In the second in our series looking at the challenges and benefits of the digitization of transport we are going to delve into the area of digitized transport services production and all that entails.
The Challenges and the Needs
Digitization is cutting across all layers of society. We have an expectation that virtually every action we take, now has a digital approach and transport and logistics has not escaped this. Digitizing transport services, if done well, can improve the efficiency, create better experiences for customers and ultimately increase profitability of an integrated transport infrastructure.
The transportation industry, like many others, is under pressure to improve cost efficiency. A report by transport and logistics analysts, Oliver Wyman, found that in a ten-year study, the companies’ involved showed increased revenue, yet reduced profits. Oliver Wyman suggesting that to improve the situation logistics and transport companies should focus on, “standardizing and streamlining structures and processes, developing industry oriented and innovative solutions, thinking and acting in terms of networks”
And digitization is also being driven by consumer needs. Consumers are pushing the boundaries using ‘collaborative consumption’ to envision new models of transport, including app initiated car sharing and personal car rental.
An Example of the Power of Digitization: Traffic Management
In a report by Deloitte Research, Digital-Age Transportation: The Future of Urban Mobility’, they spoke of American commuters spending 34 hours per year delayed in traffic. Europe can be even worse, with Paris having the worst traffic jams in Europe, unfortunate drivers loosing up to 70 hours a year, stuck in traffic. A German Automobile Club study found that the impact on a country’s economy of traffic jams and the related fuel consumed and lost time could be up to 200 billion Euros.
This situation is not good for anyone, from drivers, to the road system, to councils. The issue arises when transport planners try to rectify these issues by adding new infrastructure; without intelligent application, this can prove slow and costly.
One of the emerging ways of managing traffic is through the use of drones. The U.S. Government is currently piloting a drone-based traffic monitoring system. In Europe there has been a number of research projects looking into the use of drones for traffic management. Some examples being the Czech Republic, Spain and France. Drones offer real time data of traffic issues and allow planners to build patterns of traffic use and spot areas and times, prone to traffic problems. They give a more accurate way of measuring and predicting traffic patterns. Big data obtained in real-time, from real events, can help to build a smarter approach to traffic planning and can inform smart infrastructure improvements. This can mean changes such as encouraging flexible working and creating ‘park and ride’ areas for busy town locations. The Netherlands has used this type of approach to manage their increasing traffic and cut traffic jams by 20%.
The Importance of Trains
The use of trains as a way of managing traffic should not be overlooked. Digitization does not stop at roads. The automation of train management is crucial to the optimization of the use of trains, which ultimately impacts on the optimization of other modes of transport. Examples of how to improve train traffic have been identified by planning and prediction initiatives such as ‘Project Darwin’, which looks at how to link real time train running information, to web sites and social media platforms. This information can then be used to predict journey times and allow passengers to plan journeys.
An Example in Action: La Poste Courrier
La Poste delivered around 15 billion parcels and letters in 2012 and is France’s foremost postal service. To say they have complex logistics is an understatement. To improve productivity and increase profits, La Poste Courrier have digitized their processes across 50 applications. By digitizing their services and logistics, La Poste Courrier has been able to expand its product offering and improve their overall responsiveness by simplifying operations. One of the key areas that a business like la Poste has to engage in is customer engagement and commitment. Being able to optimize logistics and transport has ensured that delivery schedules are maintained and customers see the best service – giving La Poste the competitive edge in an increasingly competitive market space.
One of the challenges of digitizing La Poste and other similar transport and logistic organizations is supporting existing infrastructures. Drawing on the use of modern Internet programming languages like PHP and .net as well as supporting enterprise architecture languages like Java, are essential to the success of digitization of transport. In addition, understanding the needs of the various integrated departments within any given industry can only help to optimize the digitization processes.
In a Franhofer Institute study into the future of road and train transportation and logistics, they determined that three main changes needed to be put in place to effect positive and efficient improvements, these were, digitization, flexible management and use of technology. They state that, “…transportation sector, too, increasing interconnectedness and digitization offers new opportunities and solutions to tackle growing traffic flows.“
I believe we can safely say the future of transport and logistics is digital.