FedEx will run first commercial test of an autonomous vertical takeoff and landing craft in 2023

What’s smaller than a plane, bigger than a drone, and the latest addition to FedEx’s delivery tech experiments?

An autonomous, hybrid-electric vertical take-off and landing (VTOL) system called Chaparral, which was unveiled by the aviation startup Elroy Air earlier this year. This morning, FedEx announced that it will conduct a first-of-its kind test of Elroy’s cargo-carrying autonomous VTOL, sometime in “early 2023.”

Why it matters: The tests, in which the VTOL will ferry goods between FedEx sortation locations, will be Elroy’s first pilot within a real-life, commercial logistics operation.

Elroy claims the aircraft can carry 300–500 pounds of cargo for up to 300 miles, and do so in a way that’s faster, cheaper, and more fuel-efficient than ground transport or manned aircraft. It also says the aircraft’s helicopter-esque vertical takeoff makes it a more flexible logistics option than a normal plane—there’s no runway needed, for instance.

• For reference, the drones used by companies like Zipline and Wing are capable of carrying packages that weigh only a few pounds.
• The companies are still evaluating the range and weight for the upcoming tests, according to Kofi Asante, VP of strategy and business development for Elroy Air.

Elroy, which was founded in 2016 and has raised $56 million in venture funding to date, also has agreements in place to provide 500+ Chaparral aircraft to commercial, defense, and non-profit customers. It says these agreements amount to $1+ billion in demand.

• The company also has contracts with the US Air Force and a partnership with NASA.

For its part, FedEx is specifically interested due to the Chaparral’s potential as a “middle-mile” solution, referring to the transport of goods from one facility (e.g. a port or warehouse) to another (e.g. retail store or distribution center). Next year’s FedEx pilots will provide an initial testing ground for many of the company’s claims around efficacy in this space.

Looking ahead…The autonomous aircraft market is projected to be worth nearly $325 billion by 2040, per a report from the Aerospace Industries Association and management consultancy Avascent.