Insight | Research Programme 2017: The future of transport


Research Programme 2017: The future of transport


At the turn of the 20th century people had high hopes for the transport of tomorrow.

While all forms of transport have seen improvements, change has been evolutionary, rather than revolutionary. However, at a time when fast-rising travel demands, fuelled by population increases, urbanisation and globalisation, could see CO2 emissions from transport increase by 60 per cent by 2050, the transport industry needs to become radically more efficient if it is to be a sustainable part of the global economy.

A revolution in the transportation sector is fast approaching, with new technologies rapidly transforming private consumer travel, public transport networks, and the supply chains on which companies rely to transport their goods.

The technological changes at the heart of this are IoT, machine learning, and artificial intelligence (AI) – which together have already begun to make autonomous vehicles viable. While in the immediate short term there are significant regulatory hurdles to be overcome, automation has the potential to reshape both how people go about their day-to-day lives and how companies transport goods across long distances. Once the number of autonomous vehicles on the road reaches a certain tipping point, private car ownership will become redundant as it will not make economic sense to own a vehicle which sits unused for most of the time. Instead, fleets of for-hire autonomous vehicles will become increasingly popular.

Meanwhile, mass transit is already being significantly improved by the introduction of smart sensors in concert with big data and predictive analytics. For example, Siemens AG has developed an ‘Internet of Trains’ project in Russia to improve reliability of service. Smart sensors monitor a wide array of data points, from rail vibration to engine temperatures, enabling them to anticipate equipment breakdowns and fix them before they become an issue in an act of predictive maintenance. This data is also used to help ensure that the network is adaptable to transport requirements – transporting passengers and cargo in the most efficient way possible.

Given that 65 per cent of transport respondents in our survey are already in the process of deploying smart sensor-based applications to monitor energy consumption, it is easy to picture a ubiquitously measured and sustainable transport system for both consumers and companies in the future. The pace of this change will of course be quicker in certain markets, but driven by its global nature, the transport industry will begin to standardise the way goods and people are moved, supported in turn by increases in global connectivity.

Collecting information on where energy is being wasted in the system by, for example, monitoring when vehicles are either in energy inefficient static or stop-and-start states, will enable organisations to optimise the system for energy efficiency – decreasing the environmental impact of modern transport. Smart sensor systems that can not only gather important data from vehicles but that can also accurately locate these assets will provide a more refined data set, enabling more operational efficiencies.

As the world becomes more serious about addressing its carbon footprint, domestic and international law will begin to ratify the collection of vehicular data as a compulsory step to combat emissions and improve public health and safety, just as legislation banning leaded petrol was enforced in the past.”

Mike Holdsworth, Director, Transport

Moreover, over half of those we interviewed intend to implement smart monitoring of their assets within the next year, illustrating that transport of the future will utilise technology to ensure that assets are only being deployed where they are required. It is therefore unsurprising that almost two thirds of transport respondents expect to achieve sustainability improvements through IoT deployments in the future.

These technological changes will not solely have exciting effects on how people move.

Smart sensors and analytics can also transform how organisations move their goods in the supply chain. This is clearly in the sights of many transport companies as a proximate objective for those deploying IoT, with 65 per cent expecting to gain greater supply chain insight in the future from their supply chain deployments. Automation is already set to revolutionise the logistics industry with automated trucks that never need to stop for rest and that are safer and more efficient than human drivers – a potentially unsettling prospect, when you consider how many jobs will be eliminated in the process. Nevertheless, there are huge gains to be made from technological advances for organisations that transport goods around the world.

The modern supply chain is a fiendishly intricate beast, criss-crossing continents in a complex web. It is therefore exposed to risk at numerous levels and from many angles.

Smart sensors can help to mitigate this risk on both a macro and micro level – for example, monitoring where adverse weather conditions could affect an individual shipping route and adjusting scheduling and availability of land routes accordingly. Supply chains always have to work with limited capacity at each stage of a journey, and IoT technology melded with predictive analytics will enable them to gain an unprecedented level of visibility over their operations.

