor when choosing a shipping option this holiday season.
Of those surveyed, 66% have experienced holiday shipping delays, with Gen Z reporting the highest rate of delays at 73%, compared to 49% of Baby Boomers. That statistical spread highlights a conclusion that younger generations are less tolerant of delays and prioritize fast and efficient shipping, researchers said. The data came from a study of 1,000 U.S. consumers conducted in October 2024 to understand their shopping habits and preferences.
As they cope with that tight shipping window, a huge 83% of surveyed consumers are willing to pay extra for faster shipping to avoid the prospect of a late-arriving gift. This trend is especially strong among Gen Z, with 56% willing to pay up, compared to just 27% of Baby Boomers.
“As the holiday season approaches, it’s crucial for consumers to be prepared and aware of shipping deadlines to ensure their gifts arrive on time,” Nick Spitzman, General Manager of Stamps.com, said in a release. ”Our survey highlights the significant portion of consumers who are unaware of these deadlines, particularly older generations. It’s essential for retailers and shipping carriers to provide clear and timely information about shipping deadlines to help consumers avoid last-minute stress and disappointment.”
For best results, Stamps.com advises consumers to begin holiday shopping early and familiarize themselves with shipping deadlines across carriers. That is especially true with Thanksgiving falling later this year, meaning the holiday season is shorter and planning ahead is even more essential.
According to Stamps.com, key shipping deadlines include:
December 13, 2024: Last day for FedEx Ground Economy
December 18, 2024: Last day for USPS Ground Advantage and First-Class Mail
December 19, 2024: Last day for UPS 3 Day Select and USPS Priority Mail
December 20, 2024: Last day for UPS 2nd Day Air
December 21, 2024: Last day for USPS Priority Mail Express
Measured over the entire year of 2024, retailers estimate that 16.9% of their annual sales will be returned. But that total figure includes a spike of returns during the holidays; a separate NRF study found that for the 2024 winter holidays, retailers expect their return rate to be 17% higher, on average, than their annual return rate.
Despite the cost of handling that massive reverse logistics task, retailers grin and bear it because product returns are so tightly integrated with brand loyalty, offering companies an additional touchpoint to provide a positive interaction with their customers, NRF Vice President of Industry and Consumer Insights Katherine Cullen said in a release. According to NRF’s research, 76% of consumers consider free returns a key factor in deciding where to shop, and 67% say a negative return experience would discourage them from shopping with a retailer again. And 84% of consumers report being more likely to shop with a retailer that offers no box/no label returns and immediate refunds.
So in response to consumer demand, retailers continue to enhance the return experience for customers. More than two-thirds of retailers surveyed (68%) say they are prioritizing upgrading their returns capabilities within the next six months. In addition, improving the returns experience and reducing the return rate are viewed as two of the most important elements for businesses in achieving their 2025 goals.
However, retailers also must balance meeting consumer demand for seamless returns against rising costs. Fraudulent and abusive returns practices create both logistical and financial challenges for retailers. A majority (93%) of retailers said retail fraud and other exploitive behavior is a significant issue for their business. In terms of abuse, bracketing – purchasing multiple items with the intent to return some – has seen growth among younger consumers, with 51% of Gen Z consumers indicating they engage in this practice.
“Return policies are no longer just a post-purchase consideration – they’re shaping how younger generations shop from the start,” David Sobie, co-founder and CEO of Happy Returns, said in a release. “With behaviors like bracketing and rising return rates putting strain on traditional systems, retailers need to rethink reverse logistics. Solutions like no box/no label returns with item verification enable immediate refunds, meeting customer expectations for convenience while increasing accuracy, reducing fraud and helping to protect profitability in a competitive market.”
The research came from two complementary surveys conducted this fall, allowing NRF and Happy Returns to compare perspectives from both sides. They included one that gathered responses from 2,007 consumers who had returned at least one online purchase within the past year, and another from 249 e-commerce and finance professionals from large U.S. retailers.
The “series A” round was led by Andreessen Horowitz (a16z), with participation from Y Combinator and strategic industry investors, including RyderVentures. It follows an earlier, previously undisclosed, pre-seed round raised 1.5 years ago, that was backed by Array Ventures and other angel investors.
“Our mission is to redefine the economics of the freight industry by harnessing the power of agentic AI,ˮ Pablo Palafox, HappyRobotʼs co-founder and CEO, said in a release. “This funding will enable us to accelerate product development, expand and support our customer base, and ultimately transform how logistics businesses operate.ˮ
According to the firm, its conversational AI platform uses agentic AI—a term for systems that can autonomously make decisions and take actions to achieve specific goals—to simplify logistics operations. HappyRobot says its tech can automate tasks like inbound and outbound calls, carrier negotiations, and data capture, thus enabling brokers to enhance efficiency and capacity, improve margins, and free up human agents to focus on higher-value activities.
“Today, the logistics industry underpinning our global economy is stretched,” Anish Acharya, general partner at a16z, said. “As a key part of the ecosystem, even small to midsize freight brokers can make and receive hundreds, if not thousands, of calls per day – and hiring for this job is increasingly difficult. By providing customers with autonomous decision making, HappyRobotʼs agentic AI platform helps these brokers operate more reliably and efficiently.ˮ