Future SpaceX Hourly Delivery Monopoly and the Expansion of the SpaceX Fleet

SpaceX will roll-out hourly delivery of packages for years before flying passengers and this will make them tens of billions of dollars each year. I, Brian Wang, have analyzed how SpaceX will have a monopoly on 1-6 hour package delivery for tens of billions of dollars. This will fund the human passenger global infrastructure and provide massive profits while performing millions of test flights to prove human passenger safety.

Ultra-rapid delivery of packages is clearly the precursor to point-to-point human travel. It will support massive volume increases, cost reductions and safety testing.
This is just like mass consumer electric cars and trucks being the precursor platform for self-driving robotaxis.

Projected SpaceX Starship capabilities are all at the level that Elon Musk describes as target in his Air Force pitch day interview.

Fedex makes about $40 billion a year from Express delivery which is mainly next-day delivery. DHL also makes nearly $20 billion per year from the express delivery. The express delivery market is continuing to grow.

Same Day delivery is growing at 23% per year.

The price of same-day delivery is about $130 per 5-pound package. This is about $60 per kilogram or more if the package is lighter. 65% of businesses that currently use express delivery are looking to move to same-day delivery.

The Starship rocket will provide SpaceX with a monopoly on multiple same-day deliveries. This will be between major cities.

Elon Musk talked about getting the price of a Super Heavy Starship down to about $2 million for 100 tons and having three launches per day. This would be $20 per kilogram. Hourly delivery around the world will only need the Starship. This could reduce the cost to $1 million which would mean $10 per kilogram.

SpaceX would need new spaceports at major cities. They would need three to four Starships on each route to enable launches every 4 hours or less. Each Starship would need 7 to 9 Raptor engines. A larger engine configuration could be needed to enable the longer routes.

SpaceX might initially have a $20 million per Starship launch cost. This would be about $200 per kilogram. Starting at $300 per kilogram for deliveries should still have a profitable business. New York to London. New York to Los Angeles. New York to Toyko. etc… would be the initial markets. Ten spaceports and 30 Starships could get a solid global delivery business going. Starships can connect delivery sorting hubs for each continent to another continent and shave eight hours off of delivery time. Bringing Starship launch costs down would enable a far larger rapid delivery business.

If each Starport cost about $250 million and each Starship cost $10 million. 40 Spaceports would cost $10 billion and 500 Starships would be $5 billion.

If ten Raptor engines were needed for each Starship (extra 2 engines for spares), then the one Raptor engine per day rate of production would mean 36 Starships built in the first year. There would be 100 flights per day with a 36 Starship fleet.

A basic global delivery service could start within 18-30 months of the completion of Starship flying with payload. Extra Raptor factories would enable the completion of the 40 Starport and 500 Starship fleet in about 5 years. This would be over 1000 flights per day.

SpaceX will monopolize the international 1 to 6-hour delivery markets. Any city pairs that would take longer than an 8-hour flight would have exclusive ultra-rapid delivery via SpaceX. There could also be a focus on continental and regional distribution and sorting hubs.

This would be the years before SpaceX proves rapid passenger rocket safety. A full year without cargo rocket accidents with over 1000 flights per day would mean the service would be safe for human passenger service.

The future history of SpaceX will be as follows:
* SpaceX capture over 60% of the commercial launch market. This has happened.
* SpaceX launches and starts operating Starlink mega constellation. 60 production Starlink satellites were launched and the initial service will start in 2020.
* SpaceX flies Starship to orbit in 2020. In 2022 or 2023, SpaceX rolls out its ultra-rapid delivery package service.
* Around 2027, SpaceX is operating over 1000 flights per day for 1 to 6-hour international deliveries.
* Around 2030, SpaceX proves safety of rockets after millions of flights for human one-hour anywhere passenger service. There would already be over one-hundred Spaceports and thousands of Starships.

SOURCES- SpaceX, business wire, Trefis (Fedex, UPS, DHL), Analysis by Brian Wang, Statements from Elon Musk from Interview, What About it? by Felix Schlang
Written by Brian Wang, Nextbigfuture.com

78 thoughts on “Future SpaceX Hourly Delivery Monopoly and the Expansion of the SpaceX Fleet”

  1. It was probably hard to tell, but I was specifically responding to the parenthetical “(maybe sole)” part of his comment, ie that there’d be CO2 as well as H2O emitted.

  2. The logistics of these flights mean that just about all of them will have a day AND night leg – but if you presume that you’ve got equal flights in each direction, I guess the water vapor effect will probably cancel and just leave the effect of the CO2.

    I suspect that economies of scale will create a greatly reduced CO2 balance compared to airplanes.

