POLITECNICO DI MILANO
School of Industrial and Information Engineering Master of Science in Management Engineering
Digital Transformation in the Transportation Industry: LATAM Analysis
Master Graduation Thesis by: Hernán Campos ID number: 863002
Supervisor: Prof. Giovanni Miragliotta Co-supervisor: Dr. Elisa Convertini and Dr. Anna Bergamini
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Academic Year: 2017 – 2018 Abstract
The purpose of this thesis is to analyze the transformation in the transportation industry enabled by the development on digital technologies. To understand how this industry is changing, the study will start from a general view, realizing a recap on how technologies advancements have affected our mobility through history until the transportation of today.
Then, the research will also connect the transport to the Industry 4.0, Intelligent Transport
Systems (ITS), Artificial Intelligence (AI), Cloud applications and the definition of future trends in the sector. Furthermore, a focus will be performed on the Latin America region, evaluating the business opportunities and attractiveness for an IT System Integrator Company in the transportation market of the relevant Latin America countries’ such as: Argentina, Brazil,
Chile, Colombia, Mexico, and Peru. This analysis will be sustained by exploring each country in the following aspects: economic and social situation, politic situation, digital situation, future expectations of economy, and a transport system analysis overview.
A deeper case study will be presented on one specific actor of the sector, Lima Metro Line 1
Company, commercially known as CONCAR S.A. Besides the bibliographical research, to support the case study, an interview and questionnaire will be carried out to Mario Bolivar, actual Communication Coordinator of Lima Metro Line 1 Company. Mr. Bolivar will help to identify actual functionalities needed in a transportation company and define future trends regarding IT systems. Finally, the results and the interpretations will be presented on the
Chapter 5, together with future opportunities for transport operators in the sector .
Key Words: Transportation, Digital Technologies, Latin America, Business Opportunities, IT
System. Table of Content
Executive Summary ...... 5 Objectives and Methodologies ...... 6 1. The Transport Industry ...... 10 1.1. Overview Transport Supply Chain ...... 10 1.1.1. Transportation System Description ...... 10 1.1.2. Transportation Modes ...... 11 1.1.2.1. Road Transportation ...... 11 1.1.2.2. Rail Transportation ...... 11 1.1.2.3. Air Transportation ...... 12 1.1.2.4. Water Transportation ...... 13 1.1.3. Comparison between Transportation Modes ...... 15 1.1.4. Transportation main Players ...... 16 1.1.5. Transportation Infrastructure ...... 17 1.1.5.1. Roads Infrastructure ...... 17 1.1.5.2. Railways Infrastructure ...... 19 1.1.5.3. Airport Infrastructure ...... 20 1.1.5.4. Water Ports Infrastructure ...... 21 1.2. Transportation Industry Evolution...... 22 1.2.1. Transportation in the Pre-Industrial Revolution ...... 23 1.2.2. Transportation during the First Industrial Revolution ...... 24 1.2.3. The Emergence of Modern Transportation Systems (19th Century) ...... 25 1.2.4. Transportation System during the Second Industrial Revolution and the Automobile Expansion ...... 26 1.2.5. The Transportation System during the Third Industrial Revolution ...... 28 1.2.6. Industry 4.0 and the Transportation of Today ...... 29 1.3. Trends: The Future of Mobility ...... 31 1.3.1. On-Premises VS Cloud Model Application in the Transportation Industry ...... 31 1.3.1.1. The On-Premises Model ...... 32 1.3.1.2. The Cloud Model ...... 33 1.3.1.3. On Premise VS Cloud Model: main drivers ...... 36 1.3.2. Intelligent Transport System ...... 38 1.3.3. Artificial Intelligence in Transportation ...... 39 2. Market Analysis in LATAM ...... 43 2.1. Introduction to Latin America ...... 43 2.2. Latin America countries’ Analysis and Overview ...... 46 2.2.1. Argentina ...... 46 2.2.2. Brazil ...... 56 2.2.3. Chile ...... 66 2.2.4. Colombia ...... 76 2.2.5. Mexico ...... 84 2.2.6. Peru ...... 94 2.3. Synthesis ...... 104 3. IT System in Transport Industry ...... 110 3.1. Main IT Systems supporting the transport operations processes ...... 110 3.1.1. Asset Management ...... 110 3.1.2. E-governance ...... 111 3.1.3. Freight Transportation Services ...... 111 3.1.4. Passenger Information System ...... 112 3.1.5. Security ...... 112 3.1.6. Automated Fare Collection ...... 113 3.1.7. Traffic and transport management ...... 113 3.2. Description and map of competitors’ offering in Latin America ...... 114 3.2.1. GIRO Inc...... 114 3.2.2. GMV Innovating Solutions ...... 115 3.2.3. INDRA ...... 119 3.2.4. THALES ...... 121 4. Case Study: Lima Metro Line 1 ...... 125 4.1. Description of methodology ...... 125 4.2. Company Overview...... 125 4.3. Innovation Approach ...... 128 4.4. Cloud VS On-Premises Analysis ...... 134 4.5. Functionalities Analysis ...... 135 5. Conclusions ...... 140 5.1. State of the Art in LATAM ...... 140 5.2. Possible opportunities where develop an IT platform for transport operators ...... 142 Annex 145 Bibliography 146
Executive Summary
The movement of people, goods and information have always been fundamental elements of our society. As it will be described on this document, each Industrial Revolution, through history, has been characterized by significant transformations in transport services and by overcoming challenges regarding the capacity to manage, support and expand movements of passengers, freight and underlying information flows. Today, digital transformation has already arrived in the transportation industry. The current Digital Era has brought a variety of digital disruptions putting the power of information closer than ever: in our smartphones, personal computers and other devices. Developments in the field strives to integrate all modes of transportation to provide the experience for passengers of a continuous end-to-end travel. Technology has a major role to play in the transportation, where digital innovation will go further to bring us improvements in main application areas: Asset Management, eGovernance, Freight Transportation Services, Traffic & Transport Management, Passenger Information System, Automated Fare Collection, and Security. Therefore, the aim of this thesis is to analyze how transportation industry has been transformed by digital technologies up to our days, to understand the future trends and to define the opportunities in this sector for a System Integrator provider or Transport Operator Company. The scope will be Latin America (LATAM) region, and the case study will be based on the analysis of one specific actor of the sector, Lima Metro Line 1 Company, commercially known as CONCAR S.A.
The first chapter encompasses a general view of the transport industry and the description of the system to better understand the main elements, and how they interrelate in the transport ecosystem. Further, the chapter includes the definition and comparison between the transportation modes as Road, Rail, Air and Water. To understand the current transport scenario, is also important the revision through history of the main innovations and the transport industry evolution. The chapter concludes with the establishment of main trends, including the description of Cloud Model Application, Intelligent Transport Systems (ITS) and the application of Artificial Intelligence (AI) into the transport industry.
The second chapter consists in a market analysis of the LATAM region. It begins with a general introduction and a description of the actual situation regarding economic, political, and industry fields. The second part of the chapter encompasses the Latin America’s countries Analysis and Overview, which consists on a detailed research of the relevant countries: Argentina, Brazil, Chile, Colombia, Mexico, and Peru. It concludes with a synthesis of the analysis covering: Rail Transportation, Public Transportation System, Logistic Hubs and Port System, Authorities, System Integration, Future Developments and other relevant information.
The third chapter, IT System in the Transport Industry, will cover the description of the main IT Systems supporting the transport operations processes determined by the already mentioned application areas (Asset Management, eGovernance, and others). The second part is about the main competitors of the sector with operations in Latin America, and a research and comparison on their offering services. The forth chapter is dedicated to develop the case study on Lima Metro Line 1 Company. Here is also included the description of the methodology, to better understand the logical steps behind. Finally, the fifth chapter consists on the conclusions, the State of the Art in Latin America Transportation Industry; and, as an output of the analysis on the previous chapters, the definition of possible opportunities for IT Transport Integrators or Operators companies to be implemented in Latin America region. Objectives and Methodologies
The objective of this thesis is primarily to study how the digital innovations have transformed the transportation industry, starting from a general view to a focus on the LATAM region, and in a further step, understand possible business opportunities for transport operators.
Three types of researches have been applied though this thesis to achieve the objective:
. Bibliographical research. Refers to the collection of information for performing the overview of the Transport Supply Chain, though all bibliographical means as: books, scientific informs and reports, online data bases, and newspapers.
. LATAM Market Analysis. Refers to the development of LATAM’s region overview and the digital development analysis of each relevant LATAM country: Argentina, Brazil, Chile, Colombia, Mexico and Peru. The full elaboration of the market analysis can be found in Chapter 2. More details regarding the methodology followed will be explained below.
. Interview and questionnaire. Refers to the collection of information given by Mr. Mario Bolivar, Coordinator of Communication of Lima Metro Line 1 Company. The interview consisted in asking questions referred to the level of digital maturity of the company, the complete list of questions can be found in the Annex 01. Secondly, the questionnaire “IT System Analysis” was completed by Mr. Bolivar to gather more quantitative a qualitative information. Chapter 3: “IT System in Transport Industry”, contains further information about this subject. In a third step, the “Functionalities Analysis” was carried out. This consisted in the questionnaire “AS-IS & DESIRED Scenario” completed- again by Mr. Bolivar- regarding the present and projected state of the following functionalities: eGovernance, Passenger Information System, and Service Planning. The aim was to identify the current positioning of Lima Metro Line 1 Company in terms of mode of deployment of the transportation IT systems, and value the benefits stemming from the implementation of theses advanced IT solutions.
Bringing more specific aspects about the mentioned LATAM Market Analysis, the methodology includes qualitative and quantitative data collection from the different countries of the region. The reference sources for the research of information are mainly academic papers and reports from international organizations, national statistics centers and data published by Governments. The first step was to make the selection of the most representable countries from LATAM geographical area. The ones chosen were: Argentina, Brazil, Chile, Colombia, Mexico, and Peru. The selection of these countries was based on their level of contribution and impact to the whole region. Since, for matter of this case study, the predisposition to digital technologies and the transportation development are critical factors, the selection of the countries also goes by hand with the fact that they share the following characteristics:
. Developed urban transport system where different transport modes are already implemented. For example, metro, sub-urbans and regional trains, trolley buses, rapid buses, car sharing, or bike sharing. . High concentration of population in cities. The countries have at least one city with more than 1 million of inhabitants. . Important future investments on transport infrastructure. This point implicates if the country has on-going or future projects of great importance and high investments. . Political stability and policies which set clear basis and security for local and foreign investors. The second step consisted in making a detail analysis of each selected country. In order to understand the State of the Art of the transport system and how digital technologies can transform this sector in each country. The research and analysis developed in this step followed the next schematic design:
. General information and administrative divisions. Include the geographical location and the internal division of the country. Also, are mentioned important facts as population, language, area (geographic extension), currency, exchange rate, etc.
. Economic and Social Situation. Main economic indicators are included in this section. These are:
- Gross Domestic Product (GDP). Is the aggregate measure of production equal to the sum of the gross values added of all resident and institutional units engaged in production (plus any taxes, and minus any subsidies, on products not included in the value of their outputs). - Logistic Performance Index. Represents qualitative evaluations of a country on the situation of customs, the quality of trade and transport related infrastructure, the competence and quality of logistics services, the ease of arranging competitively priced shipments, the ability to track and trace consignments and the timeliness of shipments related to expected delivery time. - Final Consumption Expenditure. Is the formerly total consumption, calculated as the sum of household final consumption expenditure (private consumption) and general government final consumption expenditure (general government consumption). This estimate includes any statistical discrepancy in the use of resources relative to the supply of resources. - Population in largest cities. Represents the population in urban agglomerations of more than one million is the percentage of a country's population living in metropolitan areas that in 2000 had a population of more than one million people. - Unemployment Rate. Refers to the share of the labor force that is without work but available for and seeking employment. - Inflation (annual variation %). Is measured by the consumer price index reflects the annual percentage change in the cost to the average consumer of acquiring a basket of goods and services that may be fixed or changed at specified intervals, such as yearly.
. Politic Situation. Main indicators regarding governance stability. The range used is from approximately -2,5 (weak) to 2,5 (strong) governance performance. The scores were established by the World Bank. The indicators are: - Political Stability and No Violence. Measures perceptions of the likelihood of political instability and/or politically-motivated violence, including terrorism. - Control of Corruption. Reflects perceptions of the extent to which public power is exercised for private gain, including both petty and grand forms of corruption, as well as "capture" of the state by elites and private interests. - Regulatory Quality. Reflects perceptions of the ability of the government to formulate and implement sound policies and regulations that permit and promote private sector development. - Voice and Accountability. Reflects perceptions of the ability of the government to formulate and implement sound policies and regulations that permit and promote private sector development.
. Digital Situation. Include main indicators referring to the level of digital and telecommunication development and awareness of the country’s population in terms of digital technologies. The scores were established by the World Bank and Statista Inc. The indicators considered are:
- User Smartphone Penetration. Meaning the smartphone user’s penetration as percentage of total global population. - Individuals using the Internet. Individuals who have used the Internet (from any location) in the last 3 months, as percentage of total global population. The Internet can be used via a computer, mobile phone, personal digital assistant, games machine, digital TV etc. - Mobile cellular subscription. These are the subscriptions to a public mobile telephone service that provide access to the Public Switched Telephone Network (PSTN) using cellular technology. The indicator includes (and is split into) the number of post-paid subscriptions, and the number of active prepaid accounts (i.e. that have been used during the last three months). - Investments in telecoms with private participation. Refers to the investment in commitments to infrastructure projects in telecommunications that have reached financial closure and directly or indirectly serve the public. Movable assets and small projects are excluded.
. Future expectations on the economy. This section is about the future growth expectancy of the country. Also include analysis made by The International Monetary Fund, The World Bank, and other pertinent institutions and specialized economists.
. The transport System Analysis. The study of the transport system in each country. The analysis will encompass the explanation of these topics:
- Transport Network Overview. Explained by the description of road, rail, air and sea transportation, and these indicators: I. Global Infrastructure Competitive Investment Index. Ranks countries according to their relative attraction to infrastructure investors in the long run (5+ years). This assessment is based on national statistics and open source data focused on anticipated demand for infrastructure investment, ease of doing business and comparable levels of investment risk. The ranking uses 24 indicators across five categories: economic environment, business environment, country risk, infrastructure, financial environment. Source: Arcadis Design & Consultancy [www.arcadis.com/en]. II. Global Infrastructure Ranking (GCI, 2015-2016). This ranking is built on the basis of following measures: road straightness, road Speed, Quality of road infrastructure, efficiency of ground transportation, railroad density, quality of railroad infrastructure, efficiency of train services, air connectivity, quality of airport infrastructure, efficiency of airport services, liner shipping connectivity, quality of seaport infrastructure, efficiency of seaport services, electrification rate, electric power losses, quality of electricity supply, reliability of water supply, access to improved drinking water, mobile network coverage rate. Source: Innovation Center Iceland [www.nmi.is/english].
- Rail Transport System. Include the description of the best players in the rail transport system for both freight and people: the railway situation, the relevant companies and market size, and the railway Governance. - Public Local Transport System. Include the description of the best players in the Public Local Transport (PLT) system: the PLT situation, the relevant companies and market size, and the PLT Governance. - Logistic Hubs and Ports System. Combine the definition of the main ports and port operators of the country, and their actual situation. The description of the situation includes recent results on revenues and freight capacity management. - New Transport Modes. Include the description of the best players in the new transportation modes for both freight and people. - Transportation Authorities. Consist on the description of the main Authorities regulating the transport ecosystem for both freight and people. - System Integration Industry. This section includes the description of the most relevant players in the system integration industry, which services are focused on the transportation business. - Transport System Development. The section introduces the current projects or future developments directed to improve the transport ecosystem, including relevant information about financing, investors, contract’s structure and status of the project up to date.
Certainly, the methodology followed through the three steps: bibliographical research, LATAM Market Analysis, and the interview and questionnaire represent a logical path to study how the transportation industry have been changed by digital innovations, and understand its connection with major technology disruptions as: Industry 4.0, Intelligent Transport Systems (ITS), Artificial Intelligence (AI), cloud applications. The research and analysis process aim to build a clear scenario to, further on, establish business and investment opportunities in the sector.
1. The Transport Industry
1.1. Overview Transport Supply Chain
Transportation, to the greatest extent, is defined as the movement of people or goods from one location to another. Historically, transportation has been a fundamental activity for the development of civilizations, as it enabled the trade between people and communities. For instance, is possible to observe a strong relation between the evolution of human settlement and the proximity to transport facilities. In the same time, developed transport infrastructure can be related with the high standard of living [1].
1.1.1. Transportation System Description
Concerning the transportation system, there are so many cases how this industry has added strength and efficiency to a country's progress. In urban and rural areas of any country, a good infrastructure connectivity is critical for economic growth. For example, in India, the seventh largest economy with over a billion population, has one of the largest transport sectors. In Seoul, the Seoul Metro System carries almost 7 million passengers per day on its nine lines. Another case is Hong Kong, China, where the MTR (Mass Transit Railways) is vital for the city to function as an economic power. Through its more than 150 stations-system, around 3.4 million passengers are transported every day [2].
Moreover, transportation system can be divided into 3 main important components [3]: . The vehicle or equipment. In a broad sense, the vehicle is what moves objects – as people, animals or any type of good freight – from one point to another. The vehicle consists of a container, where the object is stored, and some type of motive power, which makes possible the movement of it. . The guideway. Represents the path through where the vehicles move along. The guideway consists of links and nodes that together form a network. A terminal is a node where traffic is transferred from one vehicle to another. . The operations plan. Means the set of procedures by which traffic and vehicles are moved over the guideway. The plan can include schedules, timetables, crew assignments, control systems, among others.
Vehicles operating over guideways can be also classified into different modes. The principal and traditional modes are:
. Road. Consists on automobiles and trucks operating on roads and highways. . Rail. These are the locomotives and other types of railroad cars operate on railways. . Air. These are the airplanes that operate in the aerospace. . Water. Any type of ship operating in the water.
In relation with these last modes, is important to introduce two concepts that are related with the integration of the transport system: Multimodality and Intermodality. Both concern the use of 2 or more transportation mode, but the main difference is in the 'packaging' treatment through the chain.
. Multimodality. A system that is multimodal involves the movement of freight from the origin to the destination point by using several modes of transport, where the units are unloaded and redistributed, and then the redistributed goods are transferred to other mode.
. Intermodality. A system that is intermodal indicates that at least two different modes are involved in performing the same door-to-door service, where the units are not unloaded or redistributed while changing to a different transportation mode. This improves the economic performance of the system by using the modes in the most efficient way. The transportation become a single integrated trip, rather than as a series of legs and many individual operations with separate sets of documentation and rates [4].
1.1.2. Transportation Modes
Transport modes are the means by which people accomplish mobility and freight can be moved. The main differences between the transportation modes have to be with through what surface people or freight are been transported. Each mode is characterized by certain technical, operational and commercial specifications. Below, further information is presented [5]:
1.1.2.1. Road Transportation
Through land, there are two major modes that share this resource: roads and railways. Certainly, roads were established first. The rail machinery became available by the 18th century, with the development of the steam locomotive, in the middle of the first industrial revolution.
