Drones Changing Logistics: Keller Rinaudo / CEO of Zipline

Like a sci-fi dream come true, a service using drones to deliver medicines was launched in Africa. This service that presents a challenge to the future of logistics has spread to Japan and the USA.

Fixed-wing drones made of styrene foam are used for air delivery. All flights are automated and do not require human control.
The delivery method is simple. A box with a parachute is dropped above the destination.
In Ghana, Zipline delivers COVID-19 vaccines to remote areas.

Transcript

00:03

Direct Talk

00:08

In the spring of 2022,

00:10

a major project began
on a group of isolated Japanese islands.

00:16

What is it?

00:20

It's a drone-based
medical supply transport service.

00:25

The service was developed

00:27

by the CEO of the American
start-up company Zipline, Keller Rinaudo.

00:32

Keller Rinaudo
CEO of Zipline

00:33

It just feels like teleportation,

00:35

and one doctor told me,

00:36

"God himself is
delivering blood from the sky!"

00:41

This groundbreaking service

00:43

has even been called
"A revolution in the skies."

00:46

So how will it change
the future of logistics?

00:51

Drones Changing Logistics

00:59

Our mission is to build a logistic system
that serves all people equally

01:03

in order to ensure universal access
to health care products,

01:05

but also transition logistics
toward a green energy future.

01:10

Today, Zipline operates distribution centers in
Rwanda, Ghana, the United States and Japan.

01:15

The reason we're so excited about
this partnership with Toyota Tsusho

01:19

and building instant
autonomous logistics here in Japan

01:22

is that the country is
obviously making big investments

01:26

in universal access to health care,

01:29

as well as the transition
to sustainability and green logistics by 2050.

01:37

As a new base for the
drone transportation services,

01:40

Keller chose Goto City
in Nagasaki Prefecture,

01:44

which includes 63 islands.

01:49

In partnership with a
Japanese trading company, Toyota Tsusho,

01:53

Zipline started a service
to deliver emergency medicines

01:56

to areas with scarce medical facilities.

01:59

So how does it work?

02:02

You know, the overall service of Zipline
is incredibly simple,

02:06

although the technology
behind the service is very complicated.

02:09

Any doctor, any nurse,
any community health worker,

02:12

or any person even just sitting at home

02:14

can pull out a smartphone,

02:16

log in, press a button,

02:18

saying what product they need at that time.

02:21

And then that product can be teleported
to those GPS coordinates.

02:26

The operations base is a facility
called the distribution center.

02:33

Upon receiving a request,

02:34

a staff member boxes medical supplies
stockpiled in the warehouse.

02:41

Then a special application is activated.

02:45

The box and the drone both have barcodes.

02:49

By scanning the respective barcodes
with the application,

02:53

the computer inside the drone
automatically recognizes the destination.

02:59

Being lightweight and durable,

03:01

the styrene foam airframe
is ideal for long-distance flights.

03:07

The box is placed inside
the body of the drone.

03:10

All that remains is
to set it on the launch pad

03:13

and press the launch button.

03:18

The delivery method is also simple.

03:21

The parachute-fitted box is

03:22

dropped above the destination.

03:27

We are dropping the package

03:29

from about 10 to 20 meters in the air.

03:31

We use a really simple paper air brake

03:34

that basically means that
we can gently deliver the package

03:36

into the mailbox of the customer.

03:39

And then the vehicle
will turn around, fly itself home

03:41

land at the distribution center,

03:42

and we can then typically have that plane
with a new package loaded

03:45

and out, making another delivery
just 3 to 5 minutes later.

03:50

The way all of our customers
experience this service

03:53

is, it just feels like teleportation.

03:55

And then that product can be
teleported to those GPS coordinates

03:59

ten times faster than traditional logistics
is capable of doing.

04:05

The company first launched its services
in the Republic of Rwanda in Africa.

04:11

The transport efficiency
of goods there was poor

04:14

due to a fragile
rural transportation infrastructure,

04:17

and women bleeding to death
after childbirth was a serious social issue.

04:23

So in 2016 the company
created a distribution center

04:27

in the capital city of Kigali
to begin airlifting blood for transfusions.

04:33

I still remember the conversation
with the Minister of Health.

04:37

We were saying, "Hey, we'll deliver
all these different medical products

04:40

to 500 different hospitals and
health facilities throughout the country."

04:43

And she looked at me and said,
"Keller, shut up!"

04:46

"I'll believe it when I see it.
For now, just do blood."

04:49

It's really hard to get
the right product to the right place.

04:52

And she was emphasizing
50% of blood transfusions

04:55

are being used for moms with
postpartum hemorrhaging after giving birth.

04:59

30% are going toward kids
under the age of five.

05:01

So this is an incredibly
important product for family health.

