Hyperloop’s Potential for Revolutionizing Freight
Hyperloop developers are promising to make freight transport faster. Do the economics work?
Hyperloop proponents believe that its mass adoption will revolutionize transport. The technology is capable of speeds as high as 633 mph, and recently Virgin Hyperloop tested a prototype that carried passengers for the first time. But the idea of having Hyperloops become standard passenger service—in a nation with a minimal existing market for intercity passenger rail—seems unlikely anytime soon.
There are major concerns regarding capacity and cost-effectiveness, while land acquisition will be as difficult as for conventional rail. But using Hyperloop for freight movement—already a robust U.S. industry—might be an easier starting point. Several companies are in fact looking to build the tech close to ports.
HyperPort is a cargo-centered technology being developed by Hyperloop Transportation Technologies (HyperloopTT). It would carry standard 45-foot shipping containers along Hyperloop lines that connect different cities. HyperloopTT partnered with port owners in Hamburg, Germany to conduct research about how such a system could be built within ports.
“The system can move 2,800 containers a day in an enclosed operating environment that eliminates at-grade crossings to increase reliability, efficiency and worker safety,” HyperloopTT claimed.
The company website also says it’s building test tracks and working with governments worldwide to roll out commercial routes. This includes in Abu Dhabi; Toulouse, France; and possibly throughout the U.S. Midwest. The company’s goal is to provide “airline speeds at freight costs.”
Other firms developing Hyperloops want to enter the freight market along with targeting passenger travel. Hardt Hyperloop, a Netherlands-based research and development firm, is pursuing a “Cargoloop” system. In an interview, company representative Rik Roesk told LogisticsMatter that it is exploring freight-compatible Hyperloops throughout the Netherlands, including from Amsterdam Schiphol Airport to the Port of Rotterdam. Edwin Wennik, the firm’s senior logistics specialist, added that Hyperloop could deliver more reliable travel times because it’s less susceptible than planes, trucks, and normal freight rail to weather. If the lines can manage to carve out dedicated right-of-way then it’s also just plain faster, which could have the effect of moving more volume.
“We are able to send more small volumes at the same cost as a full truck,” Wennik said, “which...gives you the opportunity to get more flow into your supply chain.”
Hardt has ambitious goals of linking Europe’s logistics market with Cargoloops by 2050. But first Hyperloop has to be proven as viable—and cost-effective—technology. HyperPort’s next step is to undergo design approval, although the details on its website are scarce (HyperloopTT did not respond to an interview request). A study of a passenger Hyperloop in Ohio projected a per-mile cost of $50-60 million; Virgin estimates $84-121 million per mile. Compare this to $1-2 million per mile for standard railroad track.
Given the high costs, some analysts are skeptical that Hyperloop passes the cost-benefit test. In particular, this is because cargo has less time sensitivity than passenger travel.
“People value their time, but cargo doesn’t,” argues Barry Prentice, a supply chain academic with the University of Manitoba. “People who ship cargo value cost much more than time.” Prentice is skeptical that freight needs on their own could justify the expense of building out this system.
But speed is increasingly important to the logistics industry. As I have previously written, railroads in China and Italy are beginning to increase speed for freight as e-commerce demands grow. Hardt’s Roeske expects that Hyperloop pods can carry two pallets, which are smaller than trucks.
“You have more, smaller pods being delivered in fast frequency,” with platooning providing equivalent capacity to trucks. Freight rail, by contrast, can move substantially more tonnage than trucks, though in theory Hyperloop can use speed to boost throughput.
But for smaller, more time-sensitive freight, successful Hyperloop technology could well prove competitive. America now suffers from port delays and road congestion, which increased by 9% nationwide in recent years, costing the trucking industry over $63 billion annually. Another stated benefit of HyperloopTT technology is that it consumes less space, which would free up land in crowded ports.
Hyperloop will not enter the market anytime soon, and the costs are significant. But its potential benefits to freight are at least worth reporting on. If corridors can be built along existing U.S. rights-of-way, namely elevated from automobile traffic, it could connect Hyperloops to their “HyperPorts” without much transaction cost. This would amount to a significant upgrade for this $12 trillion global industry.
This article featured additional reporting from Market Urbanism Report content staffer Ethan Finlan.