DP World and Hyperloop One to test concept at Jebel Ali port. Will the hyperloop system become a game-changer for ports around the world?
Jebel Ali, in Dubai, is one of the busiest and most productive ports in the world, and the flagship facility of DP World, a global port operator and logistics company. With a current capacity of 18 million TEU, DP World expects to reach 19.5 million TEU next year as the company spends billions of dollars to continue expanding at Jebel Ali and elsewhere. One area of DP World’s investments will be on a technology called Hyperloop. In an agreement signed recently between DP World and Hyperloop One, a U.S.-based concern that is commercializing the technology, the two companies began a collaboration to explore how Hyperloop could move cargo quickly and reliably from ships docked at the Jebel Ali port to a new container depot 18 miles inland.
Hyperloop uses vacuum tubes to push capsules containing cargo or passengers between locations at speeds exceeding 550 miles per hour. The application of Hyperloop technology was given a boost by the backing of Elon Musk, an entrepreneur originally from South Africa, who also has been behind companies like PayPal, SpaceX, and Tesla.
Hyperloop One, the first company to attempt to bring the technology to the marketplace, recently set up its first production facility in North Las Vegas, Nevada, where it will be building a Hyperloop prototype for trial runs early next year. Hyperloop One’s deal with DP World is its fifth feasibility study to date and its first in the Persian Gulf region. Other Hyperloop studies are underway in Finland and Sweden, Russia, Switzerland, and the United States. (See sidebar on page 11) The U.S. project is also a cargo study that will use the technology to offload containers at the ports of Los Angeles and Long Beach.
The Jebel Ali case envisions a dedicated Hyperloop tube with pods cycling through the tubes several times a minute with cargo containers transiting to and from Jebel Ali and the inland port. Such an operation could help free up valuable space at the port docks and relieve Dubai’s roads of congestion. It could also create the conditions for the development of the inland port, a location which could emerge, not only as a transportation and distribution hub, but also an industrial center, as has happened elsewhere.
“The feasibility study will investigate the business case, route options and costs to build and operate the system,” said Shervin Pishevar, chairman of Hyperloop One. “A Hyperloop tube could tunnel underground or fit within existing rights of way, minimizing the impact on the dense metropolis.”
An even bolder solution could include Hyperloop tubes submerged under water to connect Jebel Ali’s new island Terminal 4 to onshore destinations. “The initial study will focus on efficient handling of containers, costs, benefits, demand, and volume patterns of moving cargo using the new technology,” added Pishevar.
Since Hyperloop is all-electric and emissions-free, a Hyperloop cargo offloader would also eliminate carbon emissions that trucks spew in port zones when picking up and delivering containers at maritime terminals and transporting them to and from distribution centers, Pishevar also noted.
Inland container ports are increasingly emerging as essential components of global logistics. In Europe, inland waterways are often used to ferry containers from ocean ports to inland areas for further processing. In the United States, Chicago and Kansas City were two of the original inland ports, where rail connections made them magnets for processing and distributing massive volumes of cargo from coastal ports to the hinterland.
More recently, U.S. ports have teamed up with intermodal operators to rail cargo to inland, but relatively nearby, terminals, in order to promote the efficiency of port assets and reduce congestion and pollution in port zones. Those are the general ideas also behind a Hyplerloop-supported inland port in Dubai.
Inland ports are developed where land is available cheap, reducing the costs of cargo operations concentrated in the port area and promoting efficiency. Shippers like them because they get quicker access to their goods and can locate their operations nearby, in a lower-cost location.
That’s how and why inland ports often grow into diverse logistics and manufacturing hubs, some operated by DP World in Europe along the Rhine, Meuse, and Neckar rivers and on the Albert Canal near Antwerp in Belgium. In the U.S., the Virginia Inland Port, located 200 miles from Norfolk, has attracted 39 major companies, more than $750 million in investment, and 8.5 million square feet of storage space. Southern California’s Inland Empire is another example of such a hub. Ports in South Carolina and Georgia operate, and in some cases, are expanding, their networks of inland ports.
Inland ports can also help solve the trickier logistics that shippers face in developing economies. DP World supports some 30% of India’s container trade from five coastal ports. To distribute the cargo to the hinterland, the company sought a special license from the Indian government to operate trains over state rails.
Hyperloop One believes it can unlock the benefits of inland ports while offering greater reliability, capacity, and speed than rail. “We believe we can increase the volume of freight DP World moves through the port, which supports more revenue and profit for all stakeholders,” said Rob Lloyd, CEO of Hyperloop One.
One of the perennial challenges of global trade is that its biggest players have to foresee long-term shifts in commerce flows and invest massively far in advance to meet worldwide demand. In DP World’s case, that means looking for efficiencies and innovative technologies that can provide an edge across its 77 maritime and inland terminals on six continents.
“By testing the Hyperloop technology at Jebel Ali for cargo use, we’re taking a first step in exploring new ways of enabling trade,” said Sultan Ahmed Bin Sulayem, DP World Group Chairman and CEO. “The potential to use these kind of technologies in emerging markets outside the UAE such as Africa and Asia is significant.”