DP World and Virgin Hyperloop One hope to pave the way for wholesale changes in the logistics sector
Until a few years ago, a ground transportation system to move cargo and people at speeds exceeding 1,000kph seemed an idea fit for the pages of a science fiction novel. Now, experts say the technology – known as hyperloop – is seemingly just around the corner and ready for deployment.
Last week, Virgin Hyperloop One and UAE ports operator DP World announced they are forming a new firm, DP World Cargospeed, that will use hyperloop’s vacuum tube-based technology to deliver goods at previously unprecedented speeds. According to DP World chairman Sultan Ahmed bin Sulayem, hyperloop means any cargo can be moved around the world in 14 hours “whether you are in China or on the North Pole”.
According to Virgin Hyperloop One’s chief technical officer, Josh Giegel, the implications for the movement of goods across the GCC are enormous. “It’s moving at the speed of flight for the cost of trucking,” he says. “You could put a central distribution system here [Dubai] and be able to distribute all your goods, within a couple of hours, all throughout the GCC. You’d be able to have same-day shipping.”
For the logistics sector, the possibility of rapid delivery comes at a time of significant changes in the industry. According to data from Statista, e-commerce is set to grow to $4tr globally by 2020, prompting a dramatic shift in consumer and business behaviour, and the pressing need to be able to respond to each.
In parallel, the market for express and parcel freight is estimated to grow to $156bn by 2025 as e-commerce becomes increasingly global. Currently, air cargo accounts for less than one percent of world trade tonnage, yet 35 percent of the value is carried by air – suggesting the expanding market is limited by airline and airport capacity.
In theory, the hyperloop will go a long way to address these challenges. With top speeds estimated at 1,000kph or more, using a completely electric system with direct emissions, the system could be as fast as air travel – with far fewer drawbacks and delays. “Cargo can get there far cheaper because it’s less energy-intensive than a plane,” Giegel notes.
According to Geiger, the benefits of using hyperloop to move cargo are magnified by the fact that doing so won’t require additional networks – cargo can be moved on the same pods and tubes as passengers, at night or at off-peak hours, for example.
Importantly, Geiger notes that the convenience and speed of hyperloop travel – cutting travel from Riyadh to Jeddah from 10 hours to 76 minutes, for example – does not mean that is will be prohibitively expensive.
With a bold vision for the future, Dubai has always pushed the boundaries of innovation”
Sultan Ahmed bin Sulayem, DP World chairman
“This is going to be a system for everybody, not just the super-rich,” he says. “[But] there will be a little bit of premium that you pay because it’s so fast. But it’s not something significantly different than the ticket prices that exist. The more people that ride hyperloop, the lower the cost is for the actual system, and the more goods that travel on hyperloop, the lower the cost for the system.”
Sir Richard Branson – the board chairman of Virgin Hyperloop One – noted that the system also has the potential to remove many of the hassles inherent in air travel, such as by transporting passengers between two airports in minutes, saving time by avoiding traffic and without the need to go through customs or immigration again. “Suddenly, those two airports effectively become one airport,” he says. “All the misery of travel can be taken away.”
If Branson is right, the hyperloop may even end up transforming – or eliminating – ports themselves, freeing up land for other kinds of developments. “Ports are often sitting on valuable land,” he says. ‘But a hyperloop could be put on one of these lovely islands created off Dubai, the freight could be unloaded there, put on a hyperloop and shipped 20 miles inland. All that port land could be sold off for hotels, leisure.”
It is precisely this future that makes hyperloop a technology that cannot be overlooked by ports operators such as DP World. “Today our role is not in the port. Our role starts when the cargo leaves the factory. We know that there are a lot of inefficiencies in the supply chain,” bin Sulayem says. “This is disruptive innovation that we can’t ignore. Our investment is in survival.”
► Elon Musk discusses his idea for transport through low-pressure tubes with venture capitalist Shervin Pishevar.
► Musk, at Pishevar’s urging, releases a white paper outlining the plans in August.
► Shervin founds a hyperloop start-up and starts building a team.
► Hyperloop One recruits former Cisco president Rob Lloyd and raises more than $11m in funding.
► A live Propulsion System Open Air (POAT) test is completed, validating the design of the motor.
► In August, DP World signs an agreement to study a hyperloop route to improve Jebel Ali Port’s efficiency.
► Dubai’s RTA agrees to evaluate a Hyperloop One link between Dubai and Abu Dhabi.
► Images of the first full-scale Hyperloop test track are revealed at the Middle East Rail event in Dubai.
► Hyperloop One and Richard Branson’s Virgin Group sign a strategic partnership.
► Sheikh Hamdan Bin Mohammed Bin Rashid Al Maktoum, Crown Prince of Dubai, helps unveil Virgin Hyperloop One’s Dubai pod during Innovation Week.
► DP World and Virgin Hyperloop One introduce DP World Cargospeed.