05:06

As a result, the transportation time
was reduced from 4 hours

05:10

to just 15 minutes.

05:14

Currently, 70% of transfusion blood
in Rwanda's rural areas

05:18

is supplied by drones.

05:23

What does Keller regard
as the value of this logistics system?

05:29

People think that
the magic is all about the drone

05:32

or all about the autonomous aircraft.

05:34

And in fact, the value is
in having an integrated service.

05:38

You can centralize things that are

05:40

urgently needed or
short shelf life or kind of long tail.

05:44

And by sending them just when they're needed,

05:46

you can dramatically reduce waste

05:48

while increasing access.

05:50

So that really is
the promise of this technology.

05:53

It's not just like, "Oh, won't it be exciting
if we have delivery that's ten times faster!"

05:57

That means we can totally change the way
that we imagine the overall system.

06:02

Up to now,

06:03

rural medical facilities
have had to stock more medicines

06:06

to prepare for emergencies.

06:10

However, by managing medicines
at the distribution center,

06:14

it's now possible to establish a system

06:16

provide an immediate supply
of necessary items

06:19

while also reducing waste.

06:25

The operations are
supported by locally hired staff,

06:29

so the drone transport system
not only improves logistics access

06:33

but also contributes to
social community development.

06:40

Some of the countries
where Zipline initially launched,

06:41

and I think you even now
see this happening in Japan,

06:43

are now leading the way in terms of
showing what regulatory reform is required.

06:48

And like if a country wants to be
on the forefront of like

06:51

autonomous airspace management and instant
autonomous delivery at national scale,

06:56

a big part of that is actually through
regulatory reform and evolution.

07:03

And so all of those are big investments
that Zipline has been able to make.

07:06

It's investing in infrastructure,

07:08

it's investing in people,

07:09

and it's investing in
entrepreneurship and technology

07:12

at a national scale in
every country where we launch.

07:18

How did Keller come up with
his vision of innovative drone logistics?

07:24

Keller was born in 1987
in Arizona in the U.S.A.

07:29

He says his desire to become an entrepreneur
developed during his high school days.

07:35

Honestly I didn't enjoy school that much.

07:37

And as a result,
I ended up getting a full-time job.

07:40

So I was working like
50 hours a week at a restaurant

07:43

all through high school
for almost all four years.

07:45

Working in the service industry,
particularly in the US,

07:48

where your wages suck,

07:51

you're getting paid very little

07:53

to work really hard

07:55

and like late into the night

07:56

and nine-hour shifts,

07:58

like you're constantly on your feet,

07:59

there's zero room for error.

08:01

You have to be really friendly all the time!

08:03

Interestingly, I think that taught me
more about leadership,

08:08

management, work ethic, responsibility

08:11

than maybe a lot of the things that I learned
in high school around the same time.

08:15

Even to this day at Zipline,
when we're interviewing folks,

08:18

we always love asking people like,

08:20

have they ever worked
in a fundamentally unfancy job?

08:23

And we love hiring people

08:25

who have at least had that kind of
an experience in their background

08:28

because it tells you something about, like

08:30

I actually think building really,
really important technology for the world

08:33

is often way less fancy
and less fun than it sounds.

08:39

While majoring in bioengineering at college,

08:42

Keller was also an avid rock climber.

08:45

After graduation, he visited Tanzania
in search of business opportunities,

08:49

and it was there
he got inspired with an idea.

08:53

And there was one
fundamental experience that we had.

08:56

We were actually in Tanzania

08:57

visiting a lot of different
health facilities and hospitals.

09:00

And because of the fast adoption
of of cell phones and smartphones,

09:05

there had actually
been these systems designed

09:07

that were doctors and nurses were texting in,

09:10

saying when they had an emergency,
when a patient was in need.

09:14

And he showed me
the database of thousands of texts

09:17

of like, "We need blood, we need antivenin,

09:20

we need anti-rabies,
we need anti-malarials, what have you."

09:24

And then I kind of realized,
"Wow, it's actually a database of death!"

09:27

Because

09:29

a one-way flow of information,

09:31

but then nothing was being done about it.

09:33

And the more we learned about logistics,
the more we realized,

09:35

"Wow, this is a service that really only serves
the golden billion people on the planet well."

09:40

So if you're lucky enough to grow up in

09:42

Osaka or Tokyo
or a city in the United States,

09:47

cool, yeah, you won the human lottery!

09:50

But for 6 billion people on Earth, you don't
have access to that class of logistics.

09:54

And as a result of that,

09:56

five and a half million kids
under the age of five

09:58

lose their lives every year

10:00

due to lack of access.

10:02

He started his business

10:04

based on the principle of
delivering goods equally to all people.

10:09

As he was searching for a place to expand,

10:11

a country which had recovered from civil war

10:13

by upholding the ICT
Nation concept came forward.

