The Future of Road Transport

Rolf Bax

Rolf Bax

November 21, 2018 - 16:10

The Future of Road Transport

Future of Road Transport

In this blog post, we give you a peek into the future of road transport, based on the most recent research report of the IPU "Future of Road Transport". IPU was founded 70 years ago, and road transport has changed dramatically in those 70 years. Road transport connects companies and markets in a global economy. Despite the uncertainties of everyday life, road transport is growing and offers many opportunities, and technology and innovation are important for growth and success.

Trends in Road Transport
Road transport continues to grow and is expected to increase to 31,000 billion tonne kilometres by 2030, and 51,000 by 2050 (+64%). At the global level, there are also major developments, with an increase in China of 501,000 million tonne kilometres to 5,795,000 (10x as much), and India 6x as much. Growth in Europe is much slower than in Asia.

What trends play a role?

Geopolitical and economic disruption lead to many changes and pose a threat to the cross-border commerce in free-flowing trade. Higher trade barriers are threatening spread of technology and productivity. As road transport is one of the most important drivers of global economic growth these clouds pose a significant concern. In addition to global influences, the transport sector also faces huge changes, such as those concerned with rapid technological innovation, safety, and digitisation.
While the volumes increase, there is also tremendous pressure on the industry from the government and international organisations to make transport more sustainable. Research also shows that changing customer needs are a major challenge for the transport industry.

Barriers to innovation

Innovation and digitisation have had a big impact on the sector. New business models, innovative market entrants and innovative products have resulted in many changes. In order to survive in the long term, it is necessary for both small and large players to use technology. Automation, electric driving and digitisation assist the transport industry in addressing customer needs more effectively. There still are considerable barriers to be removed, because the industry regards the substantial financial investments as an obstacle and knowledge of the use of technological innovation is not always present.

The biggest opportunities offered by innovation are safety, automation, telematics, sustainability and open data, by:
1- Improving working conditions and keeping drivers safe
The majority of transport companies (92%) think that safety is the best opportunity offered by innovation. Smarter transport systems on the road and during loading and unloading improve safety. Another advantage is the softer side of technology, such as providing a community by connecting drivers while they are away from their families, because loneliness is an important issue.

2- Optimising operations and boosting productivity
80% of respondents think that new fleet management systems, new digital platforms for vehicles, and on-board telematics increase productivity. Examples of this are the use of smartphone apps or e-learning

3- Helping operators become more sustainable and environmental
Most transport companies understand that technological improvement can also contribute to making their own organisation more sustainable and greener. Think of greater engine efficiency, de-carbonisation, autonomous trucking, and alternative fuel technology.

Innovation contributes to increasing productivity and reducing costs (automation and telematics).

In order to seize the opportunities of innovation all parties must join in an integral approach. It will always be tough to be the first, pioneering company, while many other parties simply follow once the market transformation has been initiated. Increasing safety also requires additional training. Sustainability can be addressed in different ways, such as optimising the weight and size of heavy commercial vehicles and making better use of smart transport systems. Improved working conditions and shortage of staff will also need to be addressed. A clear HR vision of the future is necessary.

Technology is necessary in order to survive in the long term; the market is aware of this fact. By overcoming the obstacles and pro-actively seizing the opportunities transport companies can, now and in the future, survive in this changing transport industry.

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