NASA has raised the rates it costs commercial customers of the International Space Station for the cargo and other services by a significant amount, which has left some businesses perplexed and disappointed. As part of a new low Earth orbit commercialization plan, NASA announced on February 25 that it was amending the commercial marketing pricing strategy it first released in June 2019. A price list for services such as freight to as well as from the station and the crew time to be able to carry out work was included in that plan, which set aside a portion of station assets for commercial applications outside research and development.
NASA stated in a statement posted on the agency’s website with very little fanfare that it was reviewing the price list “to represent complete compensation for the valuation of NASA services.” The decision was made after “consultations with stakeholders, existing market development, and expectation of potential commercial entities worthy of delivering similar services,” according to NASA.
The removal of the subsidy resulted in a substantial increase in the prices of such facilities. The cost of transporting one kilogram of cargo to the station, referred to as “upmass,” increased from around $3,000 to $20,000. The cost of returning the one kilogram from the station, known as “downmass,” increased from about $6,000 to $40,000. An hour of the crew member time, which used to cost $17,500, now costs $130,000.
Some ISS users were taken aback by the abrupt price jump, which took place immediately. When contacted by SpaceNews, an official with one firm, who spoke on the condition of anonymity because the company is still assessing the effect of the pricing reform, said he was unaware of NASA’s decision to increase prices. Nanoracks’ chief executive, Jeffrey Manber, stated, “NASA has not done a great job interacting with stakeholders.” “We’re in the middle of a conversation with a client when we get word of a significant increase.”
Nanoracks had to halt negotiations with two prospective buyers because of the price hike, he said, because the rise had “priced them out of their budget.” Another leader, speaking on the condition of anonymity, said NASA had not discussed modifying the pricing strategy prior to the announcement. According to the executive, the increase could cause some consumers to look for alternatives.
NASA didn’t go into much detail in its initial statement about its decision to switch to “absolute value” pricing. Such a reform, according to Manber, should have been addressed first by the NASA Advisory Council’s Regulatory and Policy Committee, about which he serves, but the topic had not moved ahead at its meetings.