For a vision of the supply chain of the future, consider China’s One Belt, One Road initiative, which will encompass around 60 countries in a Eurasian infrastructure network. Fuelled by the growing Asian economies, this gargantuan trade network will require responsive and adaptable supply chains to function well – and here technology will play a key role, making it possible to navigate the project’s complex logistical and operational challenges effectively over never-before-seen distances.

Digital exhaust - the untapped potential of data

The McKinsey Global Institute estimates that IoT could generate up to $11 trillion a year in economic value by 2025, but unlocking this value will be contingent on businesses’ ability to fully leverage the data that connected things will generate. It is here that the true value of IoT lies, yet currently, most of that data is left unused or underused.

The transport sector stands to be one of the primary beneficiaries from the windfall of data coming its way from the Internet of Things.

Digital exhaust, the data generated by people’s online actions, can be an important source of crowd-sourced intelligence for transport companies, and as rollout of Wi-Fi on planes, trains and other public places continues, evermore data sets will become available. Furthermore, sensor-derived data, generated by sensors placed on cargo, vehicles, employees and places, has the potential to fuel a revolution in the sector.

The shoots of this revolution are already beginning to show. This data is spawning a host of new business types and models. Courier company Gophr has been using sensors on its bicycle couriers as they speed around London creating a real-time picture of air pollution in the city, while apps like AppyParking collect data from sensors in parking bays to help drivers find parking spaces. Other initiatives are more ambitious in their scope. Daimler, for example, is positioning itself as a gateway to mobility services with its moovel app which uses data to enable passengers to move seamlessly between different mobility services, from car shares and taxis to bike rentals and public transportation.

But while many in the industry have been deft at leveraging passenger data to dynamically manage routing, calculate fuel requirements and find efficiencies, respondents have not yet mastered their approach to the data generated by connected things. An aeroplane engine might be equipped with as many as 250 sensors, yet this data will commonly be used primarily to spot anomalies, rather than for optimisation purposes – which is where the most value sits.


of transport respondents believe that IoT will revolutionise their industry

Encouragingly, respondents broadly recognise that the data generated by the IoT could make them leaner, faster, and more efficient, but there are a number of barriers that will need to be overcome before these benefits are realised. One of the most important of these barriers is related to the sharing of data. Organisations’ abilities to extract maximum value from data is predicated on employees from different departments having access to it, though in over half of cases, this access is restricted to departments directly related to the IoT deployment. This is a missed opportunity and suggests that respondents may be limiting the scope of their transformations.

A lack of available talent threatens to be a further issue and our research indicates that a skills shortage is already starting to bite.

Transport Systems Catapult, and the UK’s technology and innovation centre Intelligent Mobility, estimates that as many as 3,000 data specialists will be needed in the UK alone to support the transport industry’s drive to exploit data. Indeed, four in ten respondents in this research stated that they required additional analytical/data science skills to successfully deliver IoT, indicating that this is an area that requires attention.

Connectivity is similarly critically important for any adoptee of IoT solutions wishing to engage in data analytics. Data-driven decision making relies upon organisations’ ability to collect and analyse all data sets at their disposal to decide on the best course of action, making 100% reliability critical. When tracking moving assets, such as vehicles, location accuracy can be particularly important. Car insurance companies, for example, determine their premiums based on drivers’ habits – including how they drive in different traffic intensities – but would struggle to do so accurately without full and real-time access to this data. But while the importance of reliability has not escaped our respondents, doubts exist about how possible it is to achieve, with almost three in ten (28 per cent) stating that connectivity issues could derail their IoT deployments, making accurate data collection a challenge.

Collaboration key to driving IOT success

Across the globe we are quickly growing in number, are richer than we have ever been, more interdependent and global, and more urban. The net results being rocketing demand for mobility in the movement of passengers and goods, more vehicles in our skies and on our roads, and, ultimately, more damaging CO2 emissions.

Indeed, the International Transport Forum conservatively estimates that heightening travel demands could see global CO2 emissions from transport increase by 60 per cent by 2050, a figure that is based on the assumption of significant progress with the adoption of greener technologies. Without such progress, that figure is expected to be considerably higher.

The transport industry needs to get smarter if the sector is to successfully accommodate these changes and limit its impact on the environment.

