Digitalization in the Traffic and Transportation Sector

There is a large overlap between traffic and transportation. The two terms are therefore often used interchangeably. However, there are in fact, differences.

What connects traffic and transportation? While the traffic sector provides the infrastructure for the transportation of goods, animals, or people, the transport sector uses this infrastructure to transport them. Both sectors include air transport, maritime shipping, local and long-distance public transport, and courier, express, and parcel services (CEP). Both sectors also include service providers such as management or transportation software providers or fleet management solution providers. More important than the transportation sector is the traffic sector. The traffic sector also includes all aspects of planning and implementing transport systems, and ensuring the mobility of people and goods. This primarily involves the creation of infrastructure as well as traffic planning, traffic management, and traffic safety. In conurbations in particular, the coordination of the entire traffic volume is one of the tasks of the traffic industry. This also includes securing roadworks, traffic light control, and parking space management. Traffic covers the entire mobility of living beings or goods on all conceivable traffic routes.

In turn, the transport sector encompasses areas such as the management of returnable transport items (RTIs), the entire topic of the Logistics recycling system, and logistical asset management. The aim of digitalization is data connectivity in the transport sector.

According to a report by ‘Precedence Research’, the global market for intelligent transportation systems will grow from 109.84 billion USD in 2022 to 381.18 billion USD in 2032. This would correspond to annual growth of 13.3 percent. The traffic management segment will account for almost 34 percent of revenue in 2022. Strong growth is also expected in the parking management segment. All management tools used in the traffic sector are IoT-based. For this reason, intelligent services in particular, dominate the market for intelligent traffic systems. They have a revenue share of over 42 percent.

Europe is leading in the integration of intelligent traffic solutions. In Europe, the focus lies more on solutions to improve traffic management and road safety than on other continents.

The IoT market for transportation will grow by almost 22 percent in the ten years from 2022 to 2032. This is according to a report by ‘Precedence Research’. Growth of more than 20 percent is also forecast for the rail segment by 2032. The market for software in the transport sector is even expected to grow by 48 percent of total sales, with increasing demand for cutting-edge technical solutions such as robotics, drones, and self-driving cars, as well as advanced wireless communication solutions that are driving market growth.

In many cases, RFID technology is used to identify vehicles and therefore, also to track the load. The vehicles are tagged with windshield labels or smart license plates. An innovative solution from Kathrein Solutions and Tönnjes International Group, in which UHF RFID antennas are located in manhole covers, is the latest trend. The manhole covers are integrated directly into the road surface. This eliminates the need for meter-high gates, signage, and antenna installations that are integrated into the road surface: These meter-high structures could be replaced by intelligent manhole covers in the future. This would reduce installation and maintenance costs. The built-in antenna has a reading field that radiates in all four directions, enabling both reliable identification and directional detection of vehicles. It is important to tag vehicle license plates with RFID transponders.

Transponders are also used in license plates or on windshields for parking space management. Antennas are also installed in traffic light systems, which enable traffic lights to be controlled according to demand, and to optimally coordinate traffic with the bicycle traffic that often runs parallel. In addition, traffic is also monitored directly by camera systems. Traffic-related air pollution in urban areas is also measured via Bluetooth LE or LoRaWAN gateways in conjunction with sensors.

More than 75 percent of all EU citizens aged between 14 and 74 have already ordered goods online. The acceptance of e-commerce is growing rapidly.

Online customers have high expectations. They want to pay as little as possible for shipping and returns. At the same time, they want short delivery times and high delivery accuracy. Ideally, transport companies must adhere to the delivery time window and show a high degree of flexibility with regard to the storage location of the ordered goods. Fast delivery is a major challenge for transport companies. Wireless IoT technologies enable the optimization of transport routes and the intelligent compilation of planned tours, or the creation of an optimal transport network.

In most cases, a night shift is necessary to put the goods together as groupage, which is why same-day delivery (SDD) is usually only possible in urban regions. An express surcharge is also often levied for this form of delivery. Originally, high growth rates were forecast for same-day delivery in the 2010s. This statement has since been corrected, as although selected products such as medicine or spare parts are sent by express, the majority of goods are sent by overnight express due to the transit times. Retail chains in urban regions, on the other hand, offer their customers same-day delivery, as food naturally has to be delivered fresh.

There are many areas in the traffic sector where innovations are conceivable in order to improve the efficiency, safety and sustainability of transportation. The objectives are the conservation of resources, demand-oriented logistics processes, and the reduction of fuel consumption. As a result of these efforts, both energy consumption is reduced and the CO₂ footprint is improved.

It is highly likely that we will see the following innovations in the future:

• Autonomous driving
• Electromobility
• Alternative drive technologies
• High-speed transportation systems
• Intelligent traffic management systems
• Drone delivery services
• Blockchain technology for the transportation and logistics sector
• Intelligent containers with integrated
• Sensors for condition monitoring
• Migration of IoT platforms
• Integration of RTLS solutions
• Sharing economy platforms
• Integration of AI and ML algorithms
• Innovative packaging materials
• Technologies for load optimization
• Smart parking lot management

The challenges for the transportation sector in terms of wireless information technologies are immense. For large transportation companies, building IoT platforms is often efficient. Smaller transportation companies or even one-man operations usually do not have the resources to build or operate IoT systems. As a result, smaller transport companies are not digitally connected to higher-level systems to the same extent as large logistics companies.

The electronic and industrial labeling of goods or parcel shipments in combination with handhelds or smartphones with a scanner module have largely replaced paper as a document in the transport industry.
Large logistics companies have already installed corresponding wireless IoT solutions at the outgoing goods area or in trucks so that logistics processes are automated.

Despite the increasing digitalization for companies in the transport sector, the industry as a whole is facing major challenges. These include traffic congestion in metropolitan areas, highly volatile fuel prices, the reduction of greenhouse gas emissions, and air pollution, regulatory requirements, and technological progress. Technological progress is a challenge, as it means a very high integration effort for medium-sized and small companies. Finally, trade conflicts also pose a major challenge for transportation companies, as they influence or even disrupt digitalized supply chains. Planned transports are canceled without replacement or rerouted at great expense.

For retailers, especially smaller ones, online retail presents a more complex challenge. When retailers opt for a fulfillment partner, they outsource warehouse management, picking, shipping, and returns management to this partner or central online store. In any case, these stores rely on IoT platforms to manage the complex ordering, picking and returns processes, and the systems of all parties involved in the logistics chain must be compatible. At the same time, data protection is one of the most important tasks, as customer and delivery data must not be stolen or misused.

Sustainability for companies is an increasingly important issue for customers in e-commerce. Every packaging, every transport, and every return leaves a CO2 footprint. Online retailers, but also transport companies, increasingly need to communicate their environmental footprint in order to gain the trust of customers. One solution in this area could be to set up packing stations or parcel stores. The PUDO (Pick up & Drop off) method reduces CO2 emissions. In fact, more than 50 percent of online shoppers are willing to pay a surcharge for sustainable delivery, which is why cargo bikes and electric vehicles are on the rise in urban areas.

Efficiency is achieved in transport logistics when products are transported as part of an efficient container management system. Pool systems ensure that packaging is reduced and logistics routes can be controlled efficiently. If sensors are also used, the quality of the goods is also ensured, as vibrations, temperature fluctuations, or weather influences are documented. The movement of the containers can be tracked so that the transport route can also be monitored. AI also makes it possible to reduce empty runs, reduce the CO2 footprint and monitor the cleaning cycles of the containers.