Current road transportation networks, in fact, have historical considerations. Firsts roads where developed to support non-motorized forms of transportation, such as walking travels, using domestic animals as horses, and, at the end of the 19th century, with the predecessors of the modern bicycle. It was since the beginning of the 20th century, where diesel motorization boost and shaped the development of roads. The actual roads tend to follow the structure established by the ancient ways. This is the case for the modern European road network that follows the structure established by the Roman’s lanes network centuries before.
Among other transportation modes, road infrastructures require large spaces to develop a network. Also, this mode has the lowest level of physical constraints, as in general they can be easily built. However, depending in the circumstances of the environment, geographical constraints are significant in road construction, creating substantial additional costs to overcome the restrictions, such as mountains, rivers, craggy terrain, and even extreme weather conditions. Road transportation has high flexibility in term of operational performance as vehicles can be use here for a variety of purposes.
1.1.2.2. Rail Transportation
Railways are composed by tracks made of steel through which heavy wheeled vehicles are attached. In contrast to road mode, the rail mode has medium level of physical constrains. These limitations are linked to the fact that locomotives are heavy and high-dimension engines, requiring land and space specific characteristics, and the necessity of low inclination to develop a railway system; particularly for freight transportation purpose. The rail mode offers the highest loading capacity by land transportation. Nonetheless, gauges, which are the distances between the lines of a railway or between the wheels of a train, can vary around the world. This is an extra constrain for the integration of rail systems worldwide. Traditionally, the freight industry was mostly linked with rail transport systems, but this scenario is now transforming as the rail-passenger industry is developing more technologies and services that make this mode competitive against other more popular modes.
The recent tendencies in the freight transportation involved: Containerization and Double-stack containerization. Containerization is the transportation of freight in containers with standardized handling equipment. No matter the type of freight inside the containers, the load can be interchanged between ships, trains, and even trucks. This solution has improved the flexibility of rail transportation by linking it with road and maritime modes. Double-stack containerization is a form of freight transportation where the containers are stacked one on top of another on railroad cars. This allows the full saturation of the container in term of both space and weight. Usually train wagons don’t carry more than one standard 40-foot (12.2 m) container on top of another because of limited vertical clearance, although in most cases they can carry the weight of two. This solution was introduced in North America, and now is used also in China, Australia, and Saudi Arabia [6].
Most modern technological developments in the rail for passengers industry involved high speed trains, such as the Shanghai Maglev (maximum operational speed of 430km/h), the Harmony CRH 380A (maximum operational speed of 380kmph) and the AGV Italo (maximum operational speed of 360kmph) [6]. Main characteristics of these modern trains are [7]:
. Comfort. Inside trains for passenger’s transport purpose there are a variety of spaces to fulfill the demands of different markets. Some train designs include private lounges or conference rooms, as well as special play areas for kids. Other upgrades can be found as first-class wagons, high speed internet connection, holders for bicycles, café and restaurant services, among others. . Level boarding. Meaning that the floor of the passenger car is level with the station platform. This allow that the station stops are faster, easier and safer. Also, it helps passengers with limited mobility and those pulling luggage by removing the need to climb stairs. . Unified wagons (trainsets). Traditionally, trains are made by individual coaches that are coupled together, so walking between these wagons can be annoying for passengers, or even dangerous. Modern trains are built with unified wagons, keeping all together in a unit trainset. . Lighter trains. For years, regulations have required that passenger’s trains must be very heavy for safety reasons. Modern high-performance trains are lighter without sacrificing strength or safety.
1.1.2.3. Air Transportation
Air transportation consist in the travel of airplanes from one airport or airfield to another. As there is no strict roads or railways, the routes are practically unlimited. Although, high air-traffic can be present in certain areas such as inside North America and Europe.
Some air transportation constraints depend on physical characteristics of the airport or airfield (for instance a commercial plane needs about 3,300 meters of runway for landing and take-off), weather conditions and visibility. Most air activities are related to the tourism sector, providing long-distance mobility to the passengers. In other hand, air transportation also serves a specific sector, as recently this mode is being use for high-value freight transportation, playing an important role in global logistics.
During 2010, around 2.6 billion passengers travelled by air transportation mode. Analyzing this activity, a large share of air transit, in terms of passenger-km., occurred mainly between three regions: North America (19%), Europe (13%) and China (7%) [8]. In this sense, is relevant to point that most important international routes link the most economically active regions of the world:
. North Atlantic route. Represents the most intensively used air route in the world with 8.7% of the passenger-km. . Trans-Pacific route. Accounts for 5% of the global traffic. The strong growth rates of the Pacific-Asian economies have generated a stronger growth of air transportation in that region. The Pacific-Asian airspace include countries as Japan, South Korea, Singapore, China, Thailand, Vietnam, Indonesia and Philippines. . Europe - Far East route. Accounts for 5.4% of the global traffic. . Middle East route. Recently, there is an increasing air-traffic between economics hubs such us Dubai, Abu Dhabi, and Doha; with Southeast Asia, South Asia and Europe region.
The following figure shows the major air-traffic flows between Regions worldwide, detailing the percentage of activities during 2010, in % of passenger-kilometers.
Figure 1 Major air-traffic flows between Regions worldwide 2010. Source: IATA, World Air Transport Statistics
1.1.2.4. Water Transportation
Water transportation is the movement of freight or passengers through or across bodies of water. This transport can involve ships, ferries, cruise ships, submarines and other water crafts that travel through oceans, lakes, rivers and other waterways [9].
The United Nations Conference on Trade and Development (UNCTAD) indicates that maritime transportation accounts for over 80% of global merchandise trade in volume and more than 67% of its value. On 2015, this maritime trade was represented by 1687 million tons carried in around 177.6 million containers and covering 998 billion ton-miles. The nature of water transport and its economies of scale make it the most energy efficient mode. This mode uses approximately 3% to 5% of all the energy consumed by transport activities. Therefore, this mode is a key in global transportation, as it provides access to intercontinental markets and support operations and supply chains of multinational companies [10].
It is important to remark about the fluvial transportation, another type of transport by water means. Even if this sub-mode is slower and less flexible than maritime, it also offers a high capacity and a continuous flow. In fluvial transportation, ports are less relevant but, because of the expansion of containerization, the fluvial hub-centers have recently experience a growing integration with maritime and road-rail transportation [8].
Because of the physical properties of the water, characterized by resilience and minimal friction, the maritime and fluvial transportation are the most effective mode to move large quantities of freight over large distances. The maritime routes can be mapped out through oceans, coasts, seas, lakes, rivers and channels. These routes are well defined and the circulation is under monitoring and control by Governments supported by international conventions.
The next illustration shows the connectivity between countries through maritime transportation, based on the liner shipping connectivity index, elaborated by the UNCTAD on 2017.
Figure 2 Density map of container ship movements. Source: The Geography of Transport Systems (2017).
Inside Latin America, Panama is the best-connected country of the region, pulled by the advantage of having the Panama Canal, which has encouraged the establishment of trans-shipment ports. In Africa, the best-connected countries are Egypt, Morocco and South Africa. On the Arabian Peninsula, the United Arab Emirates, with its hub port in Dubai, has maintained the highest liner shipping connectivity index. In South-East Asia, Singapore and Malaysia are largely served by the same lines in their Asia–Europe services. In Eastern Asia, China boasts the highest liner shipping connectivity index, as its ports are the world’s major loading locations.
1.1.3. Comparison between Transportation Modes
In this section, the key advantages and disadvantages per transportation mode will be described [11].
Transport Advantages Disadvantages Modes Cost effectiveness. More frequent accidents and Quick and scheduled delivery. breakdowns. Local, over border, long or short haul Less suitable for long distances and deliveries. Including to rural areas. bulky goods. Flexible service. Maintenance of roads are critical due Road Lower packing and handling related to their constant usage. Transportation costs, compared to other modes. Seasonal Nature. During rainy or flood Easy track and trace of freight and season, roads become unfit and unsafe trucks. for use. Complete door-to-door service. More Limited and slow speed comparing to economical mode of transport. other modes. Large investment of capital. Higher cost of construction, maintenance and Reliable transit times and schedules. operation expenses compared to other Railroads are the most efficient form modes of transport. of land transportation. One train can Lack of Flexibility, in term of routes and haul the equivalent of over 400 trucks. Rail timing adjustments. Over long distances, fast and cost transportation Lack of direct Door to Door Service. effective deliveries. Unsuitable for Short Distance and Small Traditionally, strong safety record. Loads. Collaborate with reduction of road Under-utilized capacity. It should run congestion. on full load for its ideal and economic operation. High operational costs. Quickest transport mode. Large investment of capital. Air Less handling of freight. Limited carrying capacity. Not suitable transportation Reliable arrival and departures. for bulky or cheap goods. Highest level of security for the freight. Unreliable due to the great impact of weather conditions. Suitable for wide range of products with long lead times. Large volumes. A single, container ship Slow Speed. can carry more than 20,000 TEU. Limited operation. Only available Water Most environmental friendly among through deep canals. Transportation all modes of transport. Seasonal Nature, as very low Economical. Liner shipping is the most temperatures can freeze water ways. efficient mode of transport for goods. Extensive coverage around the world. Table 1: Advantages and Disadvantages of Transportation modes To sum up, the following table resume the best qualities of each transport mode.
Intermodal Mode Speed Accessibility Cost Capacity Capability
Truck Moderate High Moderate Low Very High Railroad Slow Moderate Low Moderate Very High Air Fast Low Very High Very Low Moderate Water Very Slow Moderate Very Low Very High Very High
Table 2: Comparison between Transportation Modes
1.1.4. Transportation main Players
Transportation is a very wide industry, which includes a wide variety of players as bus, metro, ferry, car sharing operators, the government, and integrator system operators, among others. These actors make possible the daily transportation of people and freight to their destination, by using different kind of means as land, sea, or air, from one point to another.
This section will describe the main players that perform activities through the transportation supply chain, considering all transport means.
Player Name Description
Represent the authorities in related with transportation and mobility. Between their main responsibilities are: formulating national development planning and budgeting and implementing Governance transportation policies and programs. In this category we can find public institutions as Transport, Communication or National Development Planning Ministries; and civil institutions which work under these ministries.
Digital Service Company that manages digital bases for the information interchange Provider on the transport supply chain. Company that offers a computerized system with diverse applications connected with vehicle transportation. Provide real-time information through the use of advanced sensors, smartphones and other equipment installed across the roadways or railways. Intelligent Transport System (ITS) is being used for capturing real time navigation, Intelligent Transport lane disciple, traffic updates and predicting travel time. The objective System (ITS) Provider of ITS is to improve effectiveness, efficiency and safety in transportation system. This sector is growing fast because of the rising concern for traffic congestion, the need for road and rail safety improvements and the shift of freight industry from unorganized to an organized one [12]. Is the private or public organization whose core business is to provide Operator Company transport services either for people or freight by any mean: road, rail, air, water or multimodal.
Is responsible for establishing and maintaining the infrastructure and its essential operation components, including the management of Infrastructure infrastructure control, processes, human resources, equipment and Manager related safety systems. This player can be categorized in: Road or Rail Infrastructure Manager, Maritime Stations, and Airports. The company providing the ordinary and extraordinary maintenance, Infrastructure review and repairment works necessary in the transport Maintenance infrastructure, for example in the roads or railways. Must be officially Manager registered at Maintainers Qualified List. Company owner of vehicles that will perform the action. The vehicle Vehicles owner owner can be also an Operator Company or Infrastructure manager.
Company that performs local public transport services on the basis of Public Transport specific service contracts. They can provide urban, suburban or Operator tourism-related transport.
Table 3: The main players of the Transportation Supply Chain
1.1.5. Transportation Infrastructure
In a wide sense, the transport infrastructure refers to the framework that supports a transport system. This includes roads, railways, airports and ports. The national and local government are responsible for the development of the transport infrastructure.
All mobility flows, with the exception of individual vehicular and pedestrian travels, involve a transportation between terminals and so, the indispensable use and need of infrastructure. All transport modes require management and distribution of their traffic, for both passengers and freight. For example, people must go to a bus station to take a bus or go to airports first to take a flight and reach their final destinations. Transportation infrastructure is, therefore, an essential element in the transportation supply chain, as it is the link between the users and the delivery of the mobility service. Is important to point a basic distinction between passenger and freight transportation, because they receive different treatment in order to transfer each type, specific equipment and infrastructures are required. In the next sections, the most important aspects of the transportation infrastructure will be described, going into detail inside each typology: roads, railways, airport and ports infrastructure.
1.1.5.1. Roads Infrastructure
Principally, the road infrastructure can be considered as the road facilities and equipment, which includes the roadways network, parking spaces, stopping places, draining system, bridges and footpaths. Nowadays, this is the dominant land transport system where freight and passenger vehicles share the roads. A tendency in the sector is determined by the growth of the freight traffic which increase the road congestion. Some solutions have been taken by many cities like restrictions on the truck dimensions and weights in certain parts of cities or limiting truck access to non-daylight hours.
The capacity of the road infrastructure is determined by the length of its roads network. This capacity represents the maximum number of vehicles that can pass through a road section per hour, and is determined by its width, number of lanes and speed limit. If the traffic demand is higher than the road capacity, congestion will arise. When congestion is present, the road network cannot longer be effectively use for vehicles transport. Thus, is important to prevent or reduce congestion with an accurate design of the road network, together with a reliable traffic management measurement.
About the cost structure. The infrastructures are moderately expensive to provide. The cost will vary depending on the magnitude of the infrastructure that can go, for example, from a simple gravel road to a multi-lane expressway. About the provision of the infrastructure, most roads are provided as a public good by Governments. Although, different Public-Private partnerships are very common to carry out infrastructure projects. In this way, the capital costs are shared, and the State do not fall into heavy disbursement of money.
Why is road infrastructure important? A developed road infrastructure can have a major impact on a country's economic position, as it has close relation with productivity improvements and better economic indicators. Establishing a stable road network has many beneficial effects, some of these are:
. Creation of connections between businesses and markets. . Inside the supply chain, it facilitates the movement of raw materials to the plant, as well as the transportation of finished products to distributors or retailers. . Allows mobility, making possible to move large volumes of people to their working centers, educational institutions, or any place where a person can buy something. Therefore, road infrastructure affects the flexibility and mobility of the workforce, which is reflected in the employment level. . Positive impact on the development of tourism, influence on foreign investments and regional development.
How digital technologies are transforming the road infrastructure? Some recent digital tendencies that are transforming the urban mobility are the autonomous-driving vehicles, use of electric vehicles, ride-hailing services, ride-sharing and other technologies that are transforming urban mobility. The Autonomous-Vehicles (AV) is a still under development technology but it promised to solve road-safety concerns, reduce the overall costs of transportation, and expand access to urban mobility. Some big corporations investing into this sector are Uber, developing a taxi self-driving service; Google Inc., with its self-driving car project called Waymo; Apple’s iCar project, an electric and self-drive car. Ride-hailing is the service where a person who “hails” or contact a car driver and is immediately picked up and driven to their destination for a time and distance-based fee. A popular example of this service is Uber, Lyft, Ola Cabs, Easy Taxi and Grab Taxi. Ride-sharing service is slightly different from ride-hailing. Ride-sharing is the sharing of vehicles by passengers in order to reduce vehicle transportation costs, traffic congestion and automobile emissions. Some actual services are Carpooling, BlaBlaCar, BlancRide, Relay Rides and Car2Go [14].
Figure 3: Google's autonomous vehicle test. Figure 4: Uber's self-driving prototype. Source: Waymo. Source: Wikipedia
1.1.5.2. Railways Infrastructure
Railway system infrastructure was mostly developed during the second period of the industrial revolution, during the nineteenth century, and it was responsible for enabling a more flexible in- land transportation system. Most infrastructure is now surrounded by urban development.
Railway infrastructure includes railway lines and the structures necessary for the operation, as the buildings, vehicles and equipment, and the corresponding land where railway lines are located. The railway line is defined as a railroad that has a start and an end, it comprises the line sections, buildings, structures and equipment designed to manage rail traffic.
Comparing with other modes, the railway infrastructure is not as space-extensive as airports or ports. Because this reason, it has less site constraints and limitations when is built. Individually, rail terminals may not be as extensive as airports or ports, but cumulatively the area that cover the whole rail system can exceed those of the other modes. For example, in countries with large operating route length as: United States (250’000 km), China (100‘000 km) or Russia (85’500 km) [13].
Usually, railway operational building centers are in the heart of metropolitan areas. The central stations are magnificent buildings that reflects the importance represented by the railway in the latest nineteenth and early twentieth centuries. Examples of this are The Grand Central Terminal in New York (operating since 1871, and consist in 44 platforms), the Blackfriars Station in London (operating since 1886 and with an actual capacity of 44’000 passengers per day), or Figure 5 Peak hour situation in Chhatrapati Shivaji Central the Chhatrapati Shivaji Station, in Mumbai Station - Mumbai. (inaugurated on 1888 and protected by UNESCO, is the busiest station in India) [14].
In the other hand, railway infrastructure for freight-transportation purpose are not typically centrally located. This is because they required large space for multimodal activities and the use of big equipment for the handling tasks. These freight operational centers are usually located in important industrial zones, as they tend to attract manufacturing activities. The common configuration requires a site with at least 100 hectares, 3 kilometers of length, good access to the roadway system and a certain degree of automation of the handling system [8].
1.1.5.3. Airport Infrastructure
Between the years 1940 and 1950 the world experimented the beginning of airport infrastructure expansion. In those years, the development of global air and telecommunication networks were possible in coincidence with the globalization of mayor economic activities. The development of new technologies boosted the aeronautic industry.
Regardless the period of time, airport infrastructure has always required very large sites to operate. For instance, a basic infrastructure need space for runways, terminal buildings, maintenance hangars and parking. Is possible to find variations depending in the scale of the airports, usually international airports are much bigger than local airports or just airfields. The minimum sizes for an airport is of 500 hectares, which represents enormous compromise of urban land. The requirement of the vast land is one of the reasons why airports are mostly located at the periphery of urban areas, where is more feasible to find sufficient quantities of land available [8].
Air transport infrastructure consist in all the facilities and managerial oversight required to provide an efficient and on-time air transportation of people and freight [15]. The infrastructure can be organized as:
. Airside Infrastructure. Consists in the airfield, gates, air bridges, all facilities associated with the movement of aircraft, and all facilities considered beyond the passenger security areas (runways, taxiways, aprons, etc.). . Landside Infrastructure. Consists on the facilities related with the movement of passengers and baggage to or from airplane. This type of infrastructure includes also all airport’s facilities dedicated to serve passengers inside the terminal areas, for example passenger services, food and beverage concessions, duty free, car parking, etc. . Security and safety infrastructure. These are the facilities associated with the existence and activity on a continuing basis of a Police Department, Security, Customs and Immigration, fire and rescue services. To assure that the infrastructure and services meet international best-practice standards, they are subject to be certified. . Surface access infrastructure. These are the facilities which provides the road and rail services inside the airports. . Air navigation services (ANS). Air Navigation covers all activities necessary to manage the air traffic for a particular country's airspace. ANS include: air traffic control services, on-route navigational services, flight information services, and all necessary support- related services.
