$300 a kilo: space cargo costs falling faster than steam ever did

Sending cargo into orbit is getting cheaper faster than shipping freight did during the steamship revolution of the 1800s, and the cost could fall by more than 90 per cent again by 2040, according to Cambridge-led research that suggests space is fast becoming a marketplace rather than a moonshot.

The study, published in PNAS Nexus by the University of Cambridge’s Bennett School of Public Policy and the Politecnico Institute of Turin, analysed more than 4,400 launches between 1960 and 2025, the largest global dataset of rocket launches yet assembled.

The average cost of putting a kilogram into orbit has already dropped from $87,023 in 1960 to $3,868 in 2025, a fall of more than 95 per cent. Every time the world’s total volume of space cargo has doubled, the cost per kilogram has fallen by 21.2 per cent, outpacing the 15.5 per cent decline recorded for transatlantic wheat and cotton freight after the SS Savannah’s pioneering steam crossing in 1819. It is also falling faster than the cost of solar panels, long the textbook example of a technology getting cheap at speed.

“The cost of space launch technology is now falling faster than during one of history’s greatest transport revolutions,” said Alessio Terzi, the assistant professor who led the research.

“Steamships cut costs through explosive growth in global trade. Space technology, by contrast, has achieved even steeper declines at a far smaller scale. This suggests there is plenty of scope for further cost reductions and the industry may now be on the cusp of a comparable economic boom,” he said.

If the trend holds, the researchers project a kilogram to low-Earth orbit will cost $1,600 by 2030 and just $300 by 2040. SpaceX’s Starship rocket could bring costs down to about $1,000 a kilogram, making larger orbital projects far more viable.

For UK entrepreneurs, this is not an abstract race between billionaires. Britain’s space industry is dominated by small firms, with roughly 90 per cent of its businesses turning over less than £5 million, building the components, satellites and services that cheaper launches make commercially sensible. New business models are already emerging: London startup BioOrbit is exploring pharmaceutical production in low-Earth orbit, Space Solar is developing space-based solar power, and NATO’s innovation fund has backed a British startup building space factories.

“Rapidly falling launch costs could open the way to space colonisation and commercial activity far beyond low-Earth orbit. Ever cheaper launch costs could open up possibilities around solar power production in orbit, asteroid mining and a self-sustaining economy producing fuel, food and infrastructure in orbit or on the moon,” Terzi said.

The market has accelerated sharply since 2020, with payload launched into orbit growing by about 31 per cent a year, against 4 per cent annual growth between 2000 and 2019.

There is, however, a catch familiar to any small business dealing with a dominant supplier. SpaceX accounts for roughly 75 per cent of total payload sent to orbit, a grip on the market that Terzi has previously estimated exceeds the East India Company’s hold over shipping to the East Indies in the 19th century.

“Economic theory suggests that a profit-maximising quasi-monopolist will have a strong incentive to charge higher prices to potential clients, and some evidence already points in this direction,” the researchers said, warning that pricing power, along with geopolitical tension, could slow the decline.

The history of commercial spaceflight is also littered with expensive failures, as investors in Virgin Orbit’s bankruptcy can attest.

Still, the direction of travel is clear. “As launch costs fall and commercial activity expands, we are entering an era where spacefaring is like any other economy, driven by incentives, trade and investment, and economists should be paying more attention,” Terzi said. Business owners might reasonably conclude the same.