After decades of incremental progress, radically new approaches and solutions are needed. While IoT alone will not enable the sector to clean up its act, the respondents in this research recognise its potential to transform their operations, bringing with it a raft of economic, social and environmental benefits. Connected road signs and traffic lights, for example, can help to better manage the flow of traffic in our cities and motorways by flexing speed restrictions in line with localised requirements. Remote diagnostics and predictive maintenance on vehicles, meanwhile can keep downtime to a minimum and make safety improvements.

However, despite these intentions and hoped-for benefits, deployments to date have, in many cases, not been as smooth or straightforward as they might have been. Just one in five (19 per cent) adoptees state that they didn’t face any major issues when they rolled out their IoT deployments, and while some respondents have reported some early successes in achieving the benefits from their IoT projects that they had initially anticipated, that success rate is far from universal.

While these benefits may yet be realised, the data suggests that a greater reliance on partners may help speed up the return on investment for IoT-based initiatives, as, at present, there is a greater-than-average tendency in the transport sector to go it alone. Over a quarter (26 per cent) stated that they were not actively looking to work with partners to support their IoT deployments, whereas this was only the case for 16 per cent of the entire research base. Moreover, where partners are used, they are much more likely to be brought in to help with the initial development and deployment of IoT solutions than with their on-going management.

IoT is complicated business and for one company to master the whole IoT value chain is a tall order.

IoT deployments will typically depend on the experience, technical capabilities and support from a whole ecosystem of partners to be successful. Moreover, organisations that attempt to develop their IoT capabilities on their own steam will be putting an unnecessary brake on innovation. Deriving value from IoT initiatives rests on their ability to scale, which in turn rests upon organisations’ access to the correct staff. However, as competition in the labour market for individuals with sought-after IoT, data security and data analytics skills hots up, this access will prove increasingly difficult. With economies of scale on their side, specialist partners can help businesses overcome these bottlenecks and make their IoT deployments successful.

Full steam ahead for digital transformation

Transport is the backbone of the global economy, and the transportation sector is so intertwined with every aspect of developed and emerging markets that their fortunes are linked.

Economic prosperity depends on transport’s ability to get people and objects from A to B efficiently and investments in transport are sound ones. Indeed, the World Economic Forum estimates that every dollar spent on capital projects like transport generates an economic return of between 5 and 25 per cent.

Conversely, we pay a high price in terms of time, cost, and our health for dysfunctional transport systems. While the industry has, by and large, been able to keep the wheels spinning to date, social, demographic and environmental changes are making that more difficult. The transport sector is at a crossroads as it grapples with how to best respond to the key megatrends of today – climate change, urbanisation, and globalisation – each of which create new and unique challenges. But they also present opportunities for those organisations that can successfully harness new technologies and turn them to their advantage.

Against this backdrop it should come as little surprise that the transport sector has its sights set on transforming itself and is investing heavily in new technologies to meet the challenges that lie ahead. Machine learning, robotics, 3D printing, next generation security and cognitive AI all feature in respondents’ technology roadmaps to some extent, but it is clear that it is IoT that sits at the heart of the transport sector’s transformation efforts.


The economic return generated for every dollar of investment on a capital project like transport

When we consider the potential applications for IoT, it is not difficult to understand why the transport sector is prioritising roll-out of this technology, and while some use cases are some years away from hitting the market, others are already making themselves felt.

Traffic jams are an expensive business.

The Centre for Economics and Business Research and INRIX, a traffic data firm, estimate that the total economic cost from road congestion in Britain, France, Germany and the USA could top $300billion annually by 2030, up from $200billion in 2013.

Yet the toll is more than financial, and congested roads can have severe implications for our health. The start-stop traffic in our cities burns more fuel and increases the amount of harmful nitrogen dioxide (NO2) emissions we breathe. London breached its annual air pollution limits just five days into 2017, leading to higher incidents of respiratory infections, heart disease, lung cancer and a host of other ailments. Indeed, the World Health Organisation estimates that more than 2million people die from air pollution every year and that a further 1.25million die annually from road traffic incidents.

It is for these reasons that IoT-based technologies hold much promise for the automotive industry. IoT-enabled Intelligent Transport Systems (ITS) will improve the flow of traffic and remove friction from our journeys, and connected cars and other vehicles will increase safety on our roads and drive efficiencies in the use of fuel.