1.1.5.4. Water Ports Infrastructure
The principal purpose of ports is to serve ships, making possible the access to navigable water. Over time, developments and innovations in ships designs and handling systems, have created new port’s infrastructure requirements. In the early 50’s the specialization in vessels started, in the post-World War II period, boosting the development of bulk carriers. For instance, in 1947 the world’s largest oil tanker had the capacity of only 27’000 Deadweight Tonnage (DWT), but during the 70s this capacity exceeds the 500’000 DWT. Therefore, the growing vessels specialization resulted in new site requirements, the need for dock large space and greater depths of water in ports [8].
The developments and evolution in port infrastructure, in time and space, is explained by the Anyport Model [16]. It consists in a three stages-model that demonstrate how facilities in a typical port develops, starting from the initial port site with small lateral quays adjacent to town center. The three phases are:
. Setting. The setting of a port is strongly dependent on geographical considerations. A standard development starts from the original port, which is most of the times a fishing port with trading and shipbuilding activities and several docks. . Expansion. As it was mentioned, the post-World War II boosted the changes in port infrastructure. In this phase, docks are expanded and piers are constructed to handle the growing amounts of freight and passengers, and the larger ships that arrives. Later on, port terminals will be integrated with rail lines, enabling easier access and higher transportation level, consistent with the growth in maritime traffic. . Specialization. After expansion, the construction of specialized piers and enlargement of warehouses are needed to handle particular freight. Most common high-volume freight are containers, ores, grain, petroleum and coal.
The following figure represents the evolution of port’s infrastructure based on the Anyport Model.
Figure 6 Anyport Model phases. Source: OECD Seminar, 2011.
On the other hand, it is possible to make a classification of port’s infrastructure based on their different features and criteria to meet their business needs. The types of ports are [17]:
. Deepwater Seaport. All ports located in the sea with distance from the water surface to the sea floor exceeds 13.72-meter-deep, in the entrance channel and in the terminal area. . River Port. All ports that are located in one of the banks of a river, regardless its depth, will be considered as a river’s platform. . Harbor. This are facilities which, although are not strictly considered port, they are used for loading and unloading goods in an outside-sheltered-water area. The overcoat is performed by means of a reservoir or dam constructed for this purpose. . Jetty, pier or wharf. In this category are those facilities that have no more than a simple dock or pier. It can be sheltered or exposed to open to waters. . Dedicated Terminal Port. This is the subdivision for simple terminals whose material loaded or unloaded is always the same. Hence, the facilities are adapted only to the type of goods they manage. The most typical dedicated terminal port are the ones that moves solid bulk of soybeans, coal and other minerals. . Off-shore Terminal Port. These are facilities which are entirely set in the sea, meaning that these are completely artificial terminals. They are exclusively use for, first, the deconsolidation of inbound cargo and a following shipment to its hinterland; and second, the consolidation of load coming from the same channel. . Canal. These are port facilities, not strictly river category, with inland waterways that can have many kilometers. The main purpose is to communicate with the sea or ocean by a single point. This classification does not cover artificially-constructed installations or facilities whose activity is mere passage of ships – as the Panama Canal- are not included in this category.
1.2. Transportation Industry Evolution
Transportation has been always one of the most important human activities. It is an indispensable element of the economy of a country. Historically, transportation modes have played different roles; from the beginning with the rise of civilization (as Egypt, Rome or China), to the development of modern societies.
The industry of transportation has changed a lot since the last 200 years. To describe the evolution of this industry, is definitively important to make a parallel distinguish with the Four Industrial Revolutions, highlighting how these four waves of technological innovation and economic development had impacted on the transformation of the transportation industry along human history. Therefore, the evolution presented will focus in a description before the First Industrial Revolution; and then, during the First Industrial Revolution (Mechanization), the Second Industrial Revolution (Mass Production) with a brief broadening to the Automobile Expansion Era, the Third Industrial Revolution (Electronics, Automation and Information Technologies) and the Fourth Industrial Revolution (Robotization and Cyber-Physical Systems).
Figure 7: The Four Industrial Revolutions. Source: The Geography of Transport Systems (2017).
1.2.1. Transportation in the Pre-Industrial Revolution
Before the major transformations pushed by the industrial revolution at the end of the 1800’s century, no forms of motorized transportation existed. Transport technology was mainly limited to human-forced or animal-labor transportation, and the use of wind for maritime transport.
Some referent characteristics of this early period are that [18]: . The transported quantities were very limited. . Low speed for the transportation of people and freight. The average speed by horse was between 8 to 15 km/hour and maritime speeds were barely above these numbers. . Waterways were the most efficient transport systems available. . The cities next to rivers were able to trade over longer distances, although with local scope. This is related to the fact that the first civilizations emerged along river systems for agricultural but also for trading purposes (Tigris–Euphrates, Nile, Indus, Ganges, Huang He). . Because the limited transport modes, most rural areas centered around a village and cities rarely exceeded a 5 km diameter. . International trade did exist, but traded commodities were high-value (luxury) goods such as spices, silk, wine and perfume.
In this era, the most developments happened in the maritime transportation, which was the most convenient way to move freight and passengers around. Great commercial empires were established with maritime transportation. Initially, the ships were propelled by rowers. Later, the sails where added as a complementary form of propulsion. Therefore, the “highways” of that medieval time was the extensive maritime trade network centered along the navigable rivers, canals, and coastal waters of Europe and China.
By the 1400’s century galleys were replaced by caravel sailing-ships that were faster and required smaller crews. The year 1431 marked the beginning of European expansion with the discovery by the Portuguese of the North Atlantic circular wind pattern. By the late 1800’s century, canal systems started to emerge in Europe, initially in the Netherlands and England. They permitted the beginning of large movements of bulk freight inland and expanded regional trade. Therefore, maritime and fluvial transportation were consequently the dominant transport modes of the pre- industrial era. 1.2.2. Transportation during the First Industrial Revolution
Figure 8: The Colonial trade pattern in the North Atlantic, 1800's century. Source: The Geography of Transport Systems (2017).
The first industrial revolution in the late 18th and early 19th century focused on the advantages of mechanization characterized by the substitution of animal or human labor with mechanical labor. The main consequence of the industrial revolution was a specialization of transportation services and the establishment of large distribution networks of raw materials and energy.
The Industrial Revolution offered the possibility to transport people, raw materials and finished goods over long distances. There were three main modes of transportation that highly developed during this period: maritime, roads, and railways. Along these modes the massive changes occurred, transforming the transportation system.
This era was characterized by the development of the steam engine: an external combustion engine that converted thermal energy into mechanical energy. This invention made possible the expansion for maritime and railway transport systems. In 1769, Nicolas-Joseph Cugnot, a French engineer, built the first self-propelled steam vehicle. While by 1790, the first mechanically propelled maritime vehicle was Figure 9: Representation of the first steam boat invented by John Fitch. tested by John Fitch, an American Source: Boating World. inventor, as a mode of fluvial transportation. Further inventions and developments made the maritime mode the cheapest way to transport high mount of people and heavy products (such as coal and iron) for long distances [20].
Regarding the road transportation, during the early industrial revolution, roads were commonly unpaved and could not be used to effectively carry heavy loads. Although, some improvements were made on road transport systems in the early 17th century, such as: . The Turnpike Trusts in Britain, in 1706. This were control-access gates to the road with the power to collect road tolls for building and maintaining the principal roads in Britain. . The expansion of the stagecoaches. This system was based on having fresh horses available along a route. In the 1750’s, the initial coach services had speeds of about 8 kilometers per hour. Later, by the 1820’s, the turnpikes greatly improved land transportation but roads were not profitable enough to move heavy freight, it was mainly for compact and valuable goods.
Railroads represented a land transport system that could cover long distances and at the same time could carry heavy loads. The steam-railway technology appeared in 1814 to initially transport coal. In 1830, the first commercial rail line linked Manchester to Liverpool covering a distance of 65 km. This was a significant speed improvement in the transport sector, as the first rail network could ran between 30 and 50 kilometers per hour and it was three times faster than stagecoach service [18].
Certainly, the progressive improvements of steam engine technology allowed longer and safer trips. The steam ships became the dominant mode of maritime transportation by the late 19th century.
1.2.3. The Emergence of Modern Transportation Systems (19th Century)
This period was characterized by the fast growth of the urban population. This was a favored condition for the construction of the firsts public urban transport systems. During the 19th century, the urban transport system was considerably transformed by the use of electric energy, enabling the installation of trams and tramways, and the constructions of the first underground metro systems (London, 1863). In other hand, the bicycle made it first appearance in Paris (1867), initially for rich people use as a form of leisure, but later on adopted by the working class as a mode of transportation.
Another characteristic of the period was the developments in the railway transport systems, which became the dominant land transport mode for passengers and freight. Comparing to the earlier era, the performance of locomotives was increased: . Higher speed was achieved, above the 100 km/h. . Specialization of rail services. The trains now could be entirely devoted to passengers or freight.
The developments in telecommunications were also significant and can be considered as an important component of the transport industry transformation of the era. The appearance of the telegraph in 1840’s started a new era in the transmission of information.
Another relevant change came during the 1870’s, with the improvements in the engine- propulsion technology of the steam ship, gradually shifting from coal to oil powered. Although oil has been use already for centuries due to its combustion properties, the commercial use of it was applied in the late 19th century. Inventors started to experiment with engines that could use the cheaper new fuel. The oil usage increased the speed and the capacity of maritime transport. It also permitted to reduce the energy consumption of ships by 90% relatively to coal. With this energy transformation, came also the increase in the ship’s size, and start of massive investments in port infrastructures such as piers and docks coherent with the ship’s bigger size. The general dimension of ships expanded from the largest tonnage of 3,800 tons (cargo space) in 1871, to 47,000 tons in 1914. Therefore, maritime freight transport rates dropped by 70% between 1840 and 1910. In this period the Suez (1869) and the Panama (1914) canals were constructed, improving the accessibility for global maritime transportation and reducing intercontinental distances.
1.2.4. Transportation System during the Second Industrial Revolution and the Automobile Expansion
The Second Industrial Revolution, during the late 19th and early 20th century, was based on the application of mass production along assembly lines, enabling this way a more advanced alignment between labor force and machines and a higher manufacturing performance.
The background of this era was the invention of the internal combustion engine in 1889 by the German inventor Gottlieb Daimler (1889), which was a modified version of the diesel engine. Compared with the predecessor steam engines, internal combustion engines have a much higher fuel efficiency. The internal combustion engine allowed the development and popularization of a variety of transportation modes, such as automobiles, buses and trucks; characterized by flexibility, inexpensive and the possibility of door to door service. The mass production of vehicles and the consequence popularity of affordable automobiles transformed substantially the transportation industry. It was on 1913 when the American Henry Ford began the manufacturing of the Model-T car, by applying the assembly line production. From 1913 to 1927, more than 15 million of these cars were built thanks to economies of scale achieved by the assembly line production. In the 1950’s the automobile became a mass consumption product. In this same period the Figure 10: Henry Ford's Model T car. Source: Ford Company. major highway systems, such as the American Interstate, were built. This mode of transportation changed drastically the lifestyle of societies and drive the architecture of cities. The main cities were expanded to areas larger than 100 km of diameter.
In the maritime transport industry, economies of scale were also achieved. The capacity of ships was increased and costs reduced. The industry was pulled by the introduction of containerization during the late 1950’s. The use of pallets also contributed to accomplish economies of scale, especially after the invention of the forklift in 1937. Pallets allowed a better handling and storage of the freight. Previously, around 1930 about three days were required to unload a rail-boxcar containing 13000 cases of goods not palletized; and later with the introduction of pallets and forklifts, a similar task could be done in about four hours.
The air transportation industry also had significant improvements in this era. The World War II post-period brought improvements in the aircrafts range, capacity and speed. Travelling by airplane was getting more accessible and less expensive. During the year 1952 the commercial Figure 11: Boeing 707, the first commercial jet plane. Source: Boeing Aerospace Company. jet services started, thanks to advancements in the jet engines technology. Some years after, in 1958, the Boeing 707 was introduced to the market as the first commercial jet plane, and it transformed the international transportation of passengers. This milestone represented the end of transoceanic ship trips of people.
1.2.5. The Transportation System during the Third Industrial Revolution
The Third Industrial Revolution started during the late 20th century. Between its referent characteristics stands the massive development in Information Technologies (IT) and Telecommunications, globalization and trade, and a higher efficiency of distribution systems by the application of Supply Chain [20].
A new information highway network was built, as the old transoceanic copper wires were gradually being replaced by fiber optic technology. This fact highly increased the capacity to transmit information between countries and allowed the development of the internet and a variety of new technologies. Furthermore, to support the growing transmission of information, a network of satellite communication was expanded. The expansion of IT, compared to the advancements in mechanized inventions, dramatically improved transportation systems characteristics, in term of capacity, speed, energy efficiency, flexibility, adaptability, geographical coverage, and between others.
Between the most relevant technologies that surged during the modern era of transportation is possible to identify:
. Automated Transport Systems. This technology involves the complete or partial automation control of the vehicles to improve the speed, efficiency, safety and precision of movements. These systems involve the improvement of existing technologies such as automated highway systems or automation of terminals, or the creation of new services as: on demand car services, driverless vehicles transport passenger service, self-driving trucks, and automatic operation systems. The chapter 1.3.2. Intelligent Transport System will present further information regarding these technologies.
. The Maglev System. This consists in a magnetic levitation system, having the advantage of no friction with its support and no moving parts. With this technology, trains are able to reach operational speeds higher than 600 km per hour. The invention of Maglev systems had improved the existing technology of high-speed train networks which are limited to 300 km per hour. The first commercial maglev system opened in Shanghai in 2003 operating at a speed of about 440 km per hour.
. Renewable Energy Technology. Diesel and gasoline are still the main energy sources used in urban transportation, but alternative energy sources have been introduced as the consumption of fossil fuels accounts for emissions of greenhouse gases, climate change, and air pollution. The alternatives include nuclear energy, solar power, electricity (used in hybrid, electric, and fuel-cell vehicles), biofuels, and gaseous fuels from other sources (like hydrogen, natural gas, or liquefied petroleum gas (LPG), between others). From theses arising technologies, two promising applications in urban mobility are the electric vehicles and fuel cell vehicles (FCVs). EVs use electricity directly to charge their batteries, and FCVs are powered by hydrogen, which is produced using electricity; both remark the direction of zero-emission transportation [21].
1.2.6. Industry 4.0 and the Transportation of Today
The Fourth Industrial Revolution or also known as Industry 4.0, is growing out from the Third Industrial Revolution, quite closely but is still considered a new era because of the exponentially growth of its developments and disruptiveness technologies.
The McKinsey Global Institute recognize the Industry 4.0 as the age of cyber-physical systems, integrating robotization, computer technologies, networking and physical processes [22]. The people now have the possibility to have global connectivity in their hands through mobile devices, with huge processing power, storage data capacity, and access to knowledge. Industry 4.0 bring with it emerging technology breakthroughs such as Artificial Intelligence (AI), robotics, the Internet of Things (IoT), autonomous vehicles, 3-D printing, nanotechnology, biotechnology, materials science, energy storage, and quantum computing. All these applications continuously redefined what we understand as transportation systems and urban mobility.
How disruptiveness technologies are transforming the Transportation industry? For Deloitte Consultancy Company, the influence of digital technologies is changing the consumers and setting expectations that will shape demand for transport services. Industry 4.0, the Digital Age, is bringing with it new business models, in which transportation operators are clearly adapting, transforming the use of information, payments methods, integration and automation. All these changes are represented by five disruptive trends that define the actual transformation of the transportation industry: User-centered, Automation and Safety, Integrated and Intelligent, Pricing and Payments, and Public and Private Innovation [23].
Figure 12: Transportation Industry of Today. Source: Deloitte (2015).
. User Centered. Public transport is becoming more personal. This transformation gives the passengers higher level of control, and access to information and transport services. For instance, the smartphone has brought access to more travel options and real-time status information. From the transport operator’s side, the approach changes to operations and planning based on user’s choices, priorities, data flows and dynamic response to disruption. Nowadays, an effective transport system offers to the passengers the ability to decide from different options, therefore, adapting to meet demand rather than imposing a routine or trying to modify passenger’s behavior.
. Automation and Safety. Automation, safety and transportation interact closely. Automation means to give the ability for transport systems to continuously learn, take decisions in real time based on big data, predict different scenarios and anticipate decisions. Each time a higher degree of automation is been applying as human error is the most considerable cause of accidents and death in every mode transport system. Many advances in technology have been applied to increase safety, especially in signaling systems, and automotive applications.
. Integrated and Intelligent. For transport operator’s integration is critical. The interconnection of technology and data allows to create intelligent systems that can respond in real time to passenger’s demand, measure performances, monitor the state of physical assets, and perform predictions to avoid disruption in the service.
. Pricing and Payments. In pricing, flat-rate transport pricing is obsolete and is not effective to predict fluctuations in demand. The fact that the operator is increasing the information exchange with the passengers is enabling more intelligent approaches to dynamic pricing to optimize capacity of the transport network. The innovation is to charge passengers based on a combination of different factors, as their trip distance, time of day, class of travel, special discounts, previous travel patterns and even if it is it’s birthday. In payment methods, the trend is the digitization of payments and the adoption of e-tickets. As more people become more connected through their smartphones, methods of payment must keep the pace. With the development of more applications for electronic payments and peer-to-peer payments as Apple Pay, LoopPay, Google Wallet, Square Cash, Dwolla or even Facebook Messenger; it is becoming increasingly more important for transport operators to offer a platform that allows different methods of payment, besides cash.
. Public and Private Innovation. Public and private innovation must keep working together to meet the mobility challenges of the 21st century. The role of the public sector is critical to ensure the continuous development of technology, application of innovations and protect the passenger’s rights. Traditionally most roads, railways and other transport infrastructure has been considered as public goods, and so that should be financed, totally or partially, through public investments. Although, nowadays the gap between public funds and infrastructure projects needs has broadened. The trend is that the transport sector needs must be met without spending extra public money. Therefore, the government is asking private sector providers to apply creative new approaches. Some interventions of the Governments to increase the availability of more efficient financing methods include the development of various Public Private Partnerships (P3s) programs, as: Operation and Maintenance P3s, Design-Build P3s, Design-Build-Operate P3s, Build- Transfer-Operate P3s, Lease P3s, Concession P3s and Divestiture P3s [24].
Certainly, each of these five disruptive trends can be applied to road, rail, and air transport. The focus is to take advantage of these trends to promote the integration between different modes of transport in order to achieve smart mobility and improve the passenger’s travel experience.
