Home Deliveries Will Soon Change Forever

In Biden’s effort to save gas prices, he created a boon for an industry ripe for disruption...

Posted April 18, 2022

Dear Outsider,

I hope you had a happy and healthy Easter Sunday.

Last year, I made a bold prediction that homegrown biofuels would make a comeback, specifically hemp-based biodiesel.

We’re one step closer to that reality, as the Biden administration just issued a statement allowing gas stations to sell E15 gasoline this summer, which uses a 15% mix of ethanol. It’s an effort by the White House to offset what it calls the “Putin price hike.” When in reality, we all know that’s a red herring for Joe Biden killing the oil industry.

Now, regular gas already uses 10% ethanol, and E15 is less efficient, meaning we’ll be at the pump more often. But it shows that the administration is serious about cutting back on oil and gas. The SEC even recently issued a statement about it. According to Reuters, “The U.S. Securities regulator on Monday proposed requiring U.S.-listed companies to disclose a range of climate-related risks and greenhouse gas emissions, part of President Joe Biden’s push to join global efforts to avert climate-related catastrophes.”

If there’s one industry that uses more fuel than any other, it's the airline industry. Traditional planes burn a tremendous amount of fuel just to stay in the air, roughly 750 gallons an hour. All the overnight Amazon deliveries, the shipping, the heavy transport... This industry is ripe for disruption.

And if we know anything about Wall Street, it’s that it loves disruption.

In Joe Biden's effort to bring down gas prices, he's actually created a boon in the air transportation industry, and it will affect the future of air travel, from big airships all the way to small drones.

The Forgotten Era of Flight

In the early 1900s, airships could be seen flying over major cities, like this zeppelin floating over Manhattan in 1936...

zep travel

Airships, or dirigibles, evoke an emotional response because they’re really good at capturing people’s attention. When you see a blimp or even a hot-air balloon, the sheer size makes you feel like you’re living in the future. In fact, many sci-fi movies use airships as a symbol of future progress.

Who can forget the iconic "Indiana Jones and the Last Crusade" scene where Indy and Jones Sr. try to escape on a D-138 German zeppelin? The interior looked spacious, luxurious, and relaxing.

Now, all commercial zeppelin travel stopped after the Hindenburg disaster of 1937. The Van Wagner Airship Group estimates there are only 25 blimps in use around the world today, used mainly as billboards.

That could soon change. Technology has come a long way, and experts think the airship industry is being reborn as we speak.

Two companies in particular are working to disrupt the luxury air travel and heavy shipping industries using airships.

First, Hybrid Air Vehicles built the Airlander 10, the longest aircraft in the world, designed for slow, luxurious, and green commercial travel. It can also be used for surveillance and other military operations.

airlander

Using helium to float (instead of the flammable hydrogen used in the Hindenburg), it can take off and land vertically, allowing it to reach remote corners of the planet.

While it does use combustion engines for thrust and trim, the ship emits 75% less carbon than other aircraft. The company plans to use a hybrid electric motor, which will reduce emissions by 90%, with the goal of using all-electric engines in the near future. For now, the Airlander fits a niche luxury travel market, but airships have commercial uses as well.

Paris-based company Flying Whales created its airship out of necessity to bolster the French lumber industry. With a cargo capacity of 60 tons, the LCA60T can enter remote regions of the country to retrieve logs and carry them to sawmills. The company hopes to carry other commercial equipment, like shipping containers and wind turbine blades.

For the naysayers of airship travel... Jeff Bezos literally shot himself into space on a rocket. It's not far-fetched to think we can gently float ourselves from point A to point B.

One major problem with massive airships is the weather. The side of an airship effectively acts like a large sail, so heavy winds will really push it around.

However, smaller vehicles — like drones — have an advantage by being able to cut through the wind... and they're just now being used for home deliveries, a sector set to grow to $223 billion by 2027.

A Supply Chain Fix?

I finally caught the bug two weeks ago. For me, it felt like a mix of the flu and bronchitis. I was really out of it. Following CDC guidelines and staying in, I spent about $150 on Postmates because I was unprepared to ease my symptoms, which I find completely unacceptable in modern-day society.

If only there were a cheaper delivery service that didn’t charge sky-high delivery fees...

Well, delivery drones from Amazon, Walmart, and even Google are making their way into the friendly skies and might just patch up this supply chain by supplementing home deliveries.

Google’s Wing drone could be seen delivering Walgreens packages to residents in Frisco, Texas, last week.

wing

Amazon said it hopes to deliver 500 million aerial packages a year.

You may even see these delivery robots reaching rural areas and transporting people, equipment, and livestock.

It comes at an important time when many delivery app services have gone out of business by spending too much cash, giving out too many discounts, and not meeting their delivery windows.

According to Bloomberg, venture capitalists poured nearly $10 billion into rapid-delivery companies in 2021. The problem is these companies rely on expensive human capital. It’s still a growing industry, and the companies that will last are the ones investing in drones and drone technology.

This is the type of big, disruptive trend that can produce outsized returns if you know where to look.

Obviously investing in Google, Amazon, or Walmart won't produce the outsized returns you're looking for. But we've found a way to make money each and every time one of these robots makes a delivery.

I wish I'd known about this sooner.

Stay free,

Alexander Boulden
Editor, Outsider Club

After Alexander’s passion for economics and investing drew him to one of the largest financial publishers in the world, where he rubbed elbows with former Chicago Board Options Exchange floor traders, Wall Street hedge fund managers, and International Monetary Fund analysts, he decided to take up the pen and guide others through this new age of investing. Check out his editor's page here.

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