DIGITALISATION has only emerged as a discussion topic at railway conferences during the last few years. At first it was clear that very few senior railway managers had a clear grasp of what the real implications of digitalisation were, with many just paying lip-service to an emerging trend. To be fair, very few people knew much about the subject let alone how it could be applied effectively and what the main benefits would be.

Digitalisation has clearly been a steep learning curve for many in the transport industry, and it is not helped by the fact that the technology is developing very rapidly, with innovative start-ups popping up left, right and centre. German Rail (DB) was one of the first big railways to appreciate that digitalisation was not just another passing fad, but something with real potential to be a game changer. Other railways are now rapidly coming to the same realisation.

However, the big question is, will rail, with its long history, long asset life, and high investment costs be able to react quickly enough, particularly as digitalisation is developing rapidly and at an accelerating rate?

Unfortunately, according to Mr Baher El Ifnawi, global lead, development corridors and regional integration, with the World Bank, it is not in rail but road transport where the real innovations are taking place. He believes it will not be long before we see connected autonomous truck fleets providing warehouse-to-warehouse transport, while Maersk and IBM have already launched the first cross-border logistics solution using blockchain.

While the future for freight transport looks bright, the outlook for rail is perhaps less rosy. Mr Joris d’Inca, express and logistics sector leader with Oliver Wyman, expects a 3.7% cumulative annual growth rate in the global logistics market from €1.8 trillion in 2015 to reach €3.2 trillion by 2021, with rail freight growing at 1.4% compared with 5.7% for courier and express parcels, 3.8% for road freight, 2.6% for ocean freight and 2% for air freight. Only inland water has a lower forecast growth rate than rail at 1.2%.

“The logistics industry will experience rapid change over the next few years, and digitalisation is a major challenge and opportunity alike,” d’Inca says. He lists a number of trends which he believes will lead to major changes in the logistics market:

  • nearshoring (the practice of transferring a business operation from a distant country to one closer to home), automation and the introduction of new technologies will trigger a shift between transport modes, primarily  in favour of land transport
  • customers and regulators increasingly require industry or customer-tailored end-to-end logistics service offerings
  • Asia is the number one growth driver, accounting for more than 60% of total growth up to 2020, while Africa and the Middle East will provide selected opportunities for market growth
  • “parcelisation” of transport flows will impact the whole transport and logistics value chain and trigger a reduction in the use of intermediaries in existing value chains
  • new entrants and former suppliers or clients will carve out lucrative elements of the logistics value chain by exploiting digital technologies
  • incumbents will face competition from fast movers that use mergers and acquisitions to boost their organic growth plans, and
  • continued consolidation in carrier industries (sea, land, and air) through alliances and mergers with tighter capacity management by carriers.

“I think that 70-80% of the logistics industry will be either partly or fully digitalised by 2030” d’Inca forecasts. “This means things such as e-forwarding, autonomous fleet management, and virtual warehousing.”

D’Inca says this will require new analytical and digital capabilities, such as forecasting and dynamic adjustment of operations. Value-added services, such as tracking and tracing, fleet management, and supply chain management benchmarking will be required, along with the complete integration of client resource and treasury management systems. New factors will become critical for market competitiveness, including a better understanding of the customer journey. However, solution competency for complex transport services remains core.

D’Inca says carriers are already asking ‘why can’t we have direct contact with our customers?’ Innovations like blockchain should allow this to happen by cutting out middlemen.

“This means every legacy player needs to digitalise and develop new business models,” d’Inca continues. In terms of technology this means installing sensors on assets, automation and the introduction of robotics and artificial intelligence, data consolidation as well as security and encryption. Organisationally, companies need to become more agile with cross-functional teams. They will need to introduce a digital organisation and governance, and develop talent and digital leadership. Commercially, operators should introduce dynamic pricing, be flexible and ready to come forward with the next-best offer, and introduce a digital payment system.

“The rail industry needs to innovate at a faster rate and be able to write off investment earlier than it does now,” d’Inca urges. He says innovations in road freight by the 2020s, such as the introduction of gigaliners carrying around 60 tonnes and with a 157m3 volume, self-driving trucks allowing platooning, and fuel-efficient engines could lead to 30 or 40% gains in productivity, which rail will find very hard to match unless it starts to take action now.

As he sees it, the challenges for rail are its significantly longer innovation cycles of 25-30 years, compared with just five years for road, and the need for rail to change a complex system with a lot of players involved.