1.3. Trends: The Future of Mobility
There are many different theories on how is going to be the future of mobility but, they certainly agree that the technological advances -pushed by shifts in social needs- are transforming the transportation and mobility ecosystem. The simple action of going from point A to point B affects different actors of this ecosystem; as the Governments, automobiles and others vehicles makers, healthcare and insurance companies, energy companies, technology developer companies, and more. As technology evolves very fast, the ecosystem in mobility changes constantly. There is no doubt that the Digital Age has begun.
Digital transformation is changing the rules of the game. There are great advances in communications technologies applied to transportation, enabling the creation of Intelligent Transport Systems (ITS) all interconnected. Also, developments on the field of Artificial Intelligence (AI) made possible that nowadays autonomous vehicles are a reality and not any more a science fiction idea. Another important fact is the transformation on how people and companies treat and manage “big data”. In this point, the transition from an on-premises model to a cloud model has pushed for great developments on the transportation industry and mobility preferences, opening the possibility for new services.
This chapter will focus on the trends that better describe the Digital Transformation inside the transportation and mobility services industry. These trends are: the transition from an on- premises model to a cloud model, the development of Intelligent Transport System, and advancements on the Artificial Intelligence.
1.3.1. On-Premises VS Cloud Model Application in the Transportation Industry
The world is going through a fourth revolution, the information technology and telecommunication revolution, and so the transportation industry is part of this digital transformation. One of the consequences of digitalization is, indeed, the generation of high amount of data. Over time, large companies have built their own big data warehouses (on- premises systems) for storing their data-sets, containing millions of records. These data-sets provide critical business functions and are accessed through programs that represent the core business logic. In the recent years, with the availability of high performance cloud-based storage and servers, many organizations are considering moving - partially or totally - from an on-premises data-sets to the cloud model [18]. Both are mode of use that can be implemented by any company for big data storage.
Why these models are important in the transportation industry? Today, as information is becoming more important than physical assets, transport companies continue to invest in management software, either on-premises or on cloud, to reduce costs, improve efficiency, and help to run their overall freight management functions more effectively. Therefore, the tendency in the market is an increasing level of the digitalization, and to move from a data connected environment to an automated transport environment [21].
Figure 13: Tendency of the Transportation Management System. Source: Ericsson Inc.
In fact, each model has its own positive and negative aspects. Understanding the whole picture and determining how both cloud and on-premises models fit into a company is vital.
1.3.1.1. The On-Premises Model
This solution is what most businesses implement as a traditional approach. The on-premises model means to install and run a software on own computers, on the premises of the person or organization using that software. The servers are located in the user’s office. Therefore, the company to implement an on-premises system will purchase the hardware and software licenses. Another form of on-premises system is to operate with an outsource hardware and run the own software in a hosted solution. Originally was called ASPs (Application Service Providers), these are installed on-premises solutions where the database is hosted by a vendor or a third party. Access to your on-premises software is offered via the Internet and your IT team plays a small role in ensuring the software is integrated within your environment [19].
Figure 14: On-premises with hardware outsourcing model Figure 15: 100% On-premises model
The main advantages and disadvantages of the on-premises model will be defined below [20] [21]. Advantages:
. Everything that needs to be protected is inside the organizational perimeter, providing fewer disparate data locations to protect. Assuming threats to the network, applications, and people can be stopped at the perimeter, thus offering a simple approach to IT and IT security. When a company maintains an in-house data center, the control of who accesses the data is in higher control. . With in-house data centers is possible to ensure better maintenance of the servers as system checks can be performed when they are required. . No dependence on Internet connection. . High level of customization. An on-premises application is customized to suit the business needs of the company. . The company have control over upgrades, able to decide when and what upgrades will be introduced to the system.
Disadvantages:
. Usually a high investment is required in the implementation phase. For operate on- premises model the company first must invest on in-house server hardware, license or purchase a copy of the software to operate, integration and active support from the IT, employee training for managing the system, and the following maintenance of the whole system. . Protecting only the organizational perimeter is an approach with a decreasingly short shelf life. There is a decreasing number of companies that implement an on-premises only model. . Guarantee security maintenance is extremely important. . On-premises systems often require complicated security profiles for data to be accessed by a third party, so remote and other off-premises users or workers are more difficult to secure. Requiring VPN and backhauling all traffic through the company’s data center to mitigate the risk. This can introduce an additional IT challenge.
1.3.1.2. The Cloud Model
Cloud computing model is a general term for a range of online computing services and is essentially the delivery of on-demand computing resources (everything from applications to data centers) over the Internet on a pay-for- use basis [19]. The concept of Cloud Computing is becoming a new trend. Some important participants in this IT trend are giants as Amazon, Google, Microsoft, and IBM. Using the benefits, such as low cost needed to invest into IT infrastructure and maintenance, high degree of availability, scalability, reliability; these cloud service providers succeeded in persuading enterprises to use their cloud-based applications Figure 16: Cloud model representation or to migrate their dependency on-premises applications and transfer to the cloud [22]. The main advantages and disadvantages of the Cloud Model are defined below [28]. Advantages: . The initial costs for the implementation are lower as what is necessary to operate is the software and access through the internet. The service provider does the maintenance and upgrading as well as ensuring the security of the system. . Often based on pay-as-you-go subscription models. No requirement of purchasing expensive technology equipment. Most costs will be absorbed by the cloud service provider. . Possibility to access to the cloud software from anywhere in the world with internet connection. The access is not limited to any physical offices. Disadvantages: . Need for a consistently stable, high speed internet. Cloud applications depend on internet access to be usable but not all places in the world have steady access to high speed internet. . Usually is not customized to suit a particular business’ needs. . There is no control on updates. Many cloud applications implement daily, weekly, or monthly upgrades; this can be problematic for the final users.
Today, there is no doubt that clouding represents a business opportunity through all the means available of architectures for delivering the service, such as [23] [24]: . Software as a Service (SaaS). Also known as cloud-based applications, are supplied from distant computers “in the cloud” that are owned and operated by a provider as a service to customers. The cloud-based applications connect to the user’s computers via the Internet, allowing them to access their data anywhere and at any time. Most SaaS applications can be run directly from a web browser without any downloads or installations required, although some require plugins. In this sense, SaaS main characteristics are: - Designed for end-users delivered over the web - Web access to commercial software. - Software is managed from a central location. - Software delivered in a “one to many” model. - Users not required to handle software upgrades and patches.
. Infrastructure as a Service (IaaS). Also known as cloud infrastructure service, is a way of delivering Cloud Computing infrastructure - like servers, storage, network, or operating systems- as an on-demand service. So, rather than purchasing servers, software, datacenter space or network equipment, customers instead will buy those resources as a fully outsourced service on demand; meaning that instead of having to purchase hardware direct, customers can purchase IaaS based on consumption, similar to electricity, water, or another utility billing. IaaS main characteristics are: - No purchase of hardware, users pay for IaaS on demand. - Infrastructure is scalable depending on processing or storage needs. - Avoid companies to have invest high investments on buying and maintaining their own hardware. - Flexibility. Enables the virtualization of administrative tasks.
. Platform as a Service (PaaS). Also known as cloud platform service, is a cloud computing offering that provides users a cloud environment in which they can develop, manage, and deliver applications. It allows the creation of web applications quickly and easily and without the complexity of buying and maintaining the software or infrastructure. PaaS differs from SaaS in term of rather than deliver a software over the web, it is a platform for the creation of software, delivered over the web. In this sense, PaaS main characteristics are: - Services to develop, test, deploy, host, and maintain applications in the same integrated development environment. - Multi-tenant architecture where multiple concurrent users utilize the same development application. - Integration with web services and databases via common standards. - Support for development team collaboration, as some PaaS solutions include project planning and communication tools. - Tools to handle billing and subscription management.
The previous services represented more traditional models of cloud application. However, there is also a shift from personal-owned to solutions that are consumed as a service within the transportation industry: . Mobility as a Service (MaaS). This model relies on a digital platform that integrates several services across all modes of transportation: end-to-end trip planning, booking, electronic ticketing, and payment services. Instead of having to locate, book, and pay for each mode of transportation separately, MaaS platforms allow the users to plan and book door-to- door trips using a single application. The planning is executed based on real-time traffic conditions, taking account of all the possible options and each user’s preferences (time, cost or convenience). MaaS is the next step toward a more user-centered mobility paradigm, the incorporation of autonomous vehicles technology and the integration of all actors of the transport ecosystem. MaaS is still at a very early stage of development. Although, some incumbent transport operators are beginning to understand that their business models will need to change soon. The next table describes relevant MaaS pilot platforms around the world [33].
Project Description Operator Location
Offers their users the access to a variety of transportation options, from taxis to rental cars, public transport, and Whim app bikeshare. The app learns user’s MaaS Global Helsinki preferences and syncs with their calendars to intelligently suggest ways to get to an event. This fully integrated mobility service Lindholmen UbiGo combines public transportation, Science Park Gothenburg carsharing, rental car service, taxi service, and partners and a bikeshare system; all in one app and in one invoice. Qixxit app plans routes according to user needs. It offers carsharing, ridesharing, and bikeshare options. It identifies ideal Deutsche Qixxit Germany train connections; and shows all travel Bahn possibilities for users to compare and choose from. In Singapore’s first marketplace for crowdsourced bus services. Users can book a seat on buses listed by private bus Government Beeline operators and track their location. They agencies and Singapore can also suggest new routes since new partners routes are activated by community demand.
Table 4: MaaS pilot platforms around the world
1.3.1.3. On Premise VS Cloud Model: main drivers
The advantages and disadvantages of on-premises and cloud models can be analyzed through these main drivers: cost, security, deployment and scalability, and user access. The next table will give better understanding of both models, pointing their strengths and weaknesses.
Models Drivers On-premises Cloud Lower long-term costs, as the big investment is done once, at the implementation phase. Lower up-front costs, as they are No monthly costs. Typically, considered as operating expenses. structured on the annual or multi- On-demand basis costs, usually paid year plans. monthly. Require a substantial high initial Support or maintenance costs are investment. Hardware needs to be included in the service, no need for Cost purchased and installed, and additional fees. Easy for budgeting. contractors need to be paid. Price increases. Due to monthly pricing Costs and associated risks due to the and lack of control on updates and other fact that the hardware and data features enhancements, customers can center is own by the customer. experiment more frequent price Extra costs on IT team supports and increases. users training for the on-premises software. Less risky because of secure on- Access to cloud applications is via premises location. Internet, which can create some security Security Customization. Security can be risks. customized for a specific company’s Limited customization and dependency process and requirements. on cloud provider’s offer. Although many Knowledge and data reside in-house. providers offer a very high level of Might be preferred be companies security. with high security need. Even cloud can be effectively secure, is The company’s security is as good as not a totally substitute for the in-house its in-house security policy. For high security policy. security requirements, a solid policy Control. The customer may not be able to and in-house expertise is needed. know who truly has access to their data Full responsibility on managing or exactly where is stored. backups and recoveries, in case of unexpected disasters. Faster implementation. As cloud services do not require to install hardware or Usually has slower cycle to release software onsite. updates. These updates may require High scalability. As the model is on- change of hardware or software, demand basis, the customer can ask for increasing costs. more services, like increase capacity of Long time to implement. As previous storage. purchase and training process is Low in-house IT involvement as the required. software’s updates, backups, and other Deployment High in-house IT involvement, as a tasks are done by the cloud service full and trained team is required to and provider. ensure the correct functioning of the Scalability Services and software are typically network. configurable but, in some cases, not as Updating features may need to be customizable as some customers might repeated, depending on the require. architecture of the on-premises Due to the rapid release and update solution. Upgrades can take months schedules of cloud services, the or years and can involve additional integration and proper running of the costs. whole system can become unstable during these updates. Internet connectivity is not High mobile access. Fully accessible via necessary. On-premises can run browsers running on mobile devices. without internet access. This aspect Internet connectivity is required. Wired is critical in areas where internet and wireless connectivity provide easy connection is not reliable. access for remote users. User For companies that require large Dependency on internet connection number of users accessing the same access reliability for the correct functioning of data simultaneously, on-premises the system. solutions can be faster. Require high-quality and reliable internet Low mobile access. Limited access to access for workers to be productive, no business applications via browsers matter remote or onsite. running on mobile devices.
Table 5: Comparison between On-premises and Cloud Model While the on-premises model has been a solution for much more time by offering a traditional approach and in many cases also extensive functionalities. This model also requires higher initial investment and strong cash flow management for the in-progress operations costs; as investments in a strong data security, equipment maintenance, backup and recovery management, climate control, insurance, upgrades control, etc. A cloud-based model provides a flexible and extremely accessible alternative where the user can access real-time data, as long as internet connection is available and of high quality. Since this model is based on on-demand pricing basis, the benefit is focused in the reduction of initial costs on hardware and software purchasing, which are transfer to the cloud service provider. Also, the level of flexibility of this model allow to adjust the services as the business needs the change.
In conclusion, the decision between on-premises and cloud model solutions will depend on the specific needs of each organization. The decision to go with a 100% on-premises, 100% cloud or hybrid (combination of both) solution should be made after analyzing the specific requirements of the company.
1.3.2. Intelligent Transport System
The Intelligent Transport System (ITS) encompass the technologies that intend to improve safety, efficiency, and convenience of the overall transportation network. ITS include applications that process and share information to reduce congestion, improve traffic management, minimize environmental impact and increase the benefits of public transportation to users.
Information technology, or only IT, has changed many industries including transforming the transportation systems. Improving a country’s transportation system is not only constructing or repairing infrastructures, the development of transportation is also increasingly supported by the application of IT. Information technologies enables the components of the transportation system (vehicles, roads, trains, traffic lights, sensors, etc.) to become “intelligent” by insert microchips and sensors, and allow an integrated communication through wireless technologies [25].
ITS is bringing significant improvements to the transportation system performance [26], including:
. Reduction in congestion . Increase safety and traveler convenience . Improving operational performance . Enhance mobility and convenience . Environmental benefits . Boost productivity and expand economic and employment growth
Figure 17 Example of technologies associated with ITS applications. Source: ITIF.
Intelligent Transport System application areas Intelligent transportation systems include a wide and growing suite of technologies and applications. ITS applications can be grouped within five summary categories [26]:
ITS application area Specific ITS Applications Description
. Real-time Traffic Include real-time information, as Information Provision transit routes and schedules, Advanced Traveler . Route Navigation Systems navigation directions, and information Information Systems . Parking Information about delays caused by congestion, . Roadside Weather accidents, weather conditions, or road Information Systems works. . Traffic Operations Centers (TOCs) Advanced . Adaptive Traffic Signal These systems include traffic signals, Control Transportation ramp meters, variable message signs, . Dynamic Message Signs Management Systems (or “Variable” Message and traffic operations centers. Signs) . Ramp Metering
. Electronic Toll Collection . Congestion pricing These systems include applications ITS-Enabled . Electronic Road Pricing which facilitates and automate the Transportation Pricing . Fee-Based Express Lanes pricing in certain processes, such as Systems . Vehicle-Miles Traveled electronic toll collection (ETC) or (VMT) Usage Fees congestion pricing. . Variable Parking Fees
. Real-time Status For example, the Real-time Status Information for Public Information for Public Transit System Advanced Public Transit System allows trains and buses to report their Transportation . Automatic Vehicle position so passengers can be informed Systems Location (AVL) . Electronic Fare Payment of their arrival and departure (as Smart Cards) information.
This correspond to Vehicle-to- . Cooperative Intersection Infrastructure (V2I) and Vehicle-to- Fully integrated Collision Avoidance Vehicle (V2V) integration. The systems intelligent System (CICAS) enable communication among assets transportation . Intelligent Speed in the transportation system. For Adaptation (ISA) systems example, from vehicles to roadside sensors, traffic lights, or other vehicles.
Table 6 Intelligent Transport System application areas
1.3.3. Artificial Intelligence in Transportation
The transport, either of people or freight, generates big amount of data. This data, as pure information that it is, is useless without a powerful computer that can identify traffic patterns and create a smarter use of transport networks. Accordingly, the Artificial Intelligence (AI) is the intelligence exhibited by computers or machines that can use data for building improved systems and enabling decision support [27]. Many advantages related with AI applied into transportation systems, indicate that the actual broad gap between AI and mobility will be closer in the future.
Artificial Intelligence Application Areas AI application areas are diverse. The next table lists and describe some of the application areas where AI methods has been applied over the years related with transportation systems [28].
AI application area Description
By building empirical dynamic models of systems from measured System identification and data, or mapping system inputs to outputs. In transportation function approximation systems, many of the interrelationships between the variables of a transportation system are not fully understood.
Focuses on the prediction of the behavior of systems where the relationship between input and output is not linear. This happens Non-linear prediction with transportation problems as: predicting traffic demand or deterioration of transportation infrastructure as a function of traffic, construction, and environmental factors. Focuses on controlling a system to achieve a desired output. There are many control applications in transportation. For example, the Control signal control of traffic at road intersections, ramp meters on freeways, dynamic route guidance, and air traffic control. The task is to classify an object or put it in its right class or category, where a pattern classification recognition is performed to be Pattern recognition or associated with image processing. For example, the automatic classification incident detection (classifying the traffic state as incident or incident-free), image processing for traffic data collection and for identifying cracks in pavements. This focus on the problem of grouping cases with similar characteristics together and identifying the number of classes. For Clustering example, clustering could be used to identify specific classes of drivers based on driver behavior.
This is the act of formulating a program for a definite course of action to complete a desired objective. The objective of the transportation planning process is to identify the transportation Planning needs of a community and to recommend the best course of action required to meet those needs, but taking in consideration the economic, social, and environmental impacts of transportation. This key activity includes, for example, geometric design of highways, interchange design, structural design of pavements and Design bridges, culvert design, retaining walls design, and guardrail design. AI provides additional decision-support capabilities. This refers to the cognitive process of selecting a plan of action from multiple alternatives. For examples, deciding where to build Decision making a new road, how much money should be allocated to maintenance and rehabilitation activities, which road segments or bridges to maintain, or where to redirect traffic in an incident situation. This refers to the analysis of problems where is needed to minimize or maximize a function by choosing values from a set of decision variables, satisfying the constraints. For example, Optimization designing an optimal transit network for a community, developing an optimal shipping policy for a company, developing an optimal maintenance work plan or developing an optimal timing plan for a group of traffic signals.
Table 7 Artificial Intelligence Application Areas
Artificial Intelligence as a Transport Application
AI provides the advantages of permanency, reliability, cost-effectiveness and also addressing the uncertainty and speed in solving a problem or reaching a decision. Some applications of AI into transportation can be describe as [28] [29]:
. AI methods are capable of dealing with both qualitative as well as quantitative data, a feature that most strictly analytical methods is not able. Transportation problems often involve both quantitative and qualitative data, which makes the AI a perfect tool for processing such complex information.
. AI methods are suitable when a direct mathematical relationship can’t be established between cause and effect. In this way, AI models capture the uncertainty between real and projected effect scenarios, by incorporating available data knowledge and probability inference computations. The transportation systems behavior is very complex to model with traditional approaches, due to the fact that the interactions among the different system’s components are not fully understood and because there is a high level of uncertainty caused mainly by the human component of the system.