  3. Yup, while I’m super excited about this technology, I always think about the carbon emissions of all those extra rockets, and keep thinking that if not done “zero net carbon”, this will only accelerate the extinction of our specie… NOT excited, all taken in account… Does human really need space technology, or does this only add to the pool of non required possibilities that leads us into the wall of climate change…

  4. So, depending on the trajectory and timing of the journey, we might actually end up with a cooling effect. Crazy.

  5. I agree. It is one thing to identify a potential market, and another thing to start predicting profit margins. I think it will be a tight market, with slim margins. There are not that many situations justifying courier delivery etc., but it happens. By the time this service becomes profitable there also may be alternative methods for extreme delivery.
    But it is good to try and imagine applications for BFR beyond Starlink. Whatever is developed will need to be self-sustaining. Failure would not only kill the company, but put a damper on future investments.

  6. H2O has opposite effects depending on altitude; Low altitude clouds tend to be warming, high altitude clouds cooling. (Think of the volcanic dust effect on weather, only here the high altitude “dust” is ice crystals.)

    I treat this as concerning the clouds only, because the water level in the troposphere can’t really be altered significantly by deliberate injection, it’s in constant turnover with huge flows. So we’re only talking about the upper atmosphere, where it’s so cold that even at 100% relative humidity the atmosphere holds practically no water at all.

  7. My previous employer was a stamping operation specializing in ultra-fast turn-around; In one case GM brought the first car off the end of the production line on a Friday, did a pressure test, and realized they’d forgotten to cap the end of a HVAC duct. A helicopter delivered the duct to us, we worked 24 hours a day over the weekend, and on Monday we delivered the first shipment of parts to close it off, also by helicopter. Got a pretty good price for those parts.

    Usually when something needs to be delivered by the fastest means possible, price no object, it’s because somebody somewhere screwed up BIG.

  8. Sorry, I’ve been dealing with little kids too much. Prone to start explaining every little thing as “a lesson”.

  9. People living in inland cities have already abandoned good weather, nice beaches and surfing, they won’t notice missing out on one more thing.

  10. Airmail is good example. It think this would be integrated into the existing infrastructure, not a SpaceX consumer facing service. Customers would use Fedex, DHL, USPS and they’d offer Rocket Express in various forms. Up to them to compete on how well they handle the final Express delivery.

  11. SpaceX deals with the first/last mile by selling the service to Fedex ,DHL etc. and letting them worry about it. They already have the distribution infrastructure in place at both ends. They understand the business and customers. They’re the ones fearful of this as competition.

  12. I would analyse a business case attempting to use all parameters including my feelings for it instead of sticking to only one.

  13. Amazon does it by putting large warehouses a “few” hours away in the ugly parts of nowheresville where rent is cheap so they can ship from the big warehouse to the little warehouse to your door.

    They don’t hand deliver by rocket from the factory in Vietnam to your doorstep.

    Long haul delivery viability is first, foremost, and finally about the cheapest way of getting something from A to B. That’s why cargo ships travel slowly. The difference between 17 knots and 25 knots is a 3x increase in fuel consumption.

    UPS and FedEx trucks are basically big cubes because that reduces cost. UPS trucks don’t have driver doors because that reduces cost.

    The dirty secret of premium pickup and delivery is that it probably does not cost that much more because the delivery infrastructure already exists but people pay more because they have no choice. In other words UPS could slash the cost of premium delivery price and still be profitable.

  14. “Spaceports 20 miles off coast”

    So right off the bat you will eliminate quick service to inland cities.

  15. Contract requirements. People wonder how some companies enjoy very sweet contracts, that seem to be completely fraudulent and they start crying “corruption!’
    I once worked on a project installing an assembly line for a Ford Motors parts (ABS valves) supplier. One of the requirements specified punitive damages of ONE MILLION DOLLARS for every hour of downtime of their main assembly line due to parts unavailability. The company (Kelsey-Hayes) had originally purchased their equipment from another company and it was unreliable. They kept a helicopter on standby and flew parts directly to Ford, as they became available.
    Our project provided 1000 valves/hr. I was on the installation team (Service Engineer) and stayed on the project until all of the bugs were worked out.
    We made a ton of money on that project- but we could have very easily lost our asses. When we had breakdowns and needed parts in order to keep up with production demands (you see they passed their punitive damages on to us), they used the fastest possible means of delivery.
    There is definitely a market for this.

  16. the FAA regulations would be the same. So you have to put it someplace where the sound and fumes work out. Thus we will likely need a floating launch pad out in a bay or lake or something 50 miles out from a city. It is good thing someone makes inexpensive tunnels for high speed electric pods to quickly to regional locations

  17. Elon’s solution assumes cities will never tolerate large volumes of drones overhead and would connect Ocean Spaceports with Loop tunnels and Autonomous BEV ground vehicles. The Boring Company is an alternative to flying for making transport in cities 3D.

