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The changing economics of transportation and logistics

June 02, 5:59 UTC+3
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KEY CONCLUSIONS:

  • The growth of e-commerce is a driver behind air cargo transportation

“From our statistics, e-commerce grew from 2010 to 2015 from 16% to 74% representing the international man/tonne every year. <...> This number will be further increased by 2025. That is a very important opportunity for air cargo,” said Fang Liu, Secretary General, International Civil Aviation Organization (ICAO).

  • Greater demand for high-speed passenger traffic

“Last year, we transported almost five million people (by Sapsan – Ed.),” said Alexander Misharin, First Vice President, Russian Railways.

  • Increased mobility and workplace

“On one hand, we have enforced through the use of digital technologies the remote location working <...>, but in general, we believe that we could move work to the people and therefore, we could have a better strategy for real estate and office space,” said Bruno Di Leo, Senior Vice President, IBM Corporation.

CHALLENGES:

  • Bureaucratisation of transportation processes

“For the time being, in air cargo, we still use paper documents, that is an impediment to the growth and the efficient handling of air cargo. In particular, air cargoes, as I said, in e-commerce area, go very fast,” said Fang Liu.

“Every single container on average has to go through thirty different approvals and different paperwork in every single port, and every single port has a different set of paperwork, approval processes and languages,” said Bruno Di Leo, Senior Vice President, IBM Corporation.

  • Urban traffic growth

“Traffic jams are costing the EU 1% of GDP every year. People are wasting time in traffic, and it also has consequences in terms of pollution”, said Pierre-Dimitri Gore-Coty, Head of Europe, Middle East and Africa, Uber Technologies Inc.

  • Security and safety

“Cyber security and safety issues relevant both for individuals as well as infrastructure and traffic management <...>  are now coming to the fore”, said Alexander Misharin.

  • Investment in previous-generation technology

“In the developed economies, <...> reinvestment involves the use of previous-generation technology. <...> This practically means that every USD 120–150 million out of USD 1 billion invested into an infrastructure facility is spent on the preceding technology, which could be replaced with a new one, and this is a global problem. In Russia,<...> the use of preceding technology accounts for 23% to 32% of the investment in general,” said Albert Eganyan, Chairman of the Board of Directors, InfraONE.

SOLUTIONS:

  • Unifying transportation regulations

“It is important for the governments to adopt the regulations, in particular, according to the Montreal 1999 Convention for the Unification of Certain Rules for International Carriage by Air. For the time being, 125 states ratified it and are now members to this convention,” said Fang Liu.

  • Introducing new technology

“We are now working very closely <...> in order to promote electronic waybills and build a platform <...> to process e-commerce parcels by using this new technology <...>  so that we can improve the environment to enable e-commerce to grow further” said Fang Liu.

“We believe that blockchain is the technology that we should all be paying attention to. It is going to transform the way logistics and many other industries operate,” said Bruno Di Leo.

“Today, we are talking about the construction of new facilities and new railways. This is where I believe the use of BIM technology is of great interest, with opportunities to build models and carry them on from early project stages until the last day of service, supporting all these processes along the way, “ said Alexander Misharin.

“When it comes to the direct use of satellite technology in the transportation industry, it is already on board in our cutting-edge ERA-GLONASS and Platon transportation projects <...>; it is the Platon system that enables us to manage the country’s freight traffic flow by applying different sets of managerial solutions rather simply analysing it,” said Maxim Sokolov, Russia’s Minister of Transport.

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