. Depending upon the computational time in terms of algorithmic complexity and processor capacity, AI tools can facilitate faster decision making by automating the decision-making process. Through data gathering and screening, processing, and decision making, AI can support faster solutions to complex problems. Artificial Intelligence in the Automobile Industry Vehicles have become increasingly sophisticated. Somehow, technology advancements, as the Artificial Intelligence, has transformed them into computers on wheels. The tendency is turning to autonomous vehicles. This thought was initially proposed on the 70’s as a futuristic idea that now is already reality and soon will become a commonly use service.
The concept of autonomous vehicles has been around for many decades, but it was until the major developments on the AI field that it took higher importance. By integrating Artificial Intelligence in a vehicle, it enables a self-driving service acting as a human driver and being able to drive through any circumstances. In this sense, AI is responsible to integrate data and advanced algorithms to imitate the cognitive functions of the human mind.
Leading technological and automotive giants are assigning huge investments on R&D to come up Figure 18: Autonomous Cars on the road. Source: with better technology and to make autonomous U.S. Department of Transportation. vehicles a commercial reality. Tesla, Google and Apple have been at the cutting edge of innovation in autonomous vehicles. Tesla has installed full autonomous driving software in every car they produce including the new Model 3 recently released [38]. Google’s Waymo each time reducing more and more the number of human interventions needed for its driverless cars. The company is currently testing a self-drive minivan version in many US cities [39].
Traditional automobiles manufacturers are also on their way to deliver fully connected cars in the near future, shaping the future of autonomous driving. For example, Volvo started in 2013 the “Drive Me” project and had recently launched a trial in the UK with real families testing their driverless cars [40]. Ford Motor Company made an investment of one billion dollars in Argo AI, a new Artificial Intelligence company to create a self-driving vehicle system, estimated to be operative by 2021. The startup Argo AI was founded by a partnership between two top engineers from Google and Uber. Mercedes-Benz E-Class model is, until now, partially autonomous driving with automated parking, advancements that rely on AI. The model is equipped with numerous intelligent assistance systems that support drivers. The artificial intelligence technology enables the automobile to automatically maintain an appropriate distance from vehicles ahead at a speed of up to 210 km/h. Also, it automatically recognizes speed limits [41].
2. Market Analysis in LATAM
2.1. Introduction to Latin America
This chapter offers an overview of current trends as well as of the main challenges faced by Latin America. The focus of the analysis will be on the most relevant countries for the transportation development: Argentina, Brazil, Chile, Colombia, Mexico, and Peru.
Figure 19: Relevant Latin American countries.
The Context
An important fact to consider is that Latin America region have changed its tendency, after six consecutive years of decreasing growth and slowdown in public and private investments, the scenario is changing to positive. During the last decade of higher growth in Latin America, the percentage of people living in poverty on the continent fell from 42% to 26%, while the middle class grew from 22% to 34%. Although the recent positive results, the years of economic slowdown have impacted on social progress, and the region needs to stimulate the economic recovery and find new engines of growth focused to reduce poverty and develop prosperity for society.
For the World Bank, regarding the years of slowdown mentioned, this period had adverse effects on jobs and household incomes, as the inequality reduction and the middle-class growth have slowed. In addition, nearly 39% of Latin Americans remain vulnerable to falling back into poverty. Therefore, the challenges of the region must include to boost investments, savings and exports; and create better conditions for the private sector development. Countries need to manage external and fiscal imbalances, pursue economic integration in the region to become more competitive globally, determine priorities in investment during the adjustment process, and work on the reduction of gaps in logistics and infrastructure that are important obstacles for the trade inside the region. [30] LATAM Economic growth
Economic growth in Latin America and the Caribbean in 2016 was the third lowest in 30 years. The decreasing in growth was caused mainly by the weak domestic demand from lower commodity prices, ongoing fiscal and external adjustment in some countries, and other specific domestic factors in each country. Although, positive numbers are emerging from the economy of this region, confirming that the recovery is gaining traction this year. Therefore, Latin America and the Caribbean is expected to gradually emerge from recession during 2017. The International Monetary Fund, forecasts that the region Gross Domestic Product (GDP) will grow by 1,1% during 2017 and 2% in 2018. Over the medium term, the growth is expected to remain over 2,6% [31].
The next graph shows the forecasted GDP for the year 2018, considering the biggest economies in the Latin America region.
Figure 20: Latin America forecasted GDP for 2018. Source: Focus Economics.
LATAM Inflation Rate
Inflation rates in Latin America have been decreasing substantially. Some of the reasons behind this lightly and continuous decrease of inflation in recent months are: the weakness of domestic demand, the relative stability of exchange rates, the slowdown in the price of oil and favorable conditions of food pricing pulled by a better supply chain activity.
During the first half of 2017, annual inflation has reached its lowest level in recent years. For instance, reduced levels of inflation appear in the following countries: Argentina 23.4%, Brazil 3%, Chile 1.7%, Colombia 4%, Peru 2.7% and Uruguay 5.3%. In Paraguay, although actual inflation is not the lowest figure registered in recent years, it is also at a particularly low level. In Mexico, after registering moderate price increases during the first months of this year, inflation reached 6.3% in June, the highest level since the end of 2008. Therefore, inflation is currently within the range established by the respective central banks in Brazil, Colombia, Paraguay, Peru, and Uruguay; below the targets set in Chile and above the target in Argentina and Mexico. For 2017, the expected inflation for the region (excluding Venezuela) will be +6,1%, and the forecast for 2018 will be +5,2% [32].
Figure 21 Inflation Rates in Latin America Countries. Source: BBVA Research.
Current Challenges
Latin America’s challenges require a strong commitment to protect the most vulnerable part of society and secure the achievements made by those who escaped from poverty to enter the middle class. For the World Bank [30], the focus should be now on strengthening the economic recovery, improving the infrastructure, investing in human capital and protecting the economic vulnerable people. Therefore, the challenges that LATAM region must overcome are related with:
• Increased productivity and Transport Infrastructure. The region’s productivity is affected by high logistical costs, aging and low investment in human capital, and inadequate transport infrastructure. Logistics and transport in LATAM cost 2 to 4 times more than in OECD countries and the Asian countries. The strategy is to increase efficiency, stimulate innovation, develop urban and rural infrastructure, and develop a more skilled and competitive labor force.
• Investing in Human Capital. Improving the quality of education is fundamental to developing the skills demanded around the world nowadays. In many countries is evident the lack of public schools with high or at least a competitive level of education. The gap regarding quality of education against the offer of private schools is very high, making good education very costly. In addition, a World Bank study shows that low average teacher quality make Latin American students lose the equivalent of one full day of class every week. Statistically, 1 from every 5 teenagers aged 15 to 24 in Latin Americans don't work or study, representing considerable development challenges.
• Enhance governance. The access to quality public services remains a challenge and there is growing dissatisfaction with the quality and level of services provided by the Government, including urban mobility and transportation infrastructure, education and security.
• Environmental protection and sustainable growth. Although LATAM region is not the major contributed to high global emissions; the adoption of eco-friendly transport, emission targets, and payments for environmental services are important in the leading to a sustainable economy. Latin America is a global promoter for some of the most innovative, environmentally friendly practices. Nonetheless, the good economic performance in recent years has created new pressures: around 80% of the region’s population now live in cities, increasing the urgency to introduce environmental friendly practices in their urban development and growth.
2.2. Latin America countries’ Analysis and Overview
The transportation sector refers in general terms to the transportation of goods or customers, or both. The transportation sector is vast and comprises a wide range of individual industries, including major and regional airlines (also known collectively as air services), railroads, shipping firms, inter-oceanic freight haulers, trucking and firms more indirectly related to transportation such as Supply Chain Management firms and other Logistics Operators. Therefore, is important to perform a market analysis of each country where is intended to implement a system integrator to better understand each environment and their key factors. 2.2.1. Argentina
. General Information
Region South America Population [mln] 43,42 (annual growth: +1,01%) Area [km² ] 2.780.400 km² Language Spanish Capital Buenos Aires
Currency Peso Argentino ($ ARS) (1 U.S. dollars ≈ 16,15 ARS)
. Administrative Divisions
Argentina is located in the southern zone of South America, with an area of 2,8 million km², it occupied the position #8 of the biggest countries worldwide, and the #2 of the region, after Brazil. The Republic of Argentina is divided into 23 federal states or provinces.
The capital city is Buenos Aires, located in the central-east part of the country. This city has a population of 2,9 million people, concentrating the 6,7% of the total population. The income per capita in this city is around $24.000 USD.
. Economic and Social Situation
Argentina is the 21th largest economy in the world by total GDP. The World Bank classified this country as high-income economy. The basis of the economic performance is the exploitation of natural resources, high literacy rate and education level, an export-oriented agriculture sector and a strong and diversified industry base. Historically, Argentina economic performance has been irregular, where high economic growth alternated with severe recessions. The country has a consolidated solid top position in Latin America. Although, inflation has been a weakness of the country for years. The actual consumer’s inflation is around 30%, where critical factors are the devaluation of the national currency, and the elimination of subsidies by the Government.
Indicator Result
Logistic Performance Index 2,96 / 66°
Gross Domestic Product 584 / 2,64% (current US$ / annual percentage growth)
Final Consumption Expenditure 490 / 4,03% (current US$ / annual percentage growth)
Population in largest cities 43,9% (percentage)
Unemployment Rate 6,55% (percentage)
Inflation +25,6% (annual variation in percentage) Table 8: Indicators regarding economic and social situation in Argentina, 2016. Source: The World Bank.
. Politic Situation
The political form of governance in Argentina is Federal Republic, where the principal head of state is the President of the Republic. This country is organized around the executive, legislative and judicial branches of government. The federal system is constituted by the 23 Provincial Governments. The President is the chief of state and head of Government, it is also the supreme commander-in- chief of the armed forces. The current President is Mauricio Macri, since December 10, 2015 The next graph describes the indicators regarding the political situation estimated by The World Bank. The range goes from -2.5 (weak) to 2.5 (strong) governance performance.
Figure 22: Political Indicators – Argentina. Source: The World Bank (2016).
. Digital Situation
The following graph describes the indicators regarding the digital situation estimated by Statista Inc. Digital Market Outlook for 2016.
Figure 23: Indicators Digital Situation – Argentina, 2016. Source: Statista Inc.
. Future expectations on Argentina’s economy
Argentina, with a GDP of more than US$550.000 million, is one of the biggest economies of Latin America. The country is in process of economic transformation, which promotes the economic sustainable development with social incorporation and insertion in the global economy. Argentina has abundant natural resources in energy and agriculture. The territory of 2,8 million km2, has agricultural fertile lands and an enormous potential in renewable energies. It is also leading country in food production. The last presidential elections, of ends of 2015, drove to a significant positive change in the Argentinean economy.
The new Government has rapidly implemented key reforms such as the unification of the exchange rate, the agreement with international creditors, the modernization of the regime of imports-exports, a deceleration of the inflation rate and the reform of the system of national statistics.
Figure 24: Argentina's Annual Inflation Rate. Source: The World Bank.
As it’s possible to appreciate on the graph, Argentina’s GDP has suffered constantly variations through time. The international crisis on the 2008-2009 stroke Argentina very hard. By this period, the GDP growth decrease -5,9%.
2006 2008 2010 2012 2014 2016
Figure 25: Argentina's GDP vs LATAM's GDP. Source: The World Bank.
. Transport System Analysis
I. Transport Network Overview
The Transport System represents a strategic sector to economic and social level which constitutes 5 % of the GDP. Although public transportation is available in most large urban areas, the automobile is still essential in many regions. In Buenos Aires, trains connect most major suburban areas, and buses connects Buenos Aires with major Argentina cities. The railway system was privatized at the beginning of the decade of 1990, for the transport of both load and the passengers. Maritime transportation is mainly use for freight, so most imports arrive to the country by this mean. The most important port is Buenos Aires (most important container port).
II. Rail Transport System
Rail transportation includes a network of 47 059km. Some years ago, it was considered one of the most longest of the world. Nowadays, in Latin America region is still the longest. It has international connection with Paraguay, Bolivia, Chile and Uruguay.
Metro transportation is present only in the city of Buenos Aires. It has 6 lines and 78 stations. Other modes of transport in the country are urban trains, suburban trains and trams (present in 6 cities). The project of High speed train was announced on 2008, but on 2012 was suspended.
Railway Situation
- The railway system covers 47 059km, of which 190 km is electrified. - The country position for comparison to the world is 8°. - The traffic of passengers for Buenos Aires Metro and Suburban Train System is around of 690 million people (Y2012). - As is possible to appreciate in Figure 17, since a high pick in 2007, the freight transported by railway has been in a decreasing tendency.
Freight Railway Transportation in billions of Ton-km
Figure 26 Railway Freight Transportation Evolution - Argentina. Source: IETSA
Companies and Market Size
- Most representative companies are: Metrovías S.A.(Roggio Group), Ferrovías (EMEPA Group) and Trenes Argentinos Operaciones. - Metrovías S.A. is a private concessionary company, own 90% by Roggio Group. On the year 2012, their revenue was of $5,5 million USD. - Ferrovías operates the Belgrano Norte Line. Own by the Group EMEPA, multinational company. Operates in many sectors, such as rail and maritime transport, infrastructure, engineering and construction, real estate development, metallurgy and agroindustry.
Railway Governance
Railway is regulated and authorize by Ministry of Transportation of Argentina. The Law N°2.873 gives regulation to railway national transportation. The competent authorities in the railway activity are: - The Ministry of Transport, only authority that can introduce modifications to the Rail General Regulations. - Railways National Direction, institution in charge of the management of services and fees. - Railways Institutions such as: National Agency of Road Security (Agencia Nacional de Seguridad Vial - ANSV) and National Commission of Transport Regulation (Comisión Nacional de Regulación del Transporte - CNRT), Subsecretary of Railway Policy. - Federal and Local Governments.
III. Public Local Transport System
The buses, well known in Argentina as “Omnibus”, are very popular for both people and freight transportation. The Metrobus is a special transport mean, with exclusive roads, that is present in main cities of the country. Due to the focus of transportation development on Buenos Aires city, a great portion of the population still relay on private transports for day-to-day transportation, some main means are: taxis, carsharing and carpooling.
Public Local Transport situation - Main development and future projects are focus on Buenos Aires city (15,89 million of inhabitants); where actually operate trams, buses, metrobuses, metro, and suburban trains. - The “SUBE” card is a prepaid magnetic card that can be use as paying method in all the network of public transportation of Buenos Aires. - Cities with medium transport development are Cordoba (1,33 million of inhabitants), Rosario (0,94 million of inhabitants) and Mendoza (0,115 million of inhabitants). - In Cordoba the main public transportation mode includes buses and trolley buses (electric buses).
Companies and Market Size
- The market is form by many small companies. On 2008 the number of bus companies operating in Buenos Aires was 91, performing 135 lines and with around 10.000 buses on service.
Public Local Transport Governance - Regarding public transportation, the Transport Ministry acts as a link between the transport companies and the State. There are many small public transport companies that the State must conciliate with. - Driver’s unions and syndicates have much power and complicates the implementation and development of new projects. - The market is form by many small companies. On 2008 the number of bus companies operating in Buenos Aires was 91, performing 135 lines and with around 10.000 buses on service.
IV. Logistic Hubs and Ports System
Hubs and Port situation
- The maritime transportation is mainly use for freight. In total, there are 36 ports. The most important is Buenos Aires Port, which concentrates the 90% of containers movement. Due to its modern infrastructure and freight capacity, is one of the top important port of Latin America. It is divided into 3 big sectors: “Puerto Nuevo”, “Darsena Norte” and “Puerto Sur”. - The “Administración General de Puertos Sociedad del Estado” (AGPSE) is the Government’s institution in charge of the port’s management and infrastructure maintenance.
Main ports Operators
- Terminal 1, 2 and 3: Terminales Rio de la Plata, own 55% by DP World (Revenue ≈ $4163 million USD for operations worldwide Y2016). - Terminal 4: APM Terminals (Revenue ≈ $4.17 billion USD for operations worldwide Y2016). - Terminal 5: Buenos Aires Container Terminal Services S.A. – BACTSSA, part of Hutchison Port Holdings (HPH) Group.
V. New Transport Modes
Most sharing economy ventures operate as smart phone applications, reason why the development of this sector will depend directly on the growth of number of smart phones users. In Argentina, it is expected that the number of users will reach the 29.2 million by 2021.
People, Name Location Category Description freight or Operator both? First Argentinean car sharing company. Work as a community Carpoolear Rosario Car Sharing People that promote the carpooling to fight against traffic and pollution. Dial-a-ride Uber Buenos Aires International company. People transport
International company. It only Dial-a-ride Cabify Buenos Aires operates in Buenos Aires. Direct People transport competition of Uber. Buenos Aires, Cordoba, Ezeiza, Dial-a-ride International company. Available Easy taxi People Rosario, Villa transport in 5 cities. Carlos Paz This operates only in Buenos Aires since 2010. State’s company. It’s a EcoBici Buenos Aires Bike Sharing People free service also offered to tourists. This operate only in Rosario, with 18 stations and 200 bikes around Mi Bici tu Rosario Bike Sharing the city. Required a subscription People Bici cost plus cost depending on time of use.
VI. Transportation Authorities
The transportation authorities are the organizations, public or private, which regulates the transport ecosystem in the country, for both freight and people transportation.
People, Name Authority Location Category Description freight or both? Main function is to propose policies Ministry of Bueno regarding transportation. Ministry Ministry Both Transport Aires acts as a link between private transport companies and the State. Formulate policies regarding the Ministry of Bueno traffic, transport and infrastructure. Ministry Both Tourism Aires Have as mission the sustainable development of all regions. Aeronautic authority under the Argentinean Civil Bueno Aviation Transport Ministry. Top direction of Both Aviation (ANAC) Aires Association civil aviation. Regulates and monitor. Comisión Nacional de Under the Transport Ministry. Bueno Transport Regulación del Regulates and monitor the road Both Aires Association Transporte transportation over the country. (CNRT) Promotes the development of a Instituto Bueno Transport National Transport System, Argentino de Both Aires Institution orientated to fulfill the aims of the Transporte (IAT) National Policy of Transport. Design and implement public policies Ministry of Urban to increase the life quality of citizens. Buenos Development and Ministry Implement projects of urban Both Aires Transport development for all means of transport.
VII. System Integration Industry
Name Category Description Operator Global company, founded in 1979, have clients in more than 26 countries. Their specialized tool is named HASTUS, a powerful Montreal, GIRO Inc. modular solution for bus, metro, tram, and rail scheduling and Canada operations. Optimizing the planning, analysis, Scheduling and daily operations. GMV Global company, founded in 1984. Specialized in the design, development, manufacturing and marketing of ticket-vending and Innovating Spain. fare collection systems. Offers solutions for road, rail and maritime Solutions transportation and other special fleets.
VIII. Transport System Development
The following are some of the current projects or future developments in order to improve the transport ecosystem.
National Plan of Transport and Infrastructure 2016 - 2019
The National Plan of Transport and Infrastructure correspond an investment of $33 billion USD, from both the public and private sector for the period 2016-2019. This project will mean the transformation of the road network, freight rails, ports, airport and improvement of urban mobility for Argentina [43].
