Union Pacific plans to invest $1B in Nebraska
Most of the talks surrounding the United States supply chain these days centers on coastal ports. Union Pacific, owners of the largest railroad network in the country, has ideas to grow U.S. logistics from the inside-out.
UP has announced its intentions to invest $1 billion in Nebraska over the next several years as part of an aggressive capital investment program.
Smack-dab in the middle of the United States, lies the state of Nebraska, which will undergo $70 million in capacity expansions at its North Platte rail yard, $220 million in new rail infrastructure and an additional $206 million in miscellaneous fees, including a bridge over the Elkhorn River.
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According to an economic model by the U.S. Department of Commerce, every dollar invested in freight railroads leads to $3 in economic output, while every job in rail operations leads to about 4.5 jobs. Those figures could have spurred Union Pacific to announce its investment intentions in Nebraska.
“We're proud that Union Pacific has been part of Nebraska for 150 years,” Union Pacific CEO Jim Young. “[This] announcement of our $1 billion infrastructure investment...renews our commitment to helping stimulate business and job growth in [the state].”
The move makes sense for the freight rail company. Roughly 8,000 of the company’s 45,000 employees are based in Nebraska. Those 8,000 employees earn almost $1 billion annually, injecting massive amounts of money into Nebraska’s economy.
Union Pacific’s 1,068 miles of track in Nebraska form some of the primary arteries that connect West Coast ports in Los Angeles and Oakland with rail hubs in Chicago and Dallas.
Elon Musk's Boring Co. planning wider tunnels for freight
Elon Musk’s drilling outfit The Boring Company could be shifting its focus towards subterranean freight and logistics solutions, according to reports.
A Boring Co. pitch deck seen and shared by Bloomberg depicts plans to construct wider tunnels designed to accommodate shipping containers.
Founded by Tesla CEO Musk in 2016, the company initially stated its mission was to offer safer, faster point-to-point transport for people, particularly in cities plagued by traffic congestion. It also planned longer tunnels to ferry passengers between popular destinations across the US.
The Boring Co. completed its first commercial project earlier this year in April. The 1.7m tunnel system is designed to move professionals between convention centres in Las Vegas using Tesla EVs. It says the Las Vegas Convention Centre Loop can cut travel time between venues from 45 minutes to just two.
Boring Co.'s new freight tunnels
The Boring Co.'s new tunnel designs would allow freight to be transported on purpose built platforms, labelled as “battery-powered freight carriers”. The document shows that, though the containers could technically fit within its current 12-foot tunnels, wider tunnels would be more efficient. Designs for a new tunnel, 21 feet in diameter, show that they can comfortably accommodate two containers side-by-side, with a one-foot gap between them.
The Boring Co.’s new drilling machine, dubbed Prufrock, can tunnel at a rate of one mile per week, which is six times faster than its previous machine, and is designed to ‘porpoise’ - mimicking the marine animal by ‘diving’ below ground and reemerging once the tunnel is complete.
Tesla’s supply chain woes
Tesla is facing its own supply chain and logistic issues. The EV manufacturer has raised the price of its vehicles, with CEO Musk confirming the incremental hike was a result of “major supply chain pressure”. Musk replied to a disgruntled Twitter user, confused as to why prices were rising while features were being removed from the cars, saying the “raw materials especially” were a big issue.
Car manufacturing continues to be one of the industries hit hardest by a global shortage in semiconductor chips. While China’s chip manufacturing levels hit an all-time high in May, and the US is proposing a 25% tax credit for chip manufacturers, demand still outstrips supply. Automakers including Volkswagen and Audi have again said they expect reduced vehicle output in the next quarter due to a lack of semiconductors, with more factory downtime likely.
Top Image credit: The Boring Company / @boringcompany