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A start-up is planning an underground network of tunnels in the UK to deliver more than 600 million packages a year

CNBC logo CNBC 11/14/2019 Lucy Handley
a truck is parked on the side of a road: Magway's proposed pipe network would run alongside freeways, transporting goods underground © Provided by CNBC LLC Magway's proposed pipe network would run alongside freeways, transporting goods underground

The days of staying at home waiting for a delivery could be numbered with plans afoot for a subterranean network of tunnels in the U.K. that could transport as many as 600 million parcels a year to London alone.

British start-up Magway is planning an alternative to traditional above-ground truck deliveries and wants to build narrow tunnels and tracks that could run underground next to freeways and under cities in the U.K., carrying parcels and groceries.

Magway hopes to build a series of pipes, less than 1 meter wide, that could transport items in pods that would travel along a track powered by a magnetic motor, connecting distribution centers to retail outlets and consumers. Its small tunnels are similar in design to the underground pipes already used by water, gas and electricity companies, and Magway co-founder and Commercial Director Phill Davies said it could also redeploy existing pipes, in a phone interview with CNBC.

The first planned route would run from Hatfield, north of London, to Park Royal, a suburb in west London, a distance of about 20 miles (32 kilometers) that takes around 45 minutes to drive in light traffic. This compares to about 40 minutes for a parcel traveling via Magway over the same distance, with 31 miles per hour the optimum speed for the system and less than half a second between freight pods.

Freight pods and track designed by Magway, part of a proposed underground network of delivery tunnels in the UK. © Provided by CNBC LLC Freight pods and track designed by Magway, part of a proposed underground network of delivery tunnels in the UK.

Davies said the initial Hatfield-Park Royal route could be operational in about three years' time. An extended route, running about 50 miles from Milton Keynes to London, would have the capacity to transport more than 600 million parcels a year, Magway said in an online release.

The development comes as the shipping and transport industries are in flux, with companies jostling to speed up delivery times and create more sustainable ways to get around. Air pollution is expected to cause 2.4 million new cases of illness in England by 2035 according to the country's Department for Environment Food and Rural Affairs, while traffic jams cost the U.K. $10.3 billion in 2018, per data from analyst Inrix. In the U.S. the figure reached $87 billion. Amazon is building its own fleet of trucks and UPS is exploring new ways to deliver goods such as drones and self-driving trucks in the U.S.

Amazon also filed a patent for "Dedicated network delivery systems" that may include "subterranean or aboveground elements" in November 2016, with the filing showing images of packages being transported underground. London had an underground "mail rail" system that was built in 1927, with a capacity of more than 4 million letters a day. It was closed in 2003.

Magway is based on linear synchronous magnetic motors, similar to the technology used in roller coasters, and was co-founded by Rupert Cruise, an engineer who has designed linear motor systems for Hyperloop and U.S. Navy aircraft carriers.

The company has raised £1.5 million ($1.9 million) since being founded in 2017, a sum it spent on two demonstration projects, and Davies described the technology as "ready to go." It hopes to raise a further £750,000 to expand its team and file new patents and chose crowdfunding to appeal to consumers who want delivery options that are better for the environment and their health, it said in a statement.

a close up of a light: Magway uses magnetic motors to transport goods along underground tracks. © Provided by CNBC LLC Magway uses magnetic motors to transport goods along underground tracks.

Crowdfunding is also used as a way to show governments and other funders that a project has initial public support, as well as to get media attention and traction on social media. Magway expects future project costs to be privately financed but said this could be supplemented by government grants.

It is in discussions with Heathrow Airport and others over how its technology could be used to deliver duty-free goods to retail outlets, or to move baggage around terminals, and wants an airport to provide funding for a commercial pilot. Online supermarket Ocado is a partner, along with Old Oak & Park Royal Development Corporation.

The overall project costs will be much higher than the sums Magway has initially raised. The company estimates that tunnels, rails and freight pods will cost £1.5 million per kilometer (about £2.4 million per mile), plus a further £3.5 million per kilometer for planning, installation and legal costs.

An 850-kilometer (528-mile) network of pipes in London would cost between £5 billion and £7 billion and could be completed in 20 to 25 years, Davies added. This could enable more than 90% of the city's population to have access to distribution centers within a 15-minute walk or cycle from their homes, he said.

Other U.K. infrastructure projects have seen delays and exceeded estimates. London's flagship Crossrail passenger transit project that will connect Heathrow Airport to the Canary Wharf financial district is over budget and behind schedule, while a high-speed rail link that is planned to run between London and northern England is set to cost about £20 billion more than expected. But Magway said its scheme is on a much smaller scale than these projects so presents lower financial risks.

Compared to other innovative transport technology such as Hyperloop, the costs are "achievable," partly because the transit pods can sit close together and don't need to travel at high speeds, Davies said. "For the cost of (U.K. Prime Minister Boris Johnson's) £15 billion bridge between Scotland and Ireland, we could connect most of the U.K," Davies said, referring to Johnson's purported plan for a link bridge that was criticized by some engineers.

Cruise said the technology would help to tackle congestion and emissions. "Not enough is being done to address the future of our transport infrastructure and, more importantly, how to tackle the problem of dangerous levels of air pollution. We need big ideas that will change the way we currently deliver goods and the face of transport for years to come," he stated in an emailed release.

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