Regarding road transportation, 1 100 km are already under construction and will be finished by December 2017. For 2019, is expected to reach the construction of 2 800 km of roadways. Another highlighted project is the binational tunnel of “Agua Negra”, that consists in 14km of tunnels that will connect the province of San Juan (north of Argentina) with the region of “Coquimbo” in Chile.
About rail transportation, the Plan will provide an investment of $6 billion USD for the freight sector. Including the renewal of 1 200km of railways. In the year 2018, it is expected to start the construction of 1 626 km of railways with an investment of $2 750 millions USD, and the generation of 7 000 jobs.
Other important objective of the plan is to increase the access to the ports. For this reason, $672 million USD will be invested in infrastructure [44].
2.2.2. Brazil
. General Information
Region South America Population [mln] 207,8 (annual growth: +0,86%) Area [km²] 8 515 770 km² Language Portuguese Capital Brasilia
Currency Real (R$ BRL) (1 USD dollars ≈ 3,33 BRL)
. Administrative Divisions The Federative Republic of Brazil, commonly known as Brazil, is the fifth largest country in the world; and the third largest in America, after the US and Canada. It is located in the eastern part of South America, covering and area of 8 515 770 km². Brazil is slightly smaller in size compared to the US. Brazil has 26 states and 1 federal district, which constitute its administrative divisions.
The capital city is Brasilia, although is not the biggest city of the country. The largest city is Sao Paulo. Brasilia has population of 2,8 million people. The GDP per capita in Figure 27 Brazil's Map this city is around $18 500 USD, much higher than the national GDP per capita $10 309 USD.
. Economic and Social Situation
With an estimated population of 202,8 million (year 2014), Brazil is the sixth most populated country in the world. The country’s population is relatively young, with a median age of 30.7 years
Brazil is the world’s seventh largest economy according to the latest World Bank data. On 2014, the nominal GDP of Brazil was $2,24 trillion, while in terms of purchasing power parity it stood at $3,07 trillion. The country is a well-diversified middle-income economy, with developed and large mining, manufacturing, and service sectors. The country’s service, industry, and agriculture sectors contribute 70,4%, 23,8% and 5,8%, respectively, to the total GDP (Y2014). Most of the country’s industries are located in its southern and southeastern regions [30].
Indicator Result
Logistic Performance Index 3,09 / 55°
Gross Domestic Product 1 803,6 / -3,8 % (current US$ / annual percentage growth)
Final Consumption Expenditure 1507 / -5,10 % (current US$ / annual percentage growth)
Population in largest cities 39,50 % (percentage)
Unemployment Rate 11,50 % (percentage)
Inflation +8,74 % (annual variation in percentage) Table 9 Indicators regarding economic and social situation in Brazil, 2016. Source: The World Bank.
. Politic Situation
The political form of governance in Brazil is Federal Republic Government is one of the largest democracies in the world. The principal head of state is the President of the Republic, how is elected for four years. This country is organized around the executive, legislative and judicial branches of government, which work independently in their respective spheres. The National Congress is the legislative body of Brazil, and the executive powers rest with the Cabinet. The President is the chief of state and head of Government, it is also the supreme commander-in-chief of the armed forces. The current President is Michel Temer, since August 31, 2016.
The next graph describes the indicators regarding the political situation estimated by The World Bank. The range goes from -2.5 (weak) to 2.5 (strong) governance performance.
Figure 28: Political Indicators – Brazil. Source: The World Bank (2016).
. Digital Situation
The following graph describes the indicators regarding the digital situation estimated by Statista Inc. Digital Market Outlook for 2016. Figure 29: Indicators Digital Situation – Brazil, 2016. Source: Statista Inc.
. Future expectations on Brazil’s economy
Brazilian economy was one of the first emerging markets to begin a recovery post the 2008 global financial crisis. However, Brazil is currently going through a deep recession. The country's growth rate has decelerated steadily since the beginning of this decade, from an average annual growth of 4.5% between 2006 and 2010, to 2.1% between 2011 and 2014. GDP contracted by 3.8% in 2015 and is expected to fall. The economic crisis, as a result of the fall in commodity prices and an inability to make the necessary policy adjustments, to this scenario is sum the political crisis faced by the country. All these factors had contributed to determine the confidence of consumers and investors.
Although Brazil’s economy has been under pressure from rising inflation and in 2016, the country’s economy contracted by 1%; the policies taken by the government towards structural changes are expected to bring back a healthy economy with a steady growth rate of 2% - 2.5% between 2017 and 2020.
Figure 31 Inflation 2016 to 2017 - Brazil. Source: Figure 30 GDP Growth 2013 to 2022 - Brazil. Source: IMF World Bank
Additionally, foreign trade constituted nearly a quarter of Brazil’s GDP in 2014, with China, the US, and the EU being the largest trading partners. The total import and export for the year 2014 was US$225 billion and US$229, respectively. Brazil has been maintaining an important size of foreign reserve of US$381 billion in recent years (Y2014).
. Transport System Analysis
I. Transport Network Overview
Transportation, utilities and telecommunications are of fundamental importance due to the size of the country and the growing demands of industry. Although, after a decade of rapid growth, the Brazilian economy seems to be slowing. The low quality of its infrastructure has been found to be a major barrier to economic expansion in Brazil. The state of facilities in sectors such as transportation, energy, and water are found to be lacking in many ways. The World Economic Forum’s Competitiveness Rankings on infrastructure place Brazil at 76th position among 144 countries.
II. Rail Transport System
As part of the Brazilian’s Government Investment Partnership Program (PPI) the renewals of the existing concession of MRS, Rumo Logística and VLI will be anticipated. Which include to build the “Ferro Grão” railroad, to create a railway corridor for commodities exports from the state of Mato Grosso to the riverine ports in the north of Brazil. The project represents more than US$ 7.5 billion in investments for the rail sector. The upcoming rail concessions are part of the government’s efforts to raise private investment for infrastructure projects and boost a recovery from Brazil’s recession. In this way, there is an open panorama of opportunities in the sector for embedded technologies, intelligent transportation systems (ITS), risk and traffic management systems and operations, train control systems, telecommunication systems, track systems and equipment, rail maintenance equipment and services, etc. Railway Situation
- The railway system covers 29 817km, of which 498 km are electrified. - The country position for comparison to the world is 10°, over 136 countries. - Originally, the railways were nationalized under the RFFSA (Rede Ferroviária Federal, Sociedade Anônima) in 1957, but later from 1999 to 2007, the RFFSA was broken up. Now it is operated by a variety of private and public operators.
Figure 32 Map Existing and Planned Railways - Brazil
Companies and Market Size
- Main companies that operate railways services are: América Latina Logística, Companhia Paulista de Trens Metropolitanos and SuperVia. - The railway network is mainly use for freight transportation, which is indispensable for the high-volume transport. Brazil is dominating the rail freight transport in South America and accounts for around 85% of the transport performance in this region. - The transport of passenger by rail services increased at annual growth rates of 9% to 12% between 2011 and 2016 due to the introduction of the highspeed line and several metro, light rail and commuter rail projects. Then, it will slightly reduce to annual growth rates of about 7% to 8% until 2020. - New investments and projects are important. After the period were rail system was nationalized, the infrastructure lack of quality and proper maintenance, discouraging the people to use this type of transportation for regular mobility.
Railway Governance
- Railway is regulated and authorize by the Ministry of Transport of Brazil. It enforces and directs regulations concerning transport, from roads and railways to ports and aviation. It was established in 1992. The current Minister of Transport is Mauricio Quintella Lessa.
III. Public Local Transport System
Because of the insufficiencies in rail and sea transport, there is an important amount of freight that is transported by highway all over the country. Although the main highways are close to the coasts, roadways development in the interior is expanding and existing routes are being renovated.
Public Local Transport situation - Brazil has the highest number of metro systems in South and Central America. - Massive traffic problems in the metropolises are forcing the development of high- performance public transport systems, meaning that metro systems are preferred against light-rail systems. - Many cities have published plans to develop or upgrade metro systems. In this sense, Brazil was a pioneer in creating the BRT (Bus Rapid Transport), with exclusive corridors and boarding stations that reduce waiting times for commuters. This innovative solution was based on TOD (Transit-Oriented Development), a worldwide city planning approach that combines walking, cycling and public transport spaces; this medium-size system is far less costly than building subway lines.
Companies and Market Size - The market is form by many small companies. - The National Association of the Urban Transport Enterprises of Brazil (NTU) estimates over two thousand enterprises operate urban line services, whereby over six hundred are presently members of the Association. This great lot of operators makes out a complex structure of enterprises with differentiated structure.
Public Local Transport Governance - Urban transportation is regulated and authorize by the Ministry of Transport of Brazil. It enforces and directs regulations concerning transport from roads and railways to ports and aviation. - The Law Nº 12.587, issued in January 3rd, 2012; for the National Policy for Urban Mobility – PNMU. This law states that local mobility plans are mandatory for cities larger than 20,000 inhabitants. IV. Logistic Hubs and Ports System
Hubs and Port situation The maritime transportation is mainly use for freight. In total, there are 52 public ports of sea and river. With a coastline of 8.500 navigable kilometers, Brazil has a very large port sector that is responsible for more than 90% of the country’s total exports and imports.
The Brazilian port system is administrated by the Secretariat of Ports of the Presidency (SEP- PR) of the Ministry of Transport. The SEP-PR manages 34 of the public maritime ports, the other 18 are controlled directly by the Dock Companies, which are joint stock companies, whose major shareholder is the Federal Government. Therefore, they are still directly linked to the Secretariat of Ports.
Figure 33 Map of most important sea and river ports - Brazil
Main ports Operators
- The main port is Port of Santos, with a net income of $60 million USD (Y2012) and 1 468 employees. - Other important ports are: Port of Vitória, Port of Paranaguá, Port of Rio Grande, Port of Rio de Janeiro, Port of Itajaí, Port of São Sebastião, Port of Itaqui and Port of Aratu.
V. New Transport Modes
Most sharing economy ventures operate as smart phone applications, reason why the development of this sector will depend directly on the growth of number of smart phones users. In Brazil, it is expected that the number of users will reach the 86.8 million by 2021.
People, Name Location Category Description freight or Operator both? With availability 24/7, you can order a Dial-a-ride Uber National trip at any time of day, every day of the People transport year. Online payment. Drivers can end the trip anywhere in Urbano Car-sharing one of the 35 designated Home Zones São Paulo People Carsharing service in the city, for less than a traditional taxi. Allows you to call a private chauffeur for an even lower price than a taxi. National: 8 Dial-a-ride Cabify Cabify allows to select the type of People cities. transport vehicle (normal, for groups or corporative). Online payment. Operates only in São Paulo city. The system works through the smartphone, from which is possible to locate the cars Car-sharing Zaz Car São Paulo around the city, and rent them per People service hour-km. Is available 24/7. All cars are a Ford Ka model with a 1.0 motor - simple and reliable. National: With availability 24/7, you can order a Dial-a-ride Easytaxi more than trip at any time of day, every day of the People transport 24 cities year. Online payment.
VI. Transportation Authorities
The transportation authorities are the organizations, public or private, which regulates the transport ecosystem in the country, for both freight and people transportation.
People, Name Authority Location Category Description freight or both? Responsible for advising the Ministry of President of the Republic on the Transport, Ports National Ministry implementation and formulation of Both and Civil Aviation the country's transport, port and civil aviation policy. Secretariat of Responsible for the policy’s Government Ports of the National formulation and implementation of Both Institution Presidency (SEP- measures, programs and projects to PR) of the Ministry support the development of of Transport. seaports. Strategic planning.
Aeronautic authority under the Agência Nacional Government Ministry of Transport, Ports and Civil de Aviação Civil National Both Institution Aviation. Top direction of civil (ANAC) aviation. Regulates and monitor.
Responsible for implementing, administrating, operating and Government Infraero National operating the airport infrastructure Both Institution and air navigation support. Perform consulting and advisory services.
VII. System Integration Industry
Name Category Description Operator Ericsson co-innovates with clients to build connected transport infrastructure, create systems that best utilize data, and design Ericsson Technology automated processes. Serve road, rail, public transport and airports, with services of Urban transport connection, ICT Infrastructure and Integrated Mobility.
Indra has been present in Brazil since 1996. The company has over 7500 employees currently, headquarters in São Paulo and offices in Brasilia, Rio de Janeiro, Belo Horizonte, Fortaleza and Salvador, INDRA BRAZIL Technology among other cities. Indra has two software labs in Campinas and Goiania, and its activities include the Transport and Traffic, Utilities and Energy, Security and Defense, Telecommunication, Financial Services, Public Administration and Industry.
This company aims to promote sustainable social and economic development of cities, regions and businesses, with better quality freight and passenger transportation. Offers services as: Urban LOGIT Technology Transportation Planning, Urban Development, Regional Transportation Planning, Public Transportation, Logistic Chain Optimization, and Accessibility & Traffic Flow.
VIII. Transport System Development
The following are some of the current projects or future developments in order to improve the transport ecosystem.
National Logistics and Transportation Plan (PNLT)
At the end of 2006, the Brazilian government launched the National Logistics and Transportation Plan (PNLT), the result of a partnership between the Brazilian ministries of transportation and defense. The program was prepared by the Center for Excellence in Transportation Engineering (CENTRAN) and represents the guideline for investments in the logistic structure in the next 15 years in Brazil.
In this way, the PNLT considers as a vector the regional development, the reduction of inequalities and the integration of the Country, in a clear desire to fulfill, at least conceptually, some of the fundamental objectives and principles of the Federative Republic of Brazil present in the arts. 3 and 4 of the Constitutional Charter.
The PNLT provides the Brazilian transportation sector with a long-term strategic plan. The plan foresees a demand for investments totaling R$172.4 billion in transportation and logistics infrastructure [45] [46].
PNLT main objectives:
a) Identification, optimization and rationalization of the costs involved in the entire logistic chain adopted between the origin and destination of the transport flow.
b) Adequacy of the current matrix of cargo transportation in the country, seeking the permanent use of the modalities of greater productive efficiency.
Program of Investment in Logistics (PIL)
The objective of the PIL is to provide Brazil with a transportation system that reflects its continental size. The project will use an investment model that favors partnerships between public and private sectors. Concessions will be used for highway projects, while public-private partnerships will be developed for railway projects.
In June 2015, the Brazilian Government launched the second phase of this program to grant concessions for highway, airports, ports and railway investments. The program plans investments of up to US$52.2 billion in the form of concessions to the private sectors involved in the construction and operation of railroads, roads, ports and airports.
The main focus, in terms of volume of investments, is the country's railroad network, with investments of US$23.1 billion. Roads are the second most important area, with US$17.2 billion planned for investments, while ports and airports make up the remaining investment recipients, with planned investments of US$9.7 billion and US$2.2 billion, respectively [47].
MOVE Bus Rapid Transit (BRT) in Belo Horizonte City
Belo Horizonte launched on 2014 the MOVE bus rapid transit (BRT) system, which drastically improve urban mobility in the quickly growing city. Problem: today the city is home of 2.5 million people, while it was designed back in 1897 to hold just 100,000 inhabitants. This unplanned urban growth has created immense strain on the city’s infrastructure, including severe traffic congestion and air pollution.
Innovative solution: to improve Belo Horizonte’s transport system and make the city more livable, EMBARQ Brazil has worked with the city’s transport planners since 2010 to help launch a safe, reliable, and efficient MOVE BRT system. MOVE connects disparate parts of the city and travels five times faster than a car during rush hour. Offering both travel time savings and amenities like air conditioning and pre-paid boarding.
2.2.3. Chile
. General Information
Region South America Population [mln] 16,3 (annual growth: +1,04%) Area [km²] 756 102 km² Language Spanish Capital Santiago
Currency Peso (CLP) (1 U.S. dollars ≈ 664,798 CLP)
. Administrative Divisions.
Chile is divided into 15 regions, subdivided into 54 provinces. All regions are named with roman numbers originally assigned in conformity with the order from north to south; except for the Metropolitan Region of Santiago (RM) that has no designated roman number. The capital city is Santiago, also known as “Santiago de Chile” which has a population of 6’158’080 people, with a density of 435,58 inhabitants/km².
This country has a consolidated position as Latin America’s most competitive economy. This is mainly due to its sustained economic growth, political stability, and openness to trade.
. Economic and Social Situation.
This country is not only Latin America’s best evaluated economy but also one of the best emerging economies at international standard. Its level of stability, competitiveness, and excellent business prospects, position this country as a remarkable destination for foreign investment in Latin America and one of the world’s leading destinations. The UNCTAD, in its World Investment Report 2016, ranked Chile as the world´s 17th largest recipient of foreign direct investment.
The next table describes the important Indicators regarding the economic and social situation of the country.
Indicator Result
Logistic Performance Index 3,25 / 46°
Gross Domestic Product 240 / 2,30% (current US$ / annual percentage growth)
Final Consumption Expenditure 187 / 2,30% (current US$ / annual percentage growth)
Population in largest cities 36,30% (percentage)
Unemployment Rate 6,60% (percentage)
Inflation +3,8% (annual variation in percentage)
Table 10 Indicators regarding economic and social situation - Chile, 2016. Source: The World Bank.
. Politic Situation
The political form of governance in Chile is Republic Democracy, where the principal head of state is the President of the Republic. This country is organized around the executive, legislative and judicial branches of government. The President is the chief of state and head of Government, it is also the supreme commander-in-chief of the armed forces. The current President of Chile is Michelle Bachelet, since March 11, 2014.
The next graph describes the indicators regarding the political situation estimated by The World Bank. The range goes from -2.5 (weak) to 2.5 (strong) governance performance.
Figure 34 Political Indicators – Chile. Source: The World Bank (2016).
. Digital Situation
The following graph describes the indicators regarding the digital situation estimated by Statista Inc. Digital Market Outlook for 2016.
Figure 35 Indicators Digital Situation – Chile, 2016. Source: Statista Inc.
. Future expectations on Chile economy
Although the pessimist scenario for economy growth in Latin America for 2017, the International Monetary Fund determined positive numbers for Chile and Peru. This institution improves the growth of Chile’s GDP to 2.1% for the end of 2017. This is 0.1% more than previous projections. Another study, elaborated by the Latin-American Center of Economic and Social Policies of the “Pontificia Universidad Católica de Chile”, affirms that the capacity of growth of the Chilean economy will be around 2.6% to 3.8% for the year 2017; and the projection for 2020, will locate the growth in a range between 2.5% to 3.6 %. Other economists explain Chile’s slow growth with 3 main reasons: first, low demand of copper; second, narrowed financial conditions and third, a decrease in private investments and reduction in activities by the consumers. Also, other specialists talk about the volatility on the markets, the slowing down of the world trade and doubts for China and Europe economic development; as main factors that will affect Chile’s growth the next years.
Figure 36 GDP evolution and variations until 2020 - Chile [4]. Source: International Monetary Fund.
