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Matternet CEO breaks down drone firm’s watershed FAA approval

Andreas Raptopoulos talks to Modern Shipper about company’s prospects

Many Matternet M2 drones are branded with a UPS logo as part of the companies' U.S. drone delivery partnership (Photo: Matternet)

Correction: An earlier version of this story mistakenly stated that Matternet is a Swiss company. The firm is based in California and operates a subsidiary in Switzerland.

Amazon has been touting the prospect of drone delivery for over a decade now — but where are all the drones? So far, the company has faced crashes, layoffs and a service limited to pilot programs in California and Texas.

Its rivals haven’t fared much better. Currently, the most expansive U.S. drone delivery service is Walmart’s collaboration with DroneUp, counting six states and about 4 million households.

So what happened? In short, the Federal Aviation Administration has opted for an extremely cautious approach to integrating drones into U.S. airspace. 

To get off the ground, drone delivery firms first need to navigate a complex framework of approvals and certifications — otherwise, they’ll need to rely on temporary waivers to operate.

So far, no drone company has obtained the trio of certifications — Type, Production and Airworthiness — required by the FAA to operate commercially without a waiver. 

One, however, is ahead of the pack.

This week, Matternet became the first drone operator to receive an FAA Production Certificate, less than three months after the firm obtained Type Certification. The Mountain View, Cal.-based company is now the only drone delivery provider with both Type and Production certificates.

“This milestone now is an acknowledgement from the FAA that Matternet has established a quality management system and the manufacturing capability to produce the approved type design,” CEO Andreas Raptopoulos explained to Modern Shipper.

Matternet and its M2 drone delivery system have been flying in Switzerland, where it has a subsidiary, since 2017, bringing operations to the U.S. in 2019 through a partnership with UPS and establishing a U.S. headquarters in Mountain View, California.

The firm has been delivering health and wellness products with UPS under an FAA exemption called Section 44807, which allows it to produce non-Type-Certified drones at non-Production-Certified facilities. However, that exemption is set to expire at the end of September 2023.

As a Part 135 operator, UPS has been able to fly drones beyond the visual line of sight (BVLOS) of the pilot, which is a big deal in the heavily regulated drone delivery industry. But once Section 44807 sunsets, the only drone firms that can enable it and other Part 135 operators to continue BVLOS flights will be those with Type and Production Certification.

“These exemptions would go away, and you need to have a Type-Certified aircraft,” Raptopoulos said. “And the only way you can produce a Type-Certified aircraft is to have a Production Certification.”

Matternet’s M2 drone has a payload capacity of just under 4.5 pounds and a maximum range of over 12 miles.

The aircraft flies autonomously along predefined routes, commanded and controlled remotely from an operating center. Matternet uses geofencing technology to track it and Automatic Dependent Surveillance – Broadcast (ADS-B) sensors to detect air traffic along the route. If a malfunction is reported, the M2 automatically deploys a parachute or evasive maneuvers to avoid a crash.

One of the aircraft’s key features, though, is its precision takeoff and landing capability.

“The key focus for the Matternet aircraft has been to really build the safest, most precise, quietest aircraft that can serve urban and suburban areas,” Raptopoulos explained.

The M2 is able to take off and land within a space of 3 feet by 3 feet, allowing it to integrate into tight urban environments like apartment buildings and hospitals that most drones can’t navigate without specially designed infrastructure, like landing nests.

Another core component is the aircraft’s automatic battery and payload switching capabilities. When the M2 lands at a Matternet Station, it can swap out depleted batteries and load items for delivery entirely on its own, which helps keep it in the air longer.

But without the proper approvals from the FAA, it would all be for naught.

“It’s really about scale,” Raptopoulos said. “We are the first company in the U.S. to get Type Certification. And for drone delivery, BVLOS delivery, you need that Type-Certified aircraft.  So it really puts us on a path to scale the M2.”

Watch: Drone mailboxes and city-wide drone networks are on the horizon

Now, Matternet can produce and supply drones for other Part 135 operators when Section 44807 expires without needing to wait for further FAA approval. That’s a major advantage when it comes to capturing early market share in a young industry.

​​”Now we can put [the M2] in the hands of more Part 135 operators in the U.S. and in turn serve way more customers, in health care and beyond,” Raptopoulos said. “It’s an inflection point in the company.”

Matternet’s head start on FAA approvals is not the only thing that positions the firm to take off when the industry opens up under looser regulations.

Matternet makes more than just aircraft — it also builds the systems that power them and the network that houses them. 

The company’s delivery system consists of the M2 drone, the Matternet Cloud Platform and the Matternet Station. The Cloud Platform handles customer requests, generates routes, and monitors, commands and controls every asset in the network. The Matternet Station is the company’s hub for sending and receiving packages and is responsible for automated battery and payload swapping.

The combined system, Raptopoulos says, makes Matternet’s service ideal for health-related deliveries, which is where the company has placed the vast majority of its focus.

“There are certain mission-critical logistics jobs that need to get done for health care systems,” he said, “around the movement of urgent biological samples, around the movement of certain types of medicines that need to be urgently administered, around the use of blood units.

“And these things are happening today in health care, but the way it’s happening leads to a lot of inefficiency and waste. And a transportation system like Matternet … our health care customers see it as sort of a pneumatic tube in the sky, right?”

With drones, there’s no need for health care providers to dispatch couriers or for couriers to wait in traffic. The drones can fly directly to the customer and cut out the fat. And in Switzerland, where Matternet has years of experience flying commercially, the company has watched its health care customers transform their networks with the M2 delivery system.

“They can centralize inventory, they can centralize specialty pharmacies, they can centralize labs, which leads to further efficiencies when it comes to staffing and utilization of capacity,” Raptopoulos explained.

And because health transportation jobs are considered mission critical — and therefore high value — the unit economics of Matternet’s system are more in line with what health care providers are willing to pay than, say, on-demand food delivery services.

Having operated for close to half a decade already, Matternet has gotten a head start when it comes to understanding the technology stack needed for medical deliveries, particularly around chain of custody for sensitive shipments like chemotherapy treatments.

The firm has also learned how to “plug in” to whichever facilities it serves. For example, at a Florida CVS store within its UPS drone delivery network, Matternet takes up the space of just two parking spots. Other companies might need the entire lot.

With a pair of milestone approvals and a deep understanding of health care drone delivery, Matternet is as well prepared as any drone firm to dominate the market. But there’s still more Raptopoulos would like to see happen in the next year.

“For us, policy around BVLOS, seeing that being finalized is really going to be the next big thing that we’re looking to see accomplished in the U.S.,” he remarked. “I think there’s very positive momentum behind it.”

In March, an FAA Advisory Rulemaking Committee focused on BVLOS regulations recommended that the agency move forward with expanding operations beyond the pilot range of view. Part of the committee’s strategy involved using ADS-B sensors, which Matternet already uses, to keep an eye on air traffic.

If or when those recommendations are implemented, the firm’s long-term approach to scaling could pay off in a huge way. Raptopoulos had one piece of advice for other drone delivery companies — put your energy into regulatory approvals now or suffer later.

“That’s what Matternet has done, certainly, and I think the companies that have taken this approach will be the ones that will end up winning the space.”

Click for more Modern Shipper articles by Jack Daleo.

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Jack Daleo

Jack is a staff writer for FreightWaves and Modern Shipper covering topics like last mile delivery and e-commerce fulfillment. He studied at Northwestern University, majoring in journalism with a certificate in integrated marketing communications. Previously, Jack has written for Backpacker Magazine and enjoys travel, the outdoors, and all things basketball.