Last month, Virgin Hyperloop – backed by Dubai based DP World and UK based Virgin – laid off a large chunk of its workforce. The move was intended to make the shift from transporting passengers to moving cargo and direct the investments in that sphere. GlobalData acquired MEED, data and analytics company, confirmed that this strategic redirection aligns with Dubai’s wider transportation sector.
Virgin Hyperloop claims that the decision to shift from passenger to cargo transportation is an after-effect of the pandemic and its effect on the global supply chains. There’s also the fact that cargo transportation will make its operations more cost effective and agile. It will also bring down risk and regulations that come with passenger movement.
In April 2018, Dubai port operator DP World, which holds a 76% stake in Virgin Hyperloop, launched DP World Cargospeed. It was claimed to move at top speeds of 1,000 kilometres an hour to transport high-priority, time-sensitive goods, including fresh food, medical supplies and electronics. The firm is also backed by the UK’s Virgin Group, whose founder, Richard Branson, said that the system would capitalize on the opportunity presented by a growing preference for e-commerce and on-demand deliveries.
During recent years, the global supply chains have been stretched to lengths, first with the rise of e-commerce and then with the chaos caused by the pandemic. The shipping industry has been struggling with congestion at ports and the shortage of containers. The hyperloop technology, in such a scenario, is poised to be a solution welcomed by all as a new, faster and more sustainable method of freight movement.
The development of a cargo hyperloop network at Jebel Ali could pave the way for DP World to speed up output at what is already the busiest port in the Middle East, as well as maximise the port’s land area.”Neha Bhatia, Construction and Infrastructure Editor at GlobalData’s MEED
With hyperloop, transport can take hours versus days. We have the opportunity to expand the capacity for high-priority, on-demand goods typically served by air — fresh food, medical supplies, electronics, and more. We could also expand freight transportation capacity, connecting with existing modes of road, rail, ports, and air transport.
“The move away from passenger hyperloop, even for the short term, aligns more closely with Dubai’s wider transport sector. Tried and tested cargo hyperloop systems will lend much-needed credibility for the new technology to take off as a public transit option, when it is ready for commercialization in the city and beyond.” adds Neha.
Proponents of hyperloop technology will hope the investment re-prioritization will spur, along the development of functional cargo pods and routes in the near future. For Dubai, the strategy will lead to a positive net result.