Singapore, which has incorporated a range of smart technologies in its transport network and uses real-time data collection with location accuracy to help keep traffic running smoothly, stands as a prime example of what can be achieved. These intelligent solutions have helped it become one of the least congested major cities in the world, with an average speed on main roads of 27km/h, well ahead of London (16km/h) and Tokyo (11km/h). Applying these technologies more liberally around the world would be game-changing.

The transport sector is taking an early lead on innovation and these businesses are investing in new technologies that will enable them to tackle the challenges that tomorrow brings. But greater reliance on connectivity and ever vaster amounts of data – which the IoT brings with it – come new security risks and potential vulnerabilities. With that in mind, how well-placed is the sector to address them?

Data security – a bump in the road

Only a few years ago the prospect of self-driving cars and autonomous vehicles seemed the stuff of science fiction, yet they stand today as a very near and exciting reality. Technology giants and carmakers alike have joined the race and are investing heavily in this technology.

Indeed, trials of connected trucks and cars on our roads have already begun, promising enormous disruption to the automotive and logistics industries and wide-reaching social and economic benefits. But the technology itself is, in some ways, the easy part. Consumer trust will be harder to win, and while a recent study from Deloitte suggests that acceptance of connected and autonomous vehicles is climbing, particularly amongst the younger generations, it will take time. It is the safety and security of these vehicles that will determine the pace that that acceptance develops.

Conversations about IoT and security go hand-in-hand.

More connected devices necessarily leads to more vulnerabilities but while these vulnerabilities can be patched, they must be tackled head on. This of course applies to every sector. However, transport is so visible and vital that there are few that face such high levels of societal scrutiny. Connected vehicles have the potential to malfunction and robust cyber security is critical, relying as they will on data transfer from vehicle-to-vehicle and from vehicle to a control centre bringing inherent vulnerabilities.

Without adequate protections and assurances, transport companies will struggle to capture and maintain the trust of consumers, but our data indicates that few have yet perfected their approach to security. Fully 90 per cent of respondents believe that their organisation’s process to address cyber security could be stronger, while 39 per cent state that they will need to rethink their entire approach to data security altogether.


of transport respondents said that their organisation’s process to address cyber security could be stronger

These figures are troubling and give some indication of the work that the transport sector has in front of it as it strives towards the Fourth Industrial Revolution. As part of critical national infrastructure, the increasingly-technology dependent transport sector is a prime target for bad actors intent on wreaking havoc and causing disruption. IoT-related breaches are not hypothetical, and technology analysts Forrester have highlighted fleet management in transportation as an area that will be particularly vulnerable to such hacks going forward.

Cyber-attacks are not unprecedented in the transportation sector.

In 2008 a teenager sparked chaos in Poland by hacking into a tram network and derailing four vehicles, injuring 12 people in the process. More recently, hackers successfully carried out a ransomware attack on San Francisco’s public transport network, commandeering 2,000 ticketing machines and forcing the Municipal Transportation Agency to allow passengers to travel for free for a brief time. As we come to rely more heavily on technology, these attacks will become more frequent and more damaging.

There are several strands here and it is important to recognise that security is not simply a matter of malicious individuals breaking into networks to steal data and take virtual control of devices. While that is a distinct possibility, equally important is the way that transport companies manage the data that their IoT solutions generate, the mishandling of which could land these organisations on the wrong side of the regulators and quickly see consumer trust dashed. But again, some 61 per cent believe that their processes to combat data mishandling could be stronger, and while efforts are clearly being made to bolster security provisions, large gaps in security defences remain.

Addressing these shortfalls will take time, though, regrettably, a large-scale IoT-related security breach will concentrate minds wonderfully. Transport organisations should scrutinise the security of the fundamental infrastructure that underpins their IoT solutions to insulate themselves against threats.

For example, the cellular networks that many default to for connectivity do not inherently have an enhanced level of security, and in some cases organisations should look to other solutions, such as satellite connectivity. But until these core areas are mastered, with consumer trust and operational dangers sated, the transport sector will struggle to get the most out of IoT.


of respondents are looking to partner with another organisation to take on security concerns

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