Technology Section Feature
Co-founder & CEO, Cordel
As the world adapts to new ways of working, investing and operating – digital offers railways new opportunities to recover and prosper
Eighteen months into the pandemic, companies worldwide continue to reinvent themselves rapidly. They have temporarily closed offices, updated their policies and adopted new technologies to stay productive and competitive in the face of unprecedented challenges.
Every railway must define and address the new normal: each must decide what mix of new technologies to adopt and adapt. But common to all is the steep ramp-up to a digital-first approach in order to maintain the performance, profitability, and safety levels that they need to be successful.
Under short term financial squeeze and longer term capital opportunity, three strategic priorities for railways are emerging: 1. to do more with less, 2. to reduce environmental impact and 3. to generate more and different revenue streams. Each of these priorities has its nuances and specifics, but however they are implemented, the overarching principle of a digital-first approach is prevailing.
1 – Do more with less
Since revenues are down on pre-pandemic numbers, this squeezed operating budgets for railways. As economic activity recovers, all leading railways plan to achieve more safety, more compliance, more efficiency and more revenue with fewer costs.
Doing more with less has a pleasing sound, especially for taxpayers of publicly-owned railways. A digital-first approach to operating and monitoring assets can make the snappy soundbite real.
For example, technologies such as AI and big data Machine Learning enable more closely targeted condition-based maintenance and unlock the route to predictive maintenance. Automation of maintenance immediately reduces boots-on-ballast safety risk exposure and increases asset uptime, growing revenue-earning capacity. Miniaturising (and reducing the price tag on) digital tech can further raise infrastructure availability: by shifting monitoring onto trains already in revenue service, we can do away with the ‘special’ trains that take up slots.
The more rapidly railways adopt new technologies and automated processes; the sooner they benefit from the positive ROI of their ‘more with less’ investments.
2 – Reduce environmental impact
Efficient resource usage not only reduces negative externalities for the environment, it also makes commercial sense. Exploring hydrogen and renewable electricity are obvious initiatives, but the possibilities go way beyond energy sourcing.
As the reality of climate change hits home, green-washing is increasingly being called out for the sham it is, challenging corporates and governments to get real about how they do business, assessing and managing down their carbon footprint.
Digital new tech can create insight from data that’s already being captured, such as applying AI to point clouds to improve the management of core railway basics like ballast, delivering immediate carbon reductions by enabling more timely, and more precisely focused, interventions. Wider data capture and intelligent processing enables data-driven decision-making processes in all departments of the railway, from scheduling to safety to procurement to creating climate resilience.
Railways worldwide are mining deep data by accelerating investments in decarbonisation, driving energy and resource efficiency. In a virtuous circle, the companies reap opex rewards – and provide greener travel and transport for their customers, treading more lightly on the planet.
3 – Generate additional and diverse revenues
With operating revenues down on pre-pandemic levels, (lack of) demand is driving railway infrastructure managers, train operating companies, and their networks of maintainers, investors, consultants – be they big corporates or micros/ SMEs – to find ways to strengthen and make more resilient income-streams.
Network managers could open up more traffic with targeted investment in more rail infrastructure – new freight terminals, extra passenger stations – all help diversify and broaden the income net. Digital can make a key contribution to reducing disruption, downtime and cost for construction works. Once built, digital not only helps deliver increased capacity (with electronic signalling) but also fundamentally increases uptime, raising infrastructure availability, reducing monitoring and maintenance costs.
With working-from-home an established and sustaining post-Covid scenario, train operating companies are adapting digital ticketing to flex. They’re engaging with less frequent commuters and shifting concepts (and carriages) to less cheek-by-jowl: more leisure; more value-adding services for travellers and premium options for freight.
As innovators and advisors, we have seen the reframing and combining of supply chains to deliver different service models that provide more value than the sum of their parts. Such as new tech partnerships with rail infrastructure managers to automate gauging clearances that facilitate rapid deployment of higher, wider trains and payloads – generating new revenue streams that benefit all stakeholders, with minimal (or even zero) additional capex investment..
It’s easy to oversimplify the world’s railways and how they are reacting to change and disruption, challenged by Covid, climate change and cost squeezes. But the undeniable appeal of fixed infrastructure investment, of the proven physics of the highly efficient low-friction steel-on-steel wheel-rail interface remains strong – and the digital-first railways are full steam ahead..
At Cordel, we are helping our customers to reimagine rail operations and infrastructure maintenance – and to shape a digital-first railway – building network performance, resilience, safety and efficiency, for the benefit of everyone.
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