Is Hyperloop the next supply chain revolution?

Could Hyperloop transform the supply chain?

Hyperloop has taken its first step towards transforming the supply chain after it successfully carried passengers for the first time.

DP World and Virgin Hyperloop One announced the historic milestone on 9 November 2020 when Hyperloop, the proposed high-speed mode of transportation, carried passengers for the first time, but it is an innovation that could also have broad implications for cargo and the supply chain.

Being able to travel at speeds of 700mph mean hyperloop could transform how goods are moved, and potentially help connect inland regions to ports sea lanes.

Speaking to PTI, supply chain expert Wolfgang Lehmacher said the effects could be substantial and almost entirely replace long-used parts of the supply chain and bring ports closer to industrial areas.

“Hyperloop as a mode of freight transportation can on the one hand better connect the ports with their hinterland and on the other hand connect commercial and industrial centres along the new silk road,” Lehmacher said.

“While the latter replaces long distance ocean and air freight transportation, I expect the main impact to be on the links between the ports and the centres in their hinterland.”

The port-to-hinterland transport mode that could be usurped is rail and Lehmacher believes Hyperloop could be used to improve connections between major cities all over the world, such as Hamburg and Munich, Los Angeles and Chicago and Shanghai and key Chinese industrial centres.

One such project from Virgin Hyperloop One plans to connect the major Indian industrial centre of Pune to Mumbai in under 30 minutes.

Tests are currently focused on transporting passengers, with other projects proposing to connect city centres to airports.

However, if successful the technology could be broadened out to cargo and this may become even more vital in the future as the burden on the supply chain from Ecommerce increases and trade recovers post-COVID-19.

In an interview with Port Technology in 2019, Virgin Hyperloop’s Head of Marketing and Communications Ryan Kelly said the world “was not poised to meet the demand of the coming decades” and that the rapid increase of e-commerce would strain the supply chain.

Pre-pandemic predictions suggested e-commerce would be worth $4 trillion to the global economy by 2020. Statista predicted in August 2021 that Ecommerce will be worth $6.54 trillion by 2023.

This means the supply chain needs new ways to transfer goods quickly and, critically, in an environmentally friendly way.

Kelly claimed Hyperloop can serve as an “integrated logistics backbone, supporting the fast, sustainable and efficient delivery of palletised cargo”.

If these predictions are accurate the way goods are transported inland will change drastically, with an emphasis on palletised cargo, as opposed to containers.

The region which could be the first to see the benefit is the Middle East and Gulf. Saudi Arabia is leading the world with a first-of-its-kind national hyperloop study to evaluate how a hyperloop carrying both passenger and cargo.

The study, commissioned by Saudi Minister of Transport Saleh bin Nasser Al-Jasser, will look to lay the groundwork for a network of hyperloop routes to be considered ‎across Saudi Arabia.

According to Lehmacher, the advantages of Hyperloop are “plentiful” and range from “economics to reliability, to the reduction of operationally caused carbon emissions”.

“Just imagine a container leaving the port every few seconds, the importance of speed increases with the distance travelled,” he said.

“Governments, infrastructure developers, supply chain providers, transportation, train and terminal operators should look into this promising alternative mode of transport.”

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