Starship Cargo: How SpaceX’s IPO will launch a million tonne supply chain

The rise of SpaceX has been a phenomenon. Its recent IPO has made Elon Musk’s company the fifth most valuable in the world, as investors bet on its future growth opportunities. Whilst the technology involved may be ‘space age’, its goal of creating enormous solar-powered datacentres in orbit around the Earth will only be achieved with the help of more traditional industries. The logistics sector will be at the forefront of these efforts and those 3PLs with the requisite skills, expertise, infrastructure and resources could be set to reap the rewards of Musk’s venture.

The theory behind the business concept is flawless. Traditional datacentres require huge amounts of electricity to function, need cooling and are often unpopular with local populations. Putting them in space gives them access to unlimited solar energy, solves the cooling issue (space is near negative 270 degrees Celsius) and there are no residents to object to planning. Whilst some academics have raised technical objections, the financial community has bought in to Musk’s vision. If the investors are right and critics wrong, then a vast amount of high tech equipment will need to moved to space ports in exceptionally controlled environments. This could deliver high margins and high revenues to those logistics companies able to work at these specifications.

Firstly, there is the sheer volume of physical equipment which will need to be moved to SpaceX’s space ports in Florida, California and Texas (‘Starbase’). There has also been talk of using space ports in other parts of the world such as the UK and Australia. SpaceX’s AI1 Satellite will comprise a 70 metre deployable solar array to generate 150 kW of power. It will also require a 110 square metre liquid-radiator system. Of course, there is also the compute capacity which has been described as a ‘giant computing node’. In total, according to SpaceX’s official IPO prospectus, the weight of the equipment needed to be moved to space will be around 1 million tonnes and will require thousands of launches a year.

Secondly, there is the logistics required to support the production of the chips, cooling systems and solar arrays on earth. SpaceX has announced the construction of a new factory in Texas – ‘Terafab’ - which will manufacture wafers, cells and the satellites themselves. It hopes to have the huge facility ready by 2027 which will involve a huge effort in terms of the build and fitting out, logistics intensive activities which will require the deployment of transport and warehousing assets along with sophisticated technology and management. The growth of AI and datacentre sector is already supporting demand for air cargo, especially from markets such as Taiwan. The investment in Texas will result in continued demand for international freight services but will also drive the local and domestic US road freight, distribution and express sectors.

Thirdly, there are the specialist conditions in which the equipment must be moved and stored. Components will be manufactured, assembled, stored and moved under ‘cleanroom’ conditions which will include a low-humidity environment, controlled particulate contamination and strict temperature ranges. Whilst a large proportion of components and equipment will be manufactured within the Terafab site to prevent vibration and contamination risks, the movement of goods to the space ports will require specialist transport containers and axle dampening systems. Whilst no doubt much of this market will remain ‘in-house’, the size of the task will inevitably mean that SpaceX’s management will be looking to high quality logistics partners to support the vast effort.

To many, Musk’s plans to put datacentres in space may seem like science fiction although the $86 billion raised by the IPO would suggest otherwise. At the very least, whether the ultimate vision is realised or not, the US domestic and international express and logistics industry will benefit from the investment in the vast Terafab facility. The benefits of capital raised by SpaceX’s IPO will ripple throughout the world creating opportunities at the intersection of the financial, technological and physical worlds.