. Transport System Analysis
I. Transport Network Overview
On 2016, Chile has been considered one of the top leaders in Transport Infrastructure in Latin America by the World Economic Forum. Due to the geographic characteristic of Chile, the main transport mode that connects the country is by road with a network of 85.000km.
Rail transportation includes a network of 6.700km. Metro transportations are present only in main cities as: Santiago de Chile, Valparaiso and Concepción. Gondolas are also a common public transport mean.
II. Rail Transport System
Rail transportation include a network of around 8.000km, considering non-electrified and electrified ways. Metro transportation is present only in main cities as: Santiago de Chile, Valparaiso and Concepción. Other modes of transport in the country are: suburban, regional and touristic trains. Is important to mention also the gondolas as a public transport mean.
Railway Situation - The railway system covers 7.281km, all of which 3.853km is narrow gauge; and 1.691km of which is electrified. - 10 million tons of cargo travelled by rail each year, with a forecast to achieve 24 million tons by the year 2020. - Currently, 30 million of passengers use rail transportation. The master plan 2014-2020 forecasts 100 million of passengers that will be transported by rail tracks per year after finishing projects.
Companies and Market Size
- Most of the Chilean rail network is operated by the state-owned enterprise “Empresas de los Ferrocarriles del Estado”, known as EFE Group. This company has subsidiaries that operates all over the country. Offering services of people and freight transportation. They are also leaders in the rail transport for mining purpose. The actual number of employees is 1 339 people. - EFE operates separately the management of passengers and freight. The transportation of passengers occurs across the subsidiaries: Metro Regional de Valparaíso S.A., Trenes Metropolitanos Terra S.A. and Ferrocarriles Suburbanos de Concepción S.A. - The freight transportation service is performed by two main companies: FEPASA and TRANSAP, these companies operate since 1994 and the year 2000, respectively.
Railway Governance
Railway is regulated and authorized by Ministry of Transport and Telecommunication of Chile. The Ministry is integrated by the Subsecretary of Transport, the Subsecretary of Telecommunications, and the Aeronautical Civil Board. Additional, this Ministry functions as link between the Chilean Government and autonomous companies that operate in the sector, such as: Empresas de los Ferrocarriles del Estado S.A., Metro S.A., Correos de Chile S.A. and other 10 port companies.
III. Public Local Transport System
Due to the geographic characteristic of Chile, the main transport mode that connects the country is by road with a network of 85’000km. Some important public transport means are: buses, trolley buses and touristic buses. Other popular but private means are: taxis, carsharing and carpooling. Buses are now the main means of long distance but there are many different private operators. Public Local Transport Situation
The main development of the public transportation takes place in Santiago, the capital city, but it is also well developed in other important cities such as Concepción, Valparaiso, La Serena and Antofagasta. Is important to mention that Santiago is the only city with more than one million of inhabitants (6,5 million inhabitants in the last census).
Companies and Market Size - Most of the Chilean public transportation is operated by the state-owned enterprise “Empresas de los Ferrocarriles del Estado”, known as EFE Group. This company has subsidiaries that operate all over the country, offering services of people and freight transportation. EFE operates separately the management of passengers and freight. - Public transportation in Santiago city is operated mainly by: Metbus S.A. and Empresa de Transporte de Pasajeros Metro S.A. (Metro S.A.), companies part of the EFE Group.
Public Local Transport Governance
- Regarding public transportation, the Transport and Telecommunications Ministry acts as a link between the transport companies and the State. The Subsecretary of Transport, which is an association under the Transport and Telecommunication Ministry, is in charge of the control and supervision of the transport in Chile. - Another important institution is the Public Works Ministry, which acts through the department of: “Coordination of Concessions of Public Works” to perform the management of concessions: roads, rails, maritime or ports.
IV. Logistic Hubs and Ports System
The maritime transportation is mainly use for freight. From their more than 57 ports, the main ones are: San Antonio, Valparaiso and Antofagasta. Other minor ports are: Arica, Iquique, Punta Arenas and Mejillones. Ferry services are mostly use in the south of Chile to access places with limited connectivity. In addition, the cruise industry is also well positioned: in the session 2015/2016, the number of foreign visitors that arrived Chile, via cruise, was 439.705.
Regarding the ports situation, there are 57 active ports in Chile. From these, 31 are State-own and 26 are private. The country’s most important port is San Antonio, controlled by Empresa Portuaria San Antonio, with more than 18 million of ton transferred. The Port companies have as function the administration, exploitation, development and conservation of the ports and terminals. In total, the ports of Arica, Iquique, Antofagasta, Coquimbo, Valparaiso, San Antonio, San Vicente, Puerto Montt, Chacabuco and Punta Arenas transferred 45 million tons on 2016; this is 4.3% more than on 2015 [34].
Figure 37 Types of goods managed in Chilean Ports on 2015 [8]. Source: DIRECTEMAR Chile
The next figure shows the FOB value of the tonnage imported by all ports in Chile. As was mentioned before, the most important is San Antonio with a value FOB of around 16.000.000 thousand dollars.
Figure 38 FOB Value of the tonnage imported by Port [8] V. New Transport Modes
Most sharing economy ventures operate as smart phone applications, reason why the development of this sector will depend directly on the growth of number of smart phones users. In Chile, as in many other countries of Latin America, the number of users is continuously increasing. It is expected that the number of users will reach the 10,3 million by 2020, with an average annual growing of 8%. Latin America is expected to reach the 270,1 million users by 2020.
The next table shows the principle players in the Chilean’s sharing transportation, including global and local enterprises. People, Name Location Category Description freight Operator or both? First car sharing in Chile, in Santiago city. They offer different monthly fees starting from 0$. Their Awto Local Car sharing operations started on July, 2016. The company People offers rental of vehicles for a short period of time (maximum 6 hours). Formed by a group of young professionals motivated to realize a project that had a positive Nos impact in the community and environment. Local Car pooling People fuimos Carpooling portal is presented as a eco-friendly solution and a mean to meet people. Similar to Blabla car. App created by the union of taxi drivers. Created Dial-a-ride Hola Taxi Local to compete with bigger companies as Uber and People transport Easy Taxi.
Dial-a-ride Global company with strong presence in Latin Easy Taxi Global People transport America. Offer also solutions for Companies.
Dial-a-ride Global company with strong presence in Latin Cabify Global People transport America. Works only in 3 cities of Chile.
Dial-a-ride Global company. On 2016 Uber members Uber Global People transport exceeded the number of taxi drivers in Santiago.
VI. Transportation Authorities
The transportation authorities are the organizations, public or private, which regulates the transport ecosystem in the country, for both freight and people transportation.
People, Name Authority Location Category Description freight or both? Main function is to propose Transport and policies regarding transportation. Telecommunications Santiago Ministry The Ministry acts as a link between Both Ministry private transport companies and the State. Represents the aeronautic Civil Aeronautics Santiago Association authority. Exercise top direction of Both Association (JAC) civil aviation in Chile. It is under the Transport and Subsecretary of Telecommunication Ministry. In Santiago Association Both Transport charge of control and supervision of the transport in Chile. Economy, Formulate policies regarding the Promotion and Santiago Ministry traffic, transport and Both Tourism Ministry infrastructure
VII. System Integration Industry
System Integrator companies joining different subsystems (or components) in one large system. Their added value consist in all the multiple new functionalities provided by the system integrator. The next table shows the main players involved in the transportation industry.
Name Category Description Operator Indra Sistemas, S.A. is a Spanish information technology and defense systems company and is organized around three business areas: information technologies, simulation & INDRA Global automatic test equipment, and defense electronic equipment. Indra has been present in Chile since 1995 and has more than 700 professionals. Independent company focused on the development and TECSIDEL Global integration of advanced information systems. The headquarter is situated in Barcelona but the presence is international. With a 50-year history in the region, Thales employs close to 650 THALES Global people across Latin America. Thales also runs an In-Flight Entertainment Service Center in Chile.
VIII. Transport System Development
The following are some of the current projects or future developments in order to improve the transport ecosystem.
Transportation Master Plan Santiago 2025 (PMTS 2025) [35]
Chilean government has promoted a master plan to develop the planning of the metropolitan transportation for the city of Santiago de Chile. It involves all kinds of transport (Transantiago, Metro, highways, urban roads, bike lanes, sub-urban and regional trains, gondolas), and public and private institutions. This represents a guide for the management and the strategic investments in infrastructure that will define a system of urban transport orientated to satisfying the needs of mobility of people and goods in Santiago city, in the long term. It is also oriented to deal with the increasing level of congestion expected for the next years.
The plan implies a total investment of near 22.750 million dollars. The next graph explains the distribution of the investment by type of project:
Figure 39 Distribution of investments by type of project 2025 [9]
Project “Bicentenario” Cable Car [36]
This project is associated with the concept of a public transportation of quality, safety, silent and eco-efficient. It consists in a system of Cable Car (also known as Gondolas) that will connect, in a record time of 11 minutes, the two main business centers of Santiago city, that are: Sanhattan and Ciudad Empresarial. This model will be able to transport 6000 people per hour.
Phase: On construction, and expected to start operations by 2018.
Project: “Estación Intermodal”
It consists in the development of 3 important projects that aim to improve the multimodal integration, to increase the experience, to enable connection within different transport modes, and promote the use of public transportation in Santiago city.
Public Transport of High Standard Project in Antofagasta city
The investment of 275 M$ includes 12,9km of Gondola transport plus 17,2km of bus transport. Phase: Pre-feasibility Study.
Valparaiso city Project.
Include the investment of 66 M$ in a Gondola transport system, new metro stations, extensions of “Trole-buses” (trolleybuses in english) and a new Intermodal Station that will connect the system. Phase: Pre-feasibility Study.
Suburban Trains Project
Consist in a network of 88,1 km of suburban railways that will increase the Regional Metropolitan transportation between cities in the center of Chile: Santiago, Batuco, Quinta Normal, Malloco and Melpilla. Phase: Pre-feasibility Study.
2.2.4. Colombia
. General Information
Region South America Population [mln] 49,12 (annual growth: +1,3%) Area [km² ] 1 141 748 km² Language Spanish Capital Bogota
Currency Peso ($ COP) (1 U.S. dollars ≈ 2 894,14 COP)
. Administrative Divisions
Colombia is located in the north zone of South America, with an area of 1,14 million km², it occupied the position #26 of the biggest countries worldwide. Geographically, Colombia is divided into 32 departments and 1 capital district. The capital city is Bogota, located in the center of the country. This city has a population of 8,0 million people, concentrating the 16% of the total population. The income per capita in this city is around $17.500 USD (year 2014).
. Economic and Social Situation
Despite decades of internal conflict and drug related security problems, nowadays Colombia has relatively strong democratic institutions characterized by peaceful, transparent elections and the protection of civil liberties. Their competitive advantage is based on the government’s changes in:
- Economic policy priorities: including the promotion of more stable and inclusive growth, formal job creation and programs to address long term social problems.
- Investments: is now focused on addressing social and infrastructure problems, for the reduction of high levels of poverty and boost of competitiveness and trade links.
- Macroeconomic policies: focused on maintaining the stability by improving the country’s fiscal position (mainly through a structural fiscal reform approved in 2011) and consolidating the monetary policy.
Indicator Result
Logistic Performance Index 2,61 / 94°
Gross Domestic Product 292 / 3,08% (current US$ / annual percentage growth)
Final Consumption Expenditure 238 / 4,26% (current US$ / annual percentage growth)
Population in largest cities 42,8% (percentage)
Unemployment Rate 9,90% (percentage)
Inflation +7,52% (annual variation in percentage)
Table 11 Indicators regarding economic and social situation in Colombia, 2016. Source: The World Bank.
. Politic Situation
The political form of governance in Colombia is unitary presidential constitutional republic, where the principal head of state is the President of the Republic. This country is organized around the executive (conformed by the President and ministers), legislative and judicial branches of government. The President is the chief of state, head of Government and it is also the supreme commander-in- chief of the armed forces. The current President is Juan Manuel Santos, since August 7, 2010. The next graph describes the indicators regarding the political situation estimated by The World Bank. The range goes from -2.5 (weak) to 2.5 (strong) governance performance. Figure 40: Political Indicators – Colombia. Source: The World Bank (2016).
. Digital Situation
The following graph describes the indicators regarding the digital situation estimated by Statista Inc. Digital Market Outlook for 2016.
Figure 41: Indicators Digital Situation – Colombia, 2016. Source: Statista Inc.
. Future expectations on Colombia’s economy
Colombia is the third most populous country in Latin America and the fourth largest economy in the region.
Economic environment. The GDP in 2015 was US$292.08 billion. A strong expansion in public spending and investment should lift GDP growth to an average of 4.5% annually between 2015–2018, reflecting lower unemployment and efforts to increase productivity. In addition, the median Figure 42 GDP Grow evolution 2008 to 2018 – Colombia. Source: household income is expected to KPMG increase to US$ 15,996 by 2017. As it’s possible to appreciate on the graph, Colombia’s GDP growth was highly affected by the global crisis between the years 2008 and 2009. Nevertheless, we see stably growth in the recent years of 4.5% on average. Foreign direct investment (FDI). It is expected to reach the US$19.9 billion in inbound and the US$3.2 billion in outbound. Exports and Imports. It is forecasted to reach the US$70.9 billion by 2018 on Exports free on board (FOB), and the US$66.2 billion by 2018 on Imports FOB. Sector breakdown. Mostly services: 55.5%; from which industrial is 37.9% and agriculture 6.6%.
. Transport System Analysis
I. Transport Network Overview
The main three highways are the Caribbean, Eastern, and Central Trunk.
This country has well-developed air infrastructure and routes. Highways are managed by the Colombian Ministry of Transport through the National Roads Institute. All public airports in Colombia are managed and controlled by the Special Administrative Unit of Civil Aeronautics. Rail transport in Colombia remains underdeveloped. Seaports handle around 80 percent of international cargo. In 2005 a total of 105,251 metric tons of cargo were transported by water.
II. Rail Transport System
The national railroad system, was once the country's main mode of transport for freight but nowadays has been neglected in favor of road development. Although the nation's rail network links seven of the country's 10 major cities, very little of it has been used regularly because of security concerns, lack of maintenance, and the power of the road transport union.
Railway Situation
- Rail transport in Colombia remains underdeveloped. - The country position for comparison to the world is 70°, from 136 countries. - Passenger-rail use was suspended in 1992 and resumed at the end of the 1990s. However, only 458 619 passenger journeys were made in 2015 in the country. - Rail freight movement is significant in the case of coal, but low in general cargo. In 2009, nearly 60 million tons of coal compared to only 250 thousand of general cargo.
Companies and Market Size
- The market is mostly represented by the company FENOCO S.A. (Ferrocarriles del Norte S.A.), and in low percentage by Sociedad Ferrocarril del Oeste S.A. and Ferrocarril del Pacifico S.S.A. - Another minor company that can be considered is Turistren which only operates for the touristic sector.
Railway Governance Railway is regulated and authorize by the Ministry of Transportation. Is the only institution which can introduce modifications to the Rail General Regulations. The competent authorities are: - La Agencia Nacional de Infraestructura – ANI. Represents the National Agency of Infrastructure, operates under the Ministry of Transport. Has as objective the planning, coordination, structuring, management and evaluation of concession projects and other forms of PPA (Public Private Associations). - INVIAS. The National Railways Institution. - The Ministry of Energy and Mines.
III. Public Local Transport System
Public Local Transport situation - Urban transport systems have been developed in big cities as Bogotá, Medellin, Cali and Barranquilla. - Traffic congestion problems specially in Bogotá has been alleviated by the development of one of the world's largest and highest capacity Bus Rapid Transit (BRT) Systems, known as the TransMilenio and the restriction of vehicles through a daily, rotating ban on private cars depending on plate numbers. The TransMilenio operates since the year 2000.
Companies and Market Size - The urban transport in Colombia has been traditionally handled by a great quantity of business ventures centralized in the big cities. The Government institutions assign routes to the different companies, which serve them with a variety of type of vehicles as buses, “busetas”, “minibuses” or “colectivos”. - In the year 1980, the underground metro system was constructed in the city of Medellin, being the only city in Colombia where this type of service operates.
Public Local Transport Governance - Ministry of Transport Ministry. Regarding public transportation, it acts as a link between the transport companies and the State. - District Secretariat of Mobility. Acts as an authority in transportation and transit. Define policies and perform activities of control and regulation. - Institute of Urban Development. Is a public decentralized institution created by the Mayor’s Office of Bogota. Manages the urban development of the city and executes works related with massive transportation projects.
IV. Logistic Hubs and Ports System
Hubs and Port situation - Due to the coasts in both Atlantic and Pacific oceans, and its geographical linking position between Central and South America, Colombia has an advantageous position within the Latin - American region for sea freight transport. - The main seaports are in concession and the operational efficiency has improved significantly since the Government’s reform in this matter. However, there is still room for further improvements as there is not enough development in term of intermodal transportation and intermodal stations. - The most important ocean terminals are Barranquilla, Cartagena, and Santa Marta on the Caribbean Coast and Buenaventura and Tumaco on the Pacific Coast.
Main ports Operators - Organización Puerto de Cartagena. Organization conformed by the Sociedad Portuaria de Cartagena (SPRC) and the Terminal de Contenedores de Cartagena (CONTECAR). Revenue ≈ $230 million USD for operations during 2008. - Sociedad Porturaria Buenaventura. Revenue ≈ $249 million USD for operations during 2008. - Sociedad Porturaria Puerto de Barranquilla. Revenue ≈ $86 million USD for operations during 2008 [48].
V. New Transport Modes
Most sharing economy ventures operate as smart phone applications, reason why the development of this sector will depend directly on the growth of number of smart phones users. In Colombia, it is expected that the number of users will reach the 26 million by 2020.
People, Name Location Category Description freight Operator or both? Sport and recreation institution. Dial-a-ride Promotes the use of bike-ways around IDRD Bogota People transport the city and other projects regarding this mean of transportation.
Operates in 19 Dial-a-ride Platform that allows to communicate Uber People Colombian cities transport users with drivers.
Operates in 9 Dial-a-ride Platform that allows communicate Tappsi People Colombian cities transport taxis with users
Operates in 21 Dial-a-ride Platform that allows communicate Easy Taxy People Colombian cities transport taxis with users.
Offers a short-term rental car sharing. Car b Bogota Car sharing People Operates only in the city of Bogota.
VI. Transportation Authorities
The transportation authorities are the organizations, public or private, which regulates the transport ecosystem in the country, for both freight and people transportation.
People, Name Authority Location Category Description freight or both? Main function is to propose policies Ministry of regarding transportation. Ministry acts Bogota Ministry Both Transport as a link between private transport companies and the State. Agencia Nacional Has as objective the planning, coordination, structuring, de Transport Bogota management and evaluation of Both Infraestructura Association concession projects and other forms of (ANI) PPA (Public Private Associations). Superintendencia Perform the vigilance, inspection and Transport de Puertos y Bogota public control of the service of Both Association Transporte transport, its infrastructure and related services in all means inside the logistic chain of the transport. Urban Development Institute. Instituto de Performs the construction and Transport Desarrollo Bogota maintenance of the bike-routes, Both Association Urbano - IDU platforms, footbridges, zones under bridges, avenues and squares. Civil aeronautic authority under the Transport Ministry. Top direction of Aviation Aeronáutica Civil Bogota civil aviation. Regulates and ensure the Both
Association aviation industry and the safe use of its airspace.