10:17

It was Rwanda.

10:19

We did not know how to integrate
with the national health care system.

10:22

We didn't know how to do things
as simple as like inventory management,

10:25

control systems and software that
would allow us to intake medical products

10:29

and then send them
to hospitals and health facilities.

10:31

And so that first year
was really scary and difficult,

10:35

and luckily the government
was an amazing partner to us

10:38

and we spent the first nine months...

10:40

You know, we've often asked
ourselves the question of,

10:43

“Well, what about an alternative history

10:44

where Zipline actually launched
in the United States first?"

10:47

I think given what we learned,

10:49

you know, I'm not sure
Zipline would have survived.

10:52

And I think the key for this kind of
technology to really thrive in any country,

10:56

the key is close partnership
between a government

11:00

that has a clear vision for
where it wants health care to go

11:04

and where it wants
infrastructure development to go,

11:07

and then entrepreneurial
technology based startups

11:11

that can bring the solution
and move lightning fast.

11:15

And so so many global experts
also told those countries,

11:18

like, "You can't do this,
you don't have enough money,

11:20

you don't have the technological know-how."

11:22

And now they've totally proven them wrong.

11:26

Paul Kagame
President of Rwanda

11:26

Keller launched his business operations
in Rwanda and Ghana,

11:31

and he has built up
a track record of success.

11:34

And business expanded further
during the COVID pandemic.

11:39

You know, when the pandemic began in 2020,

11:41

I remember sending an email to the board

11:44

like that week where
the initial lockdowns were occurring,

11:47

saying, "Hey, this is really bad news."

11:50

And then I remember
sending an email two weeks later

11:52

saying, "Never mind, I was completely wrong.

11:55

You know, we need to prepare to grow
ten X over the coming 12 months."

11:58

And in fact, that's exactly what we saw.

12:00

For example, in Ghana,
orders for vaccines go from X to ten X.

12:07

We've delivered a million doses
of COVID 19 vaccine,

12:10

4.5 million doses of traditional vaccine
in that country alone over the last year.

12:14

Obviously any global catastrophe
like the pandemic is incredibly tragic.

12:20

But I think one of the silver linings

12:22

is when humans are challenged
in this fundamentally new way.

12:26

And so when people were quarantined at home

12:28

and we needed to find new ways
of delivering medical products to them,

12:31

and we needed to find new ways
of operating a health care system where

12:33

where traditional
logistic systems are failing,

12:35

it meant that a lot of health systems

12:38

suddenly had this opportunity to just jump
straight to the new way of doing things.

12:44

With the start of operations
in the U.S.A. in November 2021,

12:47

the use of drones is now
also spreading in developed countries.

12:52

So what kind of potential does
the burgeoning drone business have?

12:59

I think we don't worry
about this as much now,

13:00

but when we were building
the first couple of distribution centers,

13:03

we were really worried,

13:04

like, "Are communities going to accept this?"

13:07

I mean, it's so weird,
it's so out-there, it's so sci fi!

13:10

And one doctor told me,

13:12

"It's as though, you know,
God himself is delivering blood from the sky!"

13:18

And so there's seven days

13:19

of kind of like magical science fiction
of providing this kind of a service.

13:22

And then on Day Eight,
it's completely boring.

13:25

And doctors and nurses and
health care workers just depend on it.

13:29

In fact, when I was at one hospital
watching a delivery be made,

13:33

a nurse looked at her watch,

13:35

and then looked at me, and she said,
"It's 30 seconds late!"

13:37

And to us, that's the
beautiful thing about technology.

13:41

You know, it shouldn't be like,
"Oh, it's so sexy!"

13:44

or "It's so exciting!"
or "It's so science fiction!"

13:46

Like, at the end of the day, you know,

13:49

the sexiness of technology
wears off very quickly.

13:52

What it comes down to is like,
"Does this transform the way

13:54

that we can care for patients or
does this improve people's lives?"

13:57

Logistics is like
it's the most boring thing in the world

14:02

and it's one of the
most important things in the world.

14:04

And we think that's pretty exciting,

14:06

showing that technology can actually improve

14:07

the lives of the people on Earth
who need the help the most,

14:10

not just the people who maybe
are in the richest 1% of humans.

14:16

Finally, we asked Keller
to tell us his motto.

14:23

The potential for human knowledge is limitless.

14:26

Curiosity is our scarcest resource.

14:30

Studying science and engineering
over the last 15 years

14:33

has made me realize that there is
no problem on Earth that can't be solved.

14:37

I think the thing
that's hardest to protect as

14:39

we grow old is protecting
childlike wonder and curiosity.

14:43

That's the thing that
actually limits our imaginations

14:46

and prevents us from learning and growing.

14:52

Potential for human knowledge is limitless.
Curiosity is our scarcest resource.