  18. If SpaceX intends anything like this massive scaling, they’ll also plan to invest heavily (as soon as they start to get serious Starlink revenue) in zero net carbon Methane production and LOX production with renewable energy.

    Ocean wind turbine farms could power methane/LOX production on dedicated platforms near the Spaceports.

    They need mature versions o this technology for Mars and other Spacefaring ISRU anyway but this huge expansion of rocket use on earth could only be possible (for a climate change sensitive company like SpaceX) if it’s done zero net carbon.

  19. This is why a SpaceX plans to put Spaceports 30km out at sea from port cities. These ocean a Spaceports could be built at shipyards and towed into place.

  20. Spaceports 20 miles off coast with a logistics hub transferring packages to drones delivering it to rooftops in a city with 70 miles/hour would be quick enough, whilst keeping noise levels low for the city.
    Transfer and travel of drone might still be 45 minutes, so total time could be about 2.5 hours rooftop to rooftop.

    My argument is that this is for highly vapuable and specific items first, which could be priced at 100k per package for example.
    Think of a concert tomorrow where a certain instrument is needed.

  21. I see a lot of critisism in the comments. Many are wondering who would need such a service.
    I think you all need to think a little more out of the box.
    Of course ordering sushi from tokyo will not be the first application, if ever.

    But there are businesses that despirately need certain things as fast as possible.
    SpaceX itself, for example, when struggling to get one of its first Falcon 1 launch ready, was dealing with a broken readio.
    Hundreds of engineers on an island but there was no radio shop to fix it.
    They used Elon Musks private jet to have someone fly back to LA to go to a radio shop and buy one, and fly back. They calculated this was way ‘cheaper’ than having hundreds of engineers doing nothing and waiting for 2 weeks to have a radio.

    I know from ASML that Intel, Samsung and other chip producers lose millions per hour if a machine breaks. If a custom made part can be send over wihin hours, this saves millions.

    This idea is not for standard products. Standard products can be stored in a logistics hub near a city.
    This is about those times that highly specific things are needed ASAP, no matter the cost.

    I wonder if spacex would just invest in this between 2 cities, new york and hong kong for instance, and start operating 10x per day, but at high premium pices, how many businesses suddenly have specific things that need to be in Hong Kong NOW.

    SpaceX could investigate this by having many interviews with managers to ask how often they needed things shipped FAST.

  22. Heh, notice you didn’t mention the noise. I live in the flight path of the local airport, it gets pretty noisy at times, but at least I don’t have my windows shattered or get micro-hemorrhages from the sound level.

    Now, admittedly the flight path for a rocket is mostly straight up and down at the ends of the trip, so what you’re looking at is a mostly circular exclusion zone around the launch point. But you’re still going to have a fairly large zone around the pad where nobody can be unprotected, and a much larger zone where the noise is extremely annoying.

  23. I’ll admit I have trouble thinking of any cargo that would make a profitable intercontinental-in-hours business.

    But I CAN think of a whole lot of similar comments in the past where people could not think of any application for a new tech, and years later everyone was using it.

    Why would anyone pay to send a message out to nobody in particular? (broadcast radio)

    Why would anyone ever need more than 64k of computer memory (Bill Gates actually said this)

    I never thought I’d be so rich as to afford an automobile, or so poor as to not have servants (quote by Agatha Christie)

  24. Now that right there is what I would call one very ambitious business model.
    Gotta admit though- it makes a lot more sense than most other plans I have seen.
    Tourist resorts and asteroid mining are still bleeding money in the short term.
    Pipe dreams for now, but in a few decades- who knows?

  25. Sure – except with intact delivery of the payload and recovery/re-use of the re-entry vehicle, and those on the receiving end are happy to be targeted.

  26. Yeah – except we HAVEN’T been offsetting carbon much. So I don’t think it’s a mistake to examine new tech proposals to see how much damage they’ll do.

    Though I would worry more about ozone layer damage.

  27. Some variant on the ‘drones’ approach MIGHT work, if it eliminates most of the cost and delays of humans in the loop.

    It’d need an automated re-entry capsule drone that can convert to subsonic flight after dropping off a small ‘last mile’ delivery drone (or several).

    Load a bunch of the re-entry drones into the rocket, and they can be dropped and split off to a bunch of different cities, spit out their delivery drones, then fly to a collection point near the city.

    I’m still having trouble thinking of anything worth paying for this commonly enough to justify operating the service, but I suppose if you get it cheap enough the demand would follow.

  28. You will not be able to build spaceports near cities because of the noise that a rocket makes taking off or landing. People are already filing lawsuits over airport noise and the noise from the rockets will be many times louder. That is one reason why rocket launch sites are in remote areas and not right next to cities.

