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Speculation about Elon Musk’s Hyperloop project is on the rise after a test last month.

For those that don’t know, the Hyperloop is a traffic-defying train that runs through a highly pressurized tube and can take passengers up to 700 miles in one hour. Most of the stories about Musk’s new project focus either on the fact that the idea for a high-pressure tube-train dates back as far as the 18th century or on issues of its practicality. What gets overlooked, is the potential for Musk’s Hyperloop concept to take usher in a new era of freight rail sophistication.

 

In a recent report, Aberdeen found that the top two business pressures facing Best-in-Class companies are the increasing customer demand for faster, more frequent deliveries and the volatility of freight costs. Air travel is the current solution for speedy delivery, but it is associated with high fuel costs. The Hyperloop could improve delivery speed while eliminating such cost concerns.

Choosing road over air freight or diesel over gas may reduce fuel costs, but now customers are wondering why they’re waiting longer for a product. And these decisions become even more critical as companies like Amazon continue to raise customer expectations for both the cost and speed of deliveries. Plans detailing how the Hyperloop will be powered have yet to come out, but Musk claims the energy used will only be a micro-segment of the energy currently used for road, air, or rail.

On top of being the most fuel-efficient freight model, the Hyperloop also promises record-obliterating speed.  The estimated time it takes from Hyperloop to get from New York to Los Angeles is about 4 hours and 28 minutes. (compared to air at 8:53, rail at 23:47, and road at 47:30). Of course, fuel isn’t the only cost to be considered. It is estimated that Hyperloop would cost billions of dollars. Thankfully, large-scale infrastructure projects are public commodities (on the tab of the US government). If Musk can equate this enormous undertaking to the transcontinental railroad or US/state highways, the Hyperloop will not be exclusive to those able to pay for a cut of it.

Suppliers can only cross their fingers that Musk can keep his promises of faster rail transportation. However, the hype surrounding Hyperloop reminds us to reconsider the future of freight rail altogether. High-speed trains (HST) carrying passengers already exist, and Asian and European governments have invested in HST’s economically- and environmentally-promising future.

Read the full report to learn more about how Best-in-Class companies combat volatile freight costs and cope with the demand for faster delivery speeds.

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