Western Europe is in the midst of a sweeping deregulation of intercity motor coach markets. As a result, long-distance passenger rail services are facing new low-cost bus competitors that are rapidly gaining market share. Passenger rail operators must adapt and evolve to counter not only these new bus services but an increasingly diversified mobility market.
Driverless vehicles are about to rewrite the rules for transporting not just passengers, but freight, too. Driverless cars, which are in development by Google, Tesla, Apple, and a slew of automakers, are expected to revolutionize personal transport in the next decade. Soon, driver-free trucks and locomotives will become a new economic imperative for freight railroads and motor carriers, as well. The automation of transportation vehicles will have great impact on technology, regulations, and the economy.
For rail and other transportation industries, the fourth industrial revolution (“digital industry”) promises continuing acceleration of innovation on both the supply and demand side. From the manufacture of rolling stock to how rail operators serve their customers, new technologies will lead to entirely new ways of doing business. Disruption of value chains will reach unprecedented levels too, driven not by a few proprietary standard setters, but instead percolating up from the most agile and innovative in an interconnected world of “makers” as well as consumers.
North American freight railroads are facing a host of structural industry changes that could dampen their future growth prospects.Coal traffic is declining and crude oil looks unlikely to grow. Driven by e-commerce, supply chains are becoming faster and shorter, impacting intermodal.Technology may lead to a step change in trucking competitiveness. In the face of these changes, can the industry make the breakthrough transformation that’s required?
Oliver Wyman’s Transport & Logistics Journal is one of the firm’s longest-standing publications. The May 2016 edition includes all of the above articles related to railroading, and more. Read about what’s new in Travel Cards (Co-branded travel cards are winning the Millennial wallets in time for summer travel), Inline Travel Booking (ancillaries face new challenges), Postal Services (in a whirlwind of change), Trucking (Uber is on its way), and Aviation (growth patterns, innovations, predictive maintenance, and optimization of end-of-life for big assets).