March 01, 2017

Digitise or decay: the urgent need for technical agility

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THE rail industry is at a crossroads. On the one hand, the continuing increase in global population and the shift from rural areas to the cities is boosting demand for rail services, but on the other hand the unprecedented speed of technical development and the digital revolution threatens to leave rail behind if it is does not adapt and embrace change quickly enough.

These were two of the main messages to emerge from last month’s International Railway Summit staged in Paris by IRJ and our partner Irits Events in association with the International Union of Railways (UIC).

The UIC’s director general, Mr Jean-Pierre Loubinoux, set the scene for the conference by reminding delegates of the scale of the demographic and economic changes taking place. “The shift to the cities is the biggest migration in history, and 56% of world GDP will come from cities,” he said. The good news is that rail is the only mode which is able to move huge numbers of people simultaneously, while making a valuable contribution to sustainable mobility by helping to reduce the rapidly-worsening pollution in our major cities.

But there needs to be a huge increase in capital investment as Loubinoux pointed out: “According to the Organisation for Economic Cooperation and Development (OECD), $US 11,000bn needs to be invested in all transport modes up to 2050 of which 40% should be spent on rail. This is unparalleled in history but shows the scale of the challenge.

“$US 5000bn will need to be spent in developing countries to build new lines and upgrade networks,” Loubinoux continued. “Developing countries will need to spend 6% of GDP to improve the infrastructure in cities, but since 2008 spending on transport infrastructure is only 0.5% compared with 1% in Europe and 2% in Japan.”

Loubinoux also highlighted the $US 1000bn Asia-Europe freight market as a potential growth area for rail which currently has a share of less than 1%. While rail will struggle to attract the huge number of containers which go by sea, it does have a role as the steady increase in freight trains operating between China and Europe shows.

Loubinoux’s vision is for rail to become the backbone of transport within cities and between cities, coordinated with other modes to provide the door-to-door services which are vital for rail to remain competitive and relevant to the needs of people and industry.

Both Mr Guillaume Pepy, president of French National Railways (SNCF), and Mr Josef Doppelbauer, executive director of the EU Agency for Railways, highlighted the speed of technical change currently underway by reminding delegates that it is only 10 years since the introduction of the iPhone. There are now more than 2 billion smartphone subscribers globally, which has revolutionised access to information and the way people purchase travel, with paper tickets, timetables and travel agencies rapidly becoming a thing of the past.

Pepy believes that attitudes to car ownership rather than usage are already changing even before the launch of autonomous vehicles. “The average age of people who buy a new car in France is 57,” Pepy said. “Owning a car will be considered crazy in the future.”

He also pointed to the challenges posed by the disrupters. “The new players are huge, have talented people and are not afraid to disrupt,” Pepy observed. “They are rewriting the game. Uber owns no cars and Facebook creates no content. Driverless cars are disruptive, but so are driverless trains which will reduce costs. Door-to-door transport must lead to cost savings, and we can use driverless cars for the last mile.”

Pepy said SNCF is investing €350m in digitisation and is working with other industries and railways to realise its vision. He also pointed out that digital technology can increase capacity without the need to lay additional tracks. SNCF’s Nexteo CBTC project on the core section of Paris RER Line E will be able to cut headways from 180 to 108 seconds and allow 28 trains per hour per direction.

Doppelbauer was less sanguine about the future for rail. “The world is changing at a pace much faster than ever before,” he said. “Will mainline rail be able to manage the transition, or are we at the end of rail? I am afraid that in the rail sector we have a situation of decay. Rail needs to innovate just to keep pace with developments in the outside world. If we do nothing, stick our heads in the sand, everything will get worse.”

Dopplebauer stressed the need for the “right type of innovation focussed on the customer.” He called for collective innovation, and cited Europe’s Shift2Rail project as the first example. He also urged rail to avoid what he described as “un-novation” where improvements make things worse. He believes that rail needs to introduce more flexible processes and rely less on concepts such as the V model for project management which he says makes solutions more complicated than necessary. “The V model would never have helped to invent the wheel – it supports reinvention,” Doppelbauer said. “The electric light was not invented through a continuous evolution of candles. We need a new approach which must be based on agility, as used in the digital world.”

As Loubinoux pointed out: “Innovative technology is not enough. We need political will as well and we must not forget the human dimension.” Wise words indeed.

David Briginshaw

David Briginshaw joined IRJ in 1982 as associate editor, and was appointed editor-in-chief in 2001. He has travelled the world extensively interviewing many of the CEOs and senior managers of the world's railways and transit systems which has given him an in-depth knowledge of the global railway industry.

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