  29. How does adding ice crystals far above the typical altitude level of commercial aircraft, play into the mix of atmospheric effects? How will additional oxygen from solar dissociation of water molecules affect upper atmospheric chemistry?

  30. Fun fact. Every rocket launch from Kennedy Space Center in 2017 contributed to 0.00000062% of global CO2 emissions. You’d need to launch ~ 5,000 Falcon Heavy’s a day to pollute as much as the commercial airline industry. (And that’s assuming two stages, not Single Stage as proposed here) @elonmusk is right to focus on the rest of the transportation industry.

  31. The cool thinking about 1 hr travel from nyc to Tokyo is that you could wake up at 7 am fly to Tokyo by 9;00 pm …. drink lots of sake….stumble around drunk…. get on the next flight To Amsterdam for lunch,,, smoke medicinal herbs,,,….pass out…..then wake up again….And do it all over again…In nyc,,,

  32. Transfer transit technology…. they print your clone using a bioprinter…. then when your Trip is finished they download your memories and destroy your clone body…

  33. Yep, among others. Like food-borne animal and human diseases.

    A hyper connected world has that particular drawback.

  34. Amazon, Ali Baba et al have managed this problem pretty well, with Amazon even providing same day delivery or some specific localities. Ali Baba and others focusing on the overseas market seem to have gone towards the cheaper, massive route of sending everything by ship and mail.

    Having a quick route to far away destinations certainly could help these companies improve their long haul delivery times and even offer them at a premium.

  35. Same day delivery can be split in to three parts (eliminating layovers at warehouses):

    1. Get package from origin to airplane
    2. Get airplane from City A to B
    3. Get package from airplane to destination

    Theoretically SpaceX could offer a faster step #2 (albeit a much more expensive transition between cities- jet travel is cheap).

    But how does SpaceX deal with the first/last mile of the delivery process? Do they complete the last mile by ejecting a drone at 100,000 feet? How often do the priority rockets lift off? Because the logistics people send planes with regularity.

    Also there are numerous… other human-in-the-loop steps that deter what I will coyly describe as “Malicious RUD” via overnight packages.

    Finally the cost of high priority overnight shipping can be split in to several parts:

    1. Cost to send a delivery person to you, right now, to pick up your package
    2. Cost to send the delivery person directly to the airplane
    3. Cost to ship your package
    4. Cost to send a delivery person to deliver your package
    5. Profit

    Steps #1 and #2 can be expensive. Step #4 may actually not cost much depending on when the package is being delivered as the logistics company can take its priority in to consideration when optimizing deliveries. For real same day delivery step #4 is expensive because it is a special delivery. Step #3 for SpaceX is more expensive. Step #5 for most everyone is the same as every company wants to profit.

  36. The processing, sorting, loading and unloading will take some time, adding several hours to the trip time.

    Your sushi will spoil. And that’s without taking the high g’s into consideration.

    But some other stuff could endure that pretty well.

  37. We cannot be looking at every project based upon its individual carbon footprint. We actually need to offset all of transportation and industry instead of getting each component to zero. We still move things and make things and then we grow trees, kelp and algae blooms to offset. Just like we do not look at the foodprint of every activity. Is each industry feeding all of its workers? Instead we have farmers and agriculture feed everyone and everything.

  38. This will all be single stage. There will be no stage separations. Elon has already talked about 6000 mile range with a Starship single stage. Adding a few more engines or getting some other weight improvements should increase the range. There is also routing and making a stop every 20 minutes. Fly New York to LA and then LA to Tokyo and then Tokyo to Hong Kong etc…

  39. I’m not sure the economics make sense. To get 1-6 hours delivery, you’re effectively dealing with point-to-point deliveries – from New York City to London, and NOT New York City to Devon, for example. As quickly as you can get from NYC to LON, once you’re there, you have to unload the vehicle (a big job), load those onto delivery trucks, then navigate the traditional delivery infrastructure.

    That’s not to say that rocket delivery of international packages might not be a big thing – delivering by airmail used to be a big deal, but now it’s simply part of international logistics.

  40. Difficult to say until the vehicle is entirely operational. The primary (maybe sole) greenhouse-relevant emission from a Raptor should be water vapor, which is a serious greenhouse gas. There’s also the relevant emissions for manufacturing the methane in the first place, and the emissions necessary to create the vehicle, but those source-dependent – if that was powered by a nuclear plant, it would be negligible.

    So it comes down to economies of scale – if you’re delivering packages at Starship scale, you’re likely creating vastly less emissions, even though the gas itself is a worse contributor to the greenhouse effect.

  41. I would worry more about green house gases… what’s the carbon footprint of spacex rocket vs, a jet plane for intercontinental delivery…

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