THE railway industry is embarking on a period of “change, change, change,” declared Mr Guillaume Pepy, president of French National Railways (SNCF), during his keynote speech at IRJ’s International Railway Summit 2017 staged in association with IRITS Events on February 16.
“We are entering a brand new era with new leaders, with new technologies and new rules of the game,” Pepy said. “We cannot escape or ignore this new world as mobility is vital for societies and it is the lifeblood of our economies. As mobility leaders, we have to adapt very quickly to these changes.”
Pepy cited four key factors which are driving this change: sustainability, the new “power players,” new rules and new habits, and new technologies.
He told the audience that as the second-largest source of CO2 emissions after the energy sector, transport companies have to be proactive and act quickly to promote shared mobility, which on average produces 10 times fewer emissions than cars. But the business landscape is not what it was 10 years ago. Transformations in the IT sector and the power of the internet have facilitated the rise of new players into transport, which are rewriting the rules of the game.
“They are huge, they have catch, they have talent, and they are not afraid to upset the status quo,” Pepy said. “Uber is the world’s largest taxi company, which owns absolutely no vehicles. Facebook is the world’s most popular media owner but it produces no content. They can afford to experiment and challenge traditional industries, like the mobility sector.”
The rise of these companies reflects changing habits of users. Since the iPhone was introduced in 2007, Pepy said smartphones have become “an incredible tool for providing everything we need to move around.” Yet younger generations who have embraced this technology and are “digital natives” no longer consider ownership but usage as their core value for transport, which is reflected in today’s average age of purchasing a car in France: 57. “For many people, car ownership will soon be a crazy idea of the past,” Pepy predicted.
As a result the transport sector is exploding with innovations from new players attempting to perfect door-to-door service. But in a world increasingly dominated by large urban conurbations, and with 50% of the world’s population set to live in urban areas by 2050, Pepy says that only trains can carry such large flows of people. SNCF is embracing the challenge of perfecting the complete mobility system through its work on driverless vehicles, with a trial underway in Lyon for a last mile road solution.
“The new generation of automated driverless trains will bring cost savings and allow operators to run far more trains on the same line,” Pepy said. “This will make life easier for millions of passengers in big cities. For example, on Paris RER Line E, thanks to a new operating system designed by Siemens, we will soon operate 28 trains per hour at 120km/h, with a gap of 180 seconds between trains without any impact on safety.”
However, for new technologies to be effective and attractive for the new generation of passenger, Pepy argues that railways need to think like their customers and better understand the user experience. Digital technologies and data mining are critical for achieving this, while it is important that staff understand passenger needs. SNCF is embracing innovative technologies like virtual reality for training staff, and Pepy believes investment in cutting-edge concepts like Hyperloop and autonomous vehicles is exciting for its engineers.
“In an endless ocean of complexity, putting together a global door-to-door system is not an easy task,” Pepy said. “To succeed you need the size, scope, and financial strengths that are only available to players with a critical mass. However, size is not the deciding factor for success. Future mobility champions will be the fastest and most agile players.”
Pepy says this agility is critical for matching transport solutions to the needs of people living in a specific locality. While driverless cars might be trendy in Los Angeles, car pooling is preferred in France, and bike sharing popular in Germany and Italy. “It is up to us to design solutions aligned with local needs and climates in order to better meet customer expectations,” Pepy said.
It also extends to fostering innovation outside of its current scope of activities. Pepy admits that SNCF cannot achieve its objectives alone and has initiated incubators with start-ups, investing €350m in the digital field, while working closely with universities and other railways.
Maintaining an open mind to adapting and adopting the latest innovations and reacting to new passenger habits is clearly at the heart of Pepy’s vision for the future of SNCF, and railway transport. And with competition set to increase in Europe under the Fourth Railway Package, a development which Pepy says is “exciting,” it is a lesson that other railways from around the world would do well to follow. Because in the new transport market, standing still is not an option.