Some railways have started to realise that new technology will allow trains, for example, to be replaced sooner than every 30-40 years because the benefits of introducing new technology are sufficient to justify early replacement. Nevertheless, for most railways adding sensors to existing vehicles and infrastructure could be sufficient to reap the rewards of digitalisation.

As far as digitalisation is concerned, d’Inca says behind every new model there is a start-up. “In 2017, more than $US 3bn was invested in start-ups.”

Mr Max Peterson, international vice-president with Amazon Web Services, says Amazon values speed and agility. “Are your IT systems prepared for the Fourth Industrial Revolution?” he asked delegates in Genoa. “Digital disruption is the change that occurs when new digital technologies and business models affect the value proposition of existing goods and services. But if your organisation and your IT systems are prepared for the Fourth Industrial Revolution, you can be the disruptor.”

Anderson says the Internet of Things (IoT) is becoming pervasive. “With the IoT, any object can now be connected together online with the ability to communicate and capture data for analytic and control purposes,” he says. “If you knew the state of everything and could reason on top of that data, imagine the problems you could solve.

“Does your organisation have a data strategy? If so you can start to use the IoT. If not you need to start now.”

Anderson says machine learning will lead to greater insight by using big data and mathematical models to give systems the ability to learn and improve from experience without being explicitly programmed. “If you could analyse massive quantities of data quickly and accurately imagine the insight you could have to identify profitable opportunities or dangerous risks,” he says.

But he warned that companies must become as adept at securing their digital information and systems from unauthorised access and damage as they do their property. He says this will require integrated security by design with high levels of automation.

Blockchain is one of the new technologies which shows great promise to revolutionise the way freight companies do business. Mr Julien Marcadé, blockchain practice director with Primis, Israel, described blockchain as the “trust machine that eliminates third parties.” He estimates that the blockchain market is worth €7bn up to 2021 and one-third of companies will implement blockchain before then for a gain of €3bn.

“Blockchain enables companies to exchange value on a peer-to-peer network without the need for a bank or insurance company,” Marcadé explains. “A company can create a block, and distribute documents to all members using a cryptographic secure network.

“To implement Blockchain you need a database and to be working with several stakeholders, and you need trust and traceability between all blockchain stakeholders. In a blockchain all information can be accessed in a single environment without the possibility to modify it.

“A lack of traceability leads to lots of claims and charges, whereas blockchain provides traceability throughout the transit. It is difficult to trust someone you don’t know and to access certified data. Customs officers have access to data ahead of time, and drivers can access the data as well. Blockchain allows smart contracts to be introduced and payments can be made instantly, avoiding bank delays and charges.”

Mr Gilbert Réveillon, CEO of Mobile Loov, France, says security is assured with a blockchain because as soon as a document is entered it is time stamped, which cannot be changed. “Blockchain is the best cyber security tool,” he says “With blockchain, you know exactly where a train is.”

However, both Réveillon and Mr German Sukonnikov, deputy head, corporate IT department, with Russian Railways (RZD), believe that widespread adoption of blockchain is being held back by the existing railway culture, a reluctance to work together, and a lack of understanding of what a new business model will look like.

Sukonnikov says RZD is developing a distributed data ledger single platform based on blockchain technology and has two pilot projects. One covers supply chain management for planning a railway-port delivery service. The other involves supporting the lifecycle of a defined fleet of freight wagons covering their condition and movements. For the latter, Sukonnikov says RZD has developed a prototype which was going to be shown to its management last month.

“We have quite ambitious targets,” Sukonnikov says referring to the fact that there are 600 major owners of wagons in Russia, with a total fleet of 650,000 wagons. There are 10 million transactions per day and 11 per wagon per day, with 8000 system participants.

“There are two open questions at the moment,” Sukonnikov says. “What kind of software should we use? We have chosen a solution, but it is not fully approved yet, and what are the financial benefits? We have some estimates of what a transaction will cost, but we are still evaluating the information.”

Advanced infrastructure measuring technologies have been gaining in popularity among railways for several years. Mr Vivek Mohan, mechanical engineering freight director, with Indian Railways (IR), pointed out that sensor networks now generate huge volumes of data, but he said that real time monitoring is necessary along with a big data management infrastructure. Mohan listed five steps in the analysis of big data:

  • preparation involving exploring and pre-processing
  • analysis using modelling and analytical techniques
  • presenting the results, and
  • acting on the results.

