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Digital technologies are redefining and revamping the transportation industry

Mohammed Gayaz Ali Asghar
1st Aug 2018
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The transportation industry has, over the years, undergone a significant shift due to technological advancements. A spate of new-age technologies is gradually expanding the scope of the transportation industry from a small commuting market to a digitally “connected” market space. From ticket booking to ride sharing to autonomous driving and travel analytics, the scope of the industry has expanded, covering a host of affiliated services.

Another interesting thing to note is that seamless integration of different modes of transportation is taking place as we speak, all thanks to mobility. The ability to provide information anywhere, anytime has opened new opportunities to make the existing transportation network far more efficient and user-friendly. Over the course of the last decade, the transportation value chain has grown to include businesses such as e-ticketing, payment wallets, shared mobility, and last-mile connectivity.

New-age systems allow commuters to compare the time, cost, convenience, carbon footprint, and health benefits across all modes of transport, broadening their range of choices and allowing decision making that takes into account real-time conditions.

Image: Shutterstock

Challenges facing the industry

While the transportation industry embraces technology, it is also fraught with difficulties. Fuel forms a large part of the operational expenses for transportation companies, and with unpredictable oil prices, the industry faces a significant challenge in rising operational costs. Hike in ticket prices is raising alarm bells, resulting in falling ridership, a considerable problem which, if not addressed immediately, can burrow a deep hole in the pockets of transportation companies.

If the fall in ridership is pinching the revenues of transport companies, driver shortage, especially in the logistics segment, is a big pain point that needs to be quickly addressed. Driver retention is another area where the logistics companies need to work to keep their fleets stabilized and running. Roads and infrastructure development, especially in third-world countries, needs rampant push without which the transportation industry is bound to suffer. Lastly, embracing technological changes that are meant to enhance the performance and growth of transportation providers is itself a big challenge.

New-age technologies transforming the industry

Smart and connected devices through the Internet-of-Things or IoT are enhancing driver experience and bringing about a radical change in the approach to driving. For example, Electronic Log Devices (ELDs) are ensuring that drivers are limited to only 50 hours of driving per week with a two-day rest period, thus ensuring much safer roads. Blockchain technology is playing a crucial role as it provides accuracy of performance history records, so when a truck comes for selling, there is absolute transparency between buyers and sellers.

The growth of the e-commerce industry has not only disrupted the retail industry but also had a significant impact on the growth of transportation and logistics. Last-mile services have reimagined the logistics segment with a host of startups entering the fray and disrupting the ecosystem. Data Analytics is helping transportation companies study and analyze their processes and operations and helping them maximize efficiencies and go lean on costs.

Digital driving transformation

Digital is enabling a transformative change in the transportation ecosystem. It is ushering in better efficiency levels at operations, helping transportation companies improve on the processes and fleet movements. IoT devices allow supervisors to track vehicles real-time and ensure better use of vehicles on the road and in the depot.

Digital is also actively enhancing and driving the safety of vehicles and the passengers within. Embedded sensors on vehicles allow greater visibility and provide operators with real-time information on vehicle status. Sensors along with intelligent video infrastructure and analytics help operators identify incidents and facilitate immediate and automated response.

Another significant disruption in the industry is the progressive change towards customer engagement and service. Digital technologies are bridging the distance between operators and customers and are actively improving the passenger experience. Smart ticketing, where passengers can generate mobile tickets and pay for them through mobile wallets, is leading to a ‘frictionless’ and hassle-free travel experience. The seamless integration of all modes of transport from Public to Private to Ride-sharing is allowing passengers to plan and complete their journeys without much trouble.

Industry adopting and embracing digital

Digital is enabling transportation to go beyond the usual to move towards shared mobility or a shared economy. Shared mobility is creating excellent opportunities for both transportation companies and the commuters. While transportation companies find new market spaces and additional revenue, commuters are finding amazing benefits through much lower prices. Logistics companies are collaborating with each other through shared warehousing and transportation, and thus stand to benefit through partnership.

The industry has slowly but steadily been adopting digital technologies and many operators are looking to increase their investment in these technologies going forward. ARI, the largest privately held fleet management company, with around 1.4 million vehicles around the globe, is using Telematics and IoT technologies to manage its fleet better and also to study driver behaviour. Some other fleet companies are using data analytics to analyze vehicle performance and improve operations while others are embracing predictive analytics to ensure predictive maintenance and save on costs and time.

Large fleet-owning companies such as AT&T and Coca-Cola have embarked on digital to understand driver behaviour, idle times, routing, and loading to derive benefits regarding costs and increase profitability. They are also investing in the new-age transportation technologies and smart devices.

All said and done, adopting digital is not as easy as it seems. There are legacy systems and processes to be tackled, people’s mindset to be changed, technologies to be first understood before getting implemented, and the ever-present concern of heavy investment. Transportation providers should focus on a few key aspects as they look to embrace technologies. For starters, it is about the driver buy-in, to help drivers understand the importance and benefits of technological adoption. Going all out with regard to adoption might do more harm than good. So, it’s essential for transportation companies to assess their technological needs and the budget and focus on those that are a priority and that can be implementable.

This way, transportation providers can redefine their operations and business through the adoption of digital technologies.

Mohammed Gayaz Ali Asghar is the Assistant Manager, Digital Transformation Practice at Sasken Technologies Limited.

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)

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