The Air and Space Forces are shifting orbital cargo research away from a primary focus on large reusable rockets and toward smaller commercial reentry capsules designed to move supplies to austere sites. The change centers on finding low-cost pods that can carry substantial cargo and support rapid delivery to remote bases or other operational locations, an Air Force Research Laboratory spokesperson told Breaking Defense.
The main vehicle for that work is AFRL’s Payload Delivery System, or PDS, a program jointly funded by the two services. The Space Force is the lead service, while AFRL is working with commercial companies on challenges that span transport to orbit, reentry, and delivery at an austere site on land or at sea. The effort is focused on developing and assessing cargo reentry systems rather than providing an operational delivery service.
The budget figures show the scale of the current effort. For fiscal 2026, the Air Force slated $30.6 million for PDS and the Space Force slated $21.2 million. The Air Force requested $32.3 million for fiscal 2027, while the Space Force requested $16.5 million. The funding supports research, technology development, demonstrations, and commercial engagement.
The shift follows a drawdown in the original Rocket Cargo Vanguard effort. Launched in June 2021, Rocket Cargo examined the use of rockets carrying as much as 30 tons of logistical supplies from the United States through space to distant bases and battlefields. The Air Force provided no Rocket Cargo funding in its fiscal 2026 budget, while the Space Force allocated only a few million dollars in fiscal 2026 and fiscal 2027. Orbital cargo research is continuing through PDS, Point-to-Point Delivery, and related efforts as the original Rocket Cargo effort is reduced.
AFRL describes the capsule approach as an industry trade study involving both established aerospace companies and smaller firms. Potential vendors named by the laboratory include SpaceX, Blue Origin, Rocket Lab, Sierra Space, Varda Space Industries, Inversion Space, and Outpost Space. The stated objective is to develop low-cost reentry systems with enough cargo capacity to reach austere delivery sites and to maintain a broad commercial vendor base.
The technology is developing alongside commercial demonstrations. NASA has long used large reentry capsules to recover experiments and astronauts, while newer companies are developing smaller vehicles for returning products made or processed in orbit. Varda and Inversion are pursuing commercial uses including pharmaceuticals and microchips. Factories in Space counted 65 companies worldwide working on cargo reentry vehicles at some stage as of last September. SpaceX launched its first Starfall pod demonstration on June 23, while Blue Origin had not yet launched one at the time described by Breaking Defense.
PDS is one part of a broader set of orbital logistics projects with separate budgets and missions. The Space Force’s Servicing, Mobility, and Logistics program manages a Point-to-Point Delivery effort focused on orbital supply prepositioning, operational downmass, and responsive suborbital and orbital delivery operations. The Point-to-Point Delivery program received $3.9 million in fiscal 2025, was slated for $19.3 million in fiscal 2026, and had a fiscal 2027 request of $9.7 million, with similar annual amounts projected through fiscal 2031.
The Point-to-Point Delivery effort is expected to use technology from commercial independent research and development and AFRL’s Rocket Cargo work to study reference missions. A related AFRL contract vehicle, Rocket Experimentation for Global Agile Logistics, funds demonstrations and Point-to-Point Delivery-related technology rather than the development of commercial rockets. Sierra Space and Rocket Lab announced undisclosed REGAL awards in 2024 and 2025, while AFRL awarded Blue Origin $1.3 million and Anduril $1 million under the vehicle in September 2025. AFRL later added $11.7 million to Blue Origin’s contract, bringing its total to $13 million.