In 2013, Tesla and SpaceX CEO Elon Musk published a paper, ‘Hyperloop Alpha.’ His intention? Just to create “a new open-source form of transportation that could revolutionise travel.”
Citing his inspiration for this revolution, Musk referred to California’s divisive high-speed rail project:
How could it be that the home of Silicon Valley and NASA’s Jet Propulsion Laboratory – doing incredible things like indexing all the world’s knowledge and putting rovers on Mars – would build a bullet train that is both one of the most expensive per mile and one of the slowest in the world?
The underlying question was this: Why are we investing in mass transit alternatives to driving or flying if they are not better than driving or flying?
Musk’s paper initiated a fiercely competitive race to build Hyperloop (pre-occupied with space travel and electric cars, he did not “have any plans to execute”). Three years on, Hyperloop Transportation Technologies (HTT) and Hyperloop One are the major players, with the lesser-known Canadian TransPod also in the frame.
Simply put, Hyperloop involves propelling cargo or passengers in levitating pods through tubes containing virtually no air. The autonomous pods will be able to exceed the speeds of airplanes over long distances due to this non-contact levitation and low aerodynamic drag.
Hyperloop One announced a feasibility study with the Roads and Transport Authority of Dubai on 8 November 2016, which will lead to the creation of their first route between Dubai and Abu Dhabi by 2020. They claim this will cut the two-hour bus journey to a 12-minute ride. The company also anticipates building a route to Qatar in time for the 2022 Fifa World Cup. HTT has opened an office in Slovakia and wants the first stage of its European route to be complete by 2020. TransPod is working to have a commercial prototype by 2020.
Hyperloop sceptics offer many reasons why none of these milestones will be achieved; not least the cost (estimated to be at least 10 times higher than Musk’s original estimations) and the numerous technological challenges (maintaining the vacuum, eliminating unbearable g-force for passengers). As yet, Hyperloop remains closer to concept than reality.
However, it is an idea backed by strong industry forces. Global container port operator DP World recently invested $50 million in Hyperloop One. Following the investment, DP World’s chairman and chief executive joined Hyperloop One’s board where he will sit alongside Jim Messina, the former deputy chief of staff to President Obama. The company also appointed Uber’s former CFO as their financial adviser in the same week.
Disrupters solving disruption?
DP World’s investment, combined with the numerous challenges that come with propelling real people through vacuums, suggests that cargo will be Hyperloop’s first success story.
Port congestion is a worldwide problem, hitting the headlines this year in Asia, Europe, the U.S. and Africa. According to the US Federal Maritime Commission (FMC), the “elimination of [port] congestion is today’s most critical and relevant trade-related issue.” Indeed, the FMC believes that port congestion “has become a serious risk factor to the relatively robust growth of the American economy.”
The effects of this infrastructure inefficiency are felt far beyond the port itself, impacting every link in the onward supply chain.
The agreement between DP World and Hyperloop One is to examine how Hyperloop technology could help move cargo quickly, safely and reliably from ships docked at Jebel Ali Port to a new container depot 29 kilometres inland. Given that the port is expected to handle 19.5 million TEUs (20-foot-long containers) in 2017, the potential for congestion is significant. The opportunity for driving revolutionary change in an industry that underpins global supply chains is also significant.
The disruptive effects of a Hyperloop port system go beyond making efficiencies; the vision is to entirely re-engineer ports themselves. If ships dock off the coastline to unload their cargo into subsea Hyperloop tubes, which are then immediately propelled to an inland port, the system may disintermediate the traditional port structure. Port owners and operators would have to create alternative uses and revenue streams for their existing infrastructure (in many cities this is would be valuable waterfront real estate) whilst inland ports on less valuable land could become high-margin intermodal logistics hubs.
The opportunity of risk
The 2016 Willis Towers Watson Transportation Risk Index found that the ‘threat from new competitors’ was a top rated risk across transportation sectors. Regardless of whether Hyperloop is a pipedream or the coming of the fourth industrial revolution to transportation, the industry clearly recognises the disruptive potential of emerging, nimble competitors who can utilise the second-mover advantage and harness new technology without legacy systems halting progress.
Yet with risk comes opportunity for those willing to see potential and embrace change. In the words of Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, “In the new world, it is not the big fish which eats the small fish; it’s the fast fish which eats the slow fish.”