Mohan said managing big data successfully would enable predictive as well as precision maintenance, leading to better asset reliability, increased serviceability and improved safety.

Mr Brian Monakali, general manager, capital planning, with Transnet in South Africa, and chairman of the International Heavy Haul Association (IHHA), set out his company’s vision for smart assets which would go beyond the limitations of current rail systems. He envisages smart trains which communicate with each other and the control centre regarding their location, speed, and the track conditions ahead leading to autonomous operation. Smart trains would also measure the infrastructure as well their own condition. Smart infrastructure would be self-aware and self-diagnosing as well communicating with the trains and control centre. This would require intelligent condition monitoring and real-time condition assessment systems.

“Smart infrastructure would eliminate the need for lineside signals, and we could use drones to monitor trains in remote areas,” Monakali told delegates.

“Data is coming from customers, ports, the trains and the track, which is giving some trends but we need proper connectivity. Data is key, but it must be clean, and are the systems measuring what they are supposed to measure and at the right frequency. Customers want predictability so we need to eliminate human mistakes. If you don’t have clean data, and send it to the right place for analysis, you are not going to achieve anything.”

Mr Nicolas Czernecki, director of wagon management, with French National Railways (SNCF), said that road freight is “highly innovative and a huge threat to rail.” He said road is now in the modern age, whereas rail has an old production system which is both very labour intensive and extremely time-consuming.

“We need to modernise the way we produce trains, improve safety, and improve data acquisition,” Czernecki says. “We need to enter a new automated world.”

Czernecki’s vision of the digital freight train is to fully equip it with electronic devices and sensors, such as a brake sensor to automate the brake test. “The train should be a local IT network,” he says. “The digital freight train will enable railways to provide new services with better productivity. There will be instantaneous localisation throughout Europe to improve fleet productivity, accurate distance management to benefit maintenance, automatic detection of safety-related issues, geofencing, and digitalisation and automation of rail operations.” Geofencing involves the use of GPS or RFID technology to create a virtual geographic boundary, enabling software to trigger a response when a train enters or leaves a particular area thereby improving customer service.

Czernecki says to introduce digital trains, wagon keepers will need to fit their fleets with sensors to collect data for themselves and their customers, while train operators will have to provide communication between the locomotives and the wagons. He says this will require cooperation between wagon keepers and train operators to ensure common standards. “If each keeper develops its own system, we won’t be able to have communication within the train,” Czernecki says.

He says the smart wagon will quickly become a reality, and SNCF plans to partner Traxens to equip 5000 wagons with Traxbox sensors by the end of the year. “SNCF already runs some complete digital trains, including the brake test,” he reveals. “Other major operators such as German Rail (DB), Swiss Federal Railways (SBB) and Rail Cargo Austria are also working on the train of the future with a high level of digitalisation and automation. If we implement the digital freight train we will all be winners - it should be mandatory.”

As Czernecki points out, the vision is there for a digital freight train, and the first steps are underway to achieve it. All it requires now is determination to implement it. Long live the digital railway.


The digital railway in practice

NORWAY’s infrastructure manager, Bane Nor, is already embracing digital technology, and is applying it to track components in a bid to improve punctuality.

“One of the problems we have is the age of our equipment which leads to delays,” Mr Kjenne Sverre, executive vice-president with Bane Nor, told IRJ. “Track circuits and switches account for about 50% of signalling-related delays.

“We initiated a programme two years ago to introduce predictive maintenance. We started with Microsoft using machine learning to analyse switches over time, so that we can see if a fault is developing.

“We monitor power and time on a switch and set a threshold,” Sverre explains. “If the power consumption exceeds the limit then something is wrong and we need to take action to repair the impending fault.” If the system identifies a potential fault, Bane Nor aims to remedy the fault within a week.

When a member of staff logs onto the system, it displays a list of switches with upcoming issues. Detailed information is available for each switch to show exactly what the fault is.

“We know exactly which point machines on a switch have a failure, and the maintenance staff know exactly what they need to do to repair it,” Sverre says.
As Sverre points out, it is very difficult to report on impending failures which have not occurred without such a system.

Sverre says the system does not cost much to install, but it will have a very positive impact on Bane Nor’s ability to switch to predictive maintenance. “By the end of this year, we will have equipped 50% of our switches with the system, and 70% by the end of 2019. We will never be able to prevent 100% of the failures on switches, but I think we will exceed 60%.