Reflections and predictions in the transportation industry 2017/2018

Finally 2018 arrived and a exciting sometimes divisive and decisive 2017 ended. Certainly, the shift in US politics from a pro sustainable energy to a pro fossile energy has create a changing climate for projects in the US as well as in other countries. Nevertheless, Europe and Chine are surpassing the US in technical development when it comes to transport technology and will possibly lead the world in the future (at least regarding these aspects). I’d like to take this opportunity to reflect a bit on what happened in the transport industry and what is going to happen next year by looking at three aspects: The automotive “rolling stock” industry, the railway rolling stock industry and on technology.

Automotive going electrical

2017 has certainly showcased the break through of a mid-level electric private car with the commencement of the Tesla 3. While Tesla is continue to ramp up its production in early 2018, there are more and more automotive suppliers presenting their full electric concepts or even starting selling them. Interestingly, show case opportunities of new concept cars and new models have been diverted from the traditional automotive show to the Consumer Electronic Show (CES) and other “tech” events.

While there are many traditional companies and start-ups now developing new technologies and making them market ready, I have last year also seen the first phony company in that sector that is selling, as I call it, snake oil which is technologically not possible.

In 2018 we will see three major effects: The impact that electric trucks, for instance the one from Tesla, will have on city logistics since they might be allowed to drive at night. The further cost reduction of batteries and electric energy will make traditional transmission for heavy use vehicles obsolete. New car manufacturers from China will enter the European and US market with cheap electric cars – powered by BYD and other battery manufacturers. Furthermore, we will see a next step when it comes to autonomous vehicles and autonomous taxis but this depends highly on the approval processes by the countries’ regulators. We will, however, not see a fully autonomous vehicle that is approved for mass-usage in 2018.

Consolidation and reduction of work-force

A major impact in 2017 was the combination of Alstom Transportation and Siemens Mobility to a new major player in the market. This will result in the closure or some manufacturing sites in 2018 with respective job-cuts. While some shareholders may believe this will increase dividends, I am almost certain the these super tankers have reached a size that does not allow fast and dynamic decision processes. This is why I expect that small niche players such as Stadler, CAF, PESA etc. will become more successful in 2018. It is even possible that new entrants, coming from the full electric traction chain industry, could enter the market by providing remodeling and spare parts across the globe.

What we will also see, possible at Innotrans, is companies supplying spare parts from the 3D printer, And possibly rolling stock tenders asking for CAD or STEP files from all parts so railway undertakers can supply themselves in the future with spare parts.

Skies are starting to clear again

Technology wise, we will see in 2018 many new entrants that, with smart solutions, will enable to lever companies and industries out of software dependencies. This will be the case for instance for ground distribution systems (GDS) but also for booking platforms for public transport as well as for traffic information, distribution of parcels/cargo and industry specific ERP systems. The fog of “secretive” and protected interfaces within “black-box” software solutions will more and more fall, incumbent suppliers will be replaced with new entrants or with open source solutions.

So, many changes ahead in 2018 – I wish you all a great start and successful journey through these possibly stormy waters.

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