VII. System Integration Industry
Name Category Description Operator Bogota, SITP Integration system between Trasmilenio and SITP buses. Colombia Global company, founded in 1979, have clients in more than 26 Montreal, countries. Their specialized tool is named HASTUS, a powerful modular GIRO Inc. Canada solution for bus, metro, tram, and rail scheduling and operations. Optimizing the planning, analysis, Scheduling and daily operations. GMV Global company, founded in 1984. This is a company specialized in design, development, manufacturing and marketing of ticket-vending Innovating Spain. and fare collection systems. Offers solutions for road, rail and maritime Solutions transportation and other special fleets.
VIII. Transport System Development
The following are some of the current projects or future developments in order to improve the transport ecosystem.
Elevated Metro Project for Bogota
With an expected population of 8.3 million people for 2020, Bogota city is preparing its infrastructure for this continuous growth. Nowadays is under studies the building of a metro that will be integrated with the current transportation system (Transmilenio and SITP).
Some important facts:
- The first line of the Metro has been designed under parameters of clean energy and environmental efficiency. It will operate with light and natural ventilation, which represents very important savings in the phases of works and operation, without impacts for the planet. This first line will have a length of 25.29km. - Phase of the project: under feasibility studies. The construction has not started. - According to the plans, the operation of the metro will start by the year 2022, and will have 23 trains. - Future plans to build about 4 highways in the city could improve the high density of traffic in the city [49].
Figure 43 Future Metro Design - Colombia
2.2.5. Mexico
. General Information
Region North America Population [mln] 112,5 (annual growth: +1,3%) Area [km² ] 1 964 375 km² Language Spanish Capital Ciudad de México – Mexico City
Currency Peso ($ MXN) (1 U.S. dollars ≈ 18,24 MXN)
. Administrative Divisions
Mexico is located in southern North America, with an area of 1,96 million km², it occupied the position #14 of the biggest countries worldwide. Geographically, is divided into 32 federative entities (31 States and the capital city, Ciudad de México). The climate is tropical in the south, temperate in the highlands and dry in the north.
The capital city is Mexico City - Ciudad de México, with a population of 20,1 million people, concentrating the 18% of the total population. The GDP per capita in this city is around $26 229 USD (Y2016), much higher than the national GDP per capita $10 326 USD (Y2014).
. Economic and Social Situation
In Mexico, the service sector accounts for the 62% of the total GDP. The most important segments in this sector are: wholesale and retail trade (16%), real state (10%), transportation, warehousing and communications (7%); and financial and insurance (6%). The Mexican economy has remained resistant although global crisis. Consumer spending has contributed to the growth in the past 2 years, pulled by a strong labor market and credit expansion. Inflation has risen temporarily, due to the depreciation of the Peso and the variability of gasoline prices [50].
Indicator Result
Logistic Performance Index 3,11 / 54°
Gross Domestic Product 1143,8 / 2,46 % (current US$ / annual percentage growth)
Final Consumption Expenditure 908 / 0,55 % (current US$ / annual percentage growth)
Population in largest cities 37,4 % (percentage)
Unemployment Rate 4,00 % (percentage)
Inflation +2,82 % (annual variation in percentage)
Table 12 Indicators regarding economic and social situation in Mexico, 2016. Source: The World Bank.
. Politic Situation
The political form of governance in Mexico is Federal Republic Government, where the principal head of state is the President of the Republic. This country is organized around the executive, legislative and judicial branches of government, which work independently in their respective spheres. The federal system is constituted by the thirty-one states and one federal district. The President is the chief of state and head of Government, it is also the supreme commander-in-chief of the armed forces. The current President is Enrique Peña Nieto, since December 1, 2012.
The next graph describes the indicators regarding the political situation estimated by The World Bank. The range goes from -2.5 (weak) to 2.5 (strong) governance performance.
Figure 44: Political Indicators – Mexico. Source: The World Bank (2016). . Digital Situation
The following graph describes the indicators regarding the digital situation estimated by Statista Inc. Digital Market Outlook for 2016.
Figure 45: Indicators Digital Situation – Mexico, 2016. Source: Statista Inc.
. Future expectations on Mexico economy
Expected growth of Mexican economy
After decelerating in late 2016, the economic activity is projected to pick up, mainly reflecting stronger exports. Improved business confidence will support the upturn in investments; and the consumer’s spending, the engine of growth in the past two years, will grow at a slower pace. According to the World Bank, Mexican GDP is expected to growth annually by 2,46%.
Macroeconomic policy stability
From 2013, the government is committed to a Fiscal Consolidation Plan to reduce the budget deficit. The budget deficit is measured by the public sector borrowing requirement, which objective was to reduce by 2% points of GDP over four years; and actually, is projected to fall to 1.4% GDP in 2017, and a primary surplus is expected to be attained for the first time since 2008. However, there is still complications to make the tax and transfer system more redistributive, in this matter, lowering tax avoidance would raise additional revenues that could be used to further strengthen social spending and eliminate extreme poverty.
Monetary policy, GDP and inflation
Peña Nieto Government’s monetary policy 5.56 has been tightened to avoid second-round effects from the $ Peso depreciation and the adjustment of gasoline prices early in 2017, with the aim of keeping inflation 4.07 expectations controlled and pushing inflation back to the target range of 1 to 3%. Although the actual inflation rate is 2.82%, this stability is recently. The next graph shows Mexico’s 2.58 inflation evolution in the past 10 years.
Figure 46 Inflation Evolution 2006 to 2016 - Mexico. Source: World Bank
. Transport System Analysis
I. Transport Network Overview
The transportation system in Mexico is regulated by the Secretariat of Communications and Transportation (“Secretaría de Comunicaciones y Transportes” – SCT) a federal executive cabinet branch. Is important to mention that during the 15 years, Mexico’s foreign trade policy has strategically focused on establishing strong commercial alliances with other countries; alliances that placed the country as a major player in foreign markets.
The Mexican government has negotiated 9 free trade agreements which provides preferential entry to more than 40 international markets.
II. Rail Transport System
Rail transportation includes a network of 17 787 km. The railway system provides freight and passenger service throughout the country, although most part of the service is for freight transportation. The rail network connects the major industrial centers with ports and with rail connections at the United States border. Passenger rail services were limited to a number of tourist until 2008 when was inaugurated Mexico's first regional train service between Mexico City and the Estado de Mexico.
Railway Situation
- The railway system covers 17 787km, of which 27 km are electrified. - The country position for comparison to the world is 18°. - The freight railway system is owned by the government and operated by various entities under concessions. - Passenger rail services is limited, most railway system is used to transport freight.
Figure 47 Railways Map - Mexico
Companies and Market Size The only representative company for people transportation is Ferrocarriles Suburbanos. This project was obtained as concession by the company Construcciones y Auxiliar de Ferrocariles SA (CAF). Is the first one in using the railway massive transport for passengers in Mexico, and represents a joint effort headed by the Federal Government, across the Secretariat of Communications and Transport, together with CAF Mexico to connect Mexico City and of the State of Mexico.
Railway Governance Railway is regulated and authorize by the Secretariat of Communications and Transport of Mexico. The Law of Regulation and Railway Service established the norms and regulation parameter to railway national transportation. The competent authorities in the railway activity are: - Secretariat of Communications and Transport, only authority that can introduce modifications to the Rail General Regulations. - Federal Governments - Regulatory Agency of the Railway Transport, institution decentralized from the Secretariat. Mexican Association of Railways (“Asociación Mexicana de Ferrocarriles” – AMF). Promotes technical studies and researches. Represents an organ for consultation and collaboration of the State for the design and the execution of policies of railway transport.
III. Public Local Transport System
Public Local Transport situation
- Most development of urban transportation takes place in the capital, Mexico City, where is possible to find Metro, with 12 operative lines and 3.9 million passengers transported per day; Metrobus with 7 operative lines and 190 stations; public buses known as microbuses or combis; Trolebus with 8 operative lines and electric light trains with 16 stations. - There are other cities with important urban transportation development. Monterrey where is present the electric light train with 2 lines and 32 stations; on 2008 it transported 88.3 million of passengers. The other city is Guadalajara, where is also present the electric light train with 2 lines and a total of 29 stations.
Companies and Market Size
- The “Sistema de Transporte Colectivo” – STC as a public organism is the only company who manages and operates the metro in Mexico City. The Metrobus, also operates as a public organism. - The market of bus transportation is form by many small companies who has the concession of the bus routes (106 routes in Mexico City), this mean is characterized by an overload number of units operating in routes that has expand without an adequate planning.
Public Local Transport Governance
The urban transportation is regulated and authorize by the Secretariat of Communications and Transport of Mexico, acting as a link between the transport companies and the State.
IV. Logistic Hubs and Ports System
Hubs and Port situation
The maritime transportation is mainly use for freight. In total, there are 117 ports, from which 58 are controlled by an API – “Administración Portuaria Integral” (Integral Port Administration), and the others by the Central Sector.
Figure 48: Main Sea Ports – Mexico. Source: Secrtary of Transport and communication
Main ports Operators
- Port of Lázaro Cárdenas (Pacific Ocean) is located at 863km from Mexico City. The revenues for the operations in this port during the year 2016 rounded the $70 million USD. - Port of Veracruz (Gulf of Mexico) is located on the south-central coast, at approximately 400km from the capital. Veracruz is closer to car manufacturers and has better access to both import and export markets in the U.S., Europe, Central and South America than other Mexican ports. In 2004, the port handled 70% of the automobiles exported. - The ports of Lázaro Cárdenas, Manzanillo and Veracruz present the highest activity of freight movement comparing to other important ports of Mexico.
Figure 49 Freight Transportation in commercial ports during 2010 - Mexico. Source: Trade & Logistics Innovation Center of Monterrey
V. New Transport Modes
Most sharing economy ventures operate as smart phone applications, reason why the development of this sector will depend directly on the growth of number of smart phones users. In Mexico, it is expected that the number of users will reach the 72.4 million by 2021.
People, Name Location Category Description freight Operator or both? With availability 24/7, you can order a Present in 14 Dial-a-ride Uber trip at any time of day, every day of the People cities. transport year. Online payment. Allows you to call a private chauffeur for an even lower price than a taxi. Cabify Present in 8 Dial-a-ride Cabify allows to select the type of vehicle People cities. transport (normal, for groups or corporative). Online payment. Car sharing service with fuel and Carrot Mexico City Car sharing insurance included, it is needed to People booking in advance. Online payment. With availability 24/7, you can order a Present in 8 Dial-a-ride Easytaxi trip at any time of day, every day of the People cities. transport year. Online payment.
VI. Transportation Authorities
The transportation authorities are the organizations, public or private, which regulates the transport ecosystem in the country, for both freight and people transportation.
People, Name Authority Location Category Description freight or both? This ministry regulates, programs, Secretaría de orients, organizes, controls, impulse the Government movilidad National urban mobility in Mexico City, having as Both Ministry Mexico City pillars the user’s safety and environmental awareness. Direccion Ensure that air transport participates in the process of sustainable growth, general de Government National which contributes to social welfare, Both
Aeronautica Ministry regional development and the Civil generation of jobs. Consejo de This entity represents the preservation Government of national sovereignty and Seguridad National Both Ministry independence and the defense of the Nacional territory. Main entity that regulates and promotes transportation projects in Mexico. Promotes the efficient transport and Secretaría de communication system through the Government Comunicaciones National strengthening of the juridical frame, the Both Ministry y Transportes definition of public policies and the design of strategies that contribute to the sustainable and social balanced growth of the economy.
VII. System Integration Industry
Name Operator Category Description Asociación Sustainable organization to qualify, standardize and Latinoamericana de Association disseminate the Integrated Urban Mobility Systems. sistemas integrados BRT Medium-size business integrator focused on the CEVA Technology transportation industry. Ryder is the industry leader in truck rental, fleet Ryder Mexico Solutions Technology management and supply chain solutions for businesses of all sizes.
Penske Logistics Mexico is a leader for solutions for Penske Logistics Mexico Technology supply chain in Mexico for a variety of industries.
Calypso is the leading provider of front-to-back CALYPSO Technology technology solutions for the financial markets.
VIII. Transport System Development
The following are some of the current projects or future developments in order to improve the transport ecosystem.
The Interurban Passenger Train Toluca-Valle de México
The Passengers' Intercity Toluca-Valley of Mexico is a project of the Federal Government that will connect the Metropolitan Zone of Toluca's Valley with the west one of the Mexico City.
Also known as Interurban Train Mexico - Toluca is a project in construction of long-distance and medium-speed (160 km/h) rail. It was initially announced on December 1, 2012 by Mexican President Enrique Peña Nieto as part of several railroad infrastructure projects. This rapid and comfortable way of transport will give service to 230 thousand passengers a day. It will have a total length of 57.7 km and 6 stations.
Status: under construction. It is expected to start operations on 2018.
Figure 50 Design of a future Interurban Train Station. Source: Tren Interurbano CDMX
Figure 51 Project's Trip Estimations. Source: Tren Interurbano CDMX.
Intelligent Urban Mobility Plan for Mexico City
Actual problematic situation: The public policies of urban mobility adopted until now in Ciudad de México city haven’t been sufficient to reduce the economic externalities, environmental and social impacts, and the lack of urban planning.
The project of Intelligent Mobility in the Mexico City seeks to facilitate the adoption of strategies for the management of information and the implementation of new technologies to make the transport system more secure, efficient and sustainable [51].
With an efficient management of this information, it’s possible to creation of descriptive and predictive analysis, which have a direct impact in the solutions of urban mobility.
a. Strategy 1: Improve the management of information of the Government. b. Strategy 2: Create an integrated system of transport. c. Strategy 3: Create a system of management of mobility information
2.2.6. Peru
. General Information
Region South America Population [mln] 31,15 (annual growth: +1,29%) Area [km² ] 1,285,216 km² Language Spanish Capital Lima
Currency Sol (S/ PEN) (1 U.S. dollars ≈ 3,28 PEN)
. Administrative Divisions
Peru, located in the inter-tropical zone in South America, has an area of 1,3 million km², and it occupies the position #20 among the biggest countries worldwide, and the #3 in the region.
Since its independence in 1821, Peru had been divided into departments but, because the problem of an increasing centralization of political and economic power in its capital, Lima, the legal figure of regions became official and regional governments were elected to manage the departments on 2002. Unlike the earlier departments, regions have an elected government and have a wide array of responsibilities within their authority. Under the 2002 Organic Law of Regional Governments there is an ongoing process of transfer of functions from the central government to the regions. Figure 52 Map of Peru with administrative divisions. . Economic and Social Situation
Peru has a consolidated solid position in Latin America. Inflation in 2012 was the lowest in the region, but increase these last year as oil and commodity prices rose. Also, the unemployment rate has fallen steadily in recent years. It is also the 39th largest economy in the world by total GDP. The World Bank classifies this country as upper middle income. The basis of the current economic performance is a combination of Macroeconomic stability, prudent fiscal spending, high international reserve accumulation, external debt reduction, achievement of investment grade status and fiscal surpluses. Peruvian economic performance has been pulled by exports, which provide hard currency to finance imports and external debt payments. [30]
Indicator Result
Logistic Performance Index 2,89 / 69°
Gross Domestic Product 189 / 3,25% (current US$ / annual percentage growth)
Final Consumption Expenditure 148 / 3,76% (current US$ / annual percentage growth)
Population in largest cities 31,5% (percentage)
Unemployment Rate 4,95% (percentage)
Inflation +4,9% (annual variation in percentage)
Table 13 Indicators regarding economic and social situation in Peru, 2016. Source: The World Bank. . Politic Situation
The political form of governance in Peru is Republic Democracy, where the principal head of state is the President of the Republic. This country is organized around the executive, legislative and judicial branches of government. The President is the chief of state and head of Government and he is also the supreme commander-in-chief of the armed forces. The current President of Peru is Martín Alberto Vizcarra, since March 23, 2018. The next graph describes the indicators regarding the political situation estimated by The World Bank. The range goes from -2.5 (weak) to 2.5 (strong) governance performance.
Figure 53: Political Indicators – Peru. Source: The World Bank (2016). . Digital Situation
The following graph describes the indicators regarding the digital situation estimated by Statista Inc. Digital Market Outlook for 2016.
Figure 54: Indicators Digital Situation – Peru, 2016. Source: Statista Inc.
. Future expectations on Peru economy
Recent publications of the International Monetary Fund – IMF (2017) situate Peru and Colombia with the strongest GDP growth in the region. The IMF has raised the projection of growth of the Peruvian economy up to 4.3 % for 2017, opposite to the previous 4.1%. This growth will be pulled by: the increase of international prices of the copper, the increase of public expenditure and the increase of the market dynamism and strong expenditure of consumers. Alejandro Figure 55 GPD evolution in Peru from 2005 to 2015. Source: Werner, director of the Department of World Bank the Western Hemisphere of the IMF, suggested that the attention should centered now on a fiscal gradual consolidation, but also preserving the expense in public infrastructure. In addition, other important points to focus to increase and maintain growing results are about working on the decrease of the informality, the improvement of the level of education, the development of capital markets and the reduction of the bureaucratic procedures [37].
As it is possible to appreciate on the graph, Peru’s GDP has always been over the Latin America average growth. Although the international crisis on the 2008-2009, Peru has always maintained a positive GDP growth [30].
. Transport System Analysis
I. Transport Network Overview
The lack of comprehensive policies has extensive economic, ecologic and social implications, especially in Lima and Callao, where:
- Transit times are expected to almost double until 2025 (compared to 1990). - The average travel speed by car is of 14 -16 km/h. - Approximately 120000 licensed taxis (plus around the same number of unlicensed taxis) are interfering with other traffic by frequent stops, on-street price negotiations due to missing meters and slow speed. - Around USD 200 million have been spent in the period of 2004-2013 due to traffic accidents, with a daily casualty rate of 12 persons due to road accidents. - Over the same period (2004-2013) around 483.000 persons (132 per day) have suffered injuries that led to physical disabilities of varying degrees. - The vehicle fleet (public and private) has an average age of 14 years and a significant number of vehicles have more than 20 years. - Traffic management systems are outdated and frequently fail to function, resulting in daily interventions by the police attempting to keep the traffic flowing.
Modal split in the metropolitan area of Lima and Callao
Figure 56 Model split in the metropolitan area of Lima and Callao. Source: JICA (2013)
The main characteristic of Peru that conditions the development of road, train or maritime transportation it’s the difficult, varied and rugged geography. From the coast to the towering mountains of the Andes and the jungle, Peru is known for having almost all ecosystems in one territory. With more than 78.000 km of highways, the principal mean of transport in Peru is by road, both for public and private transportation. By road is possible to reach almost every corner of this country.
II. Rail Transport System
Rail transportation is very limited: 1.854km of extension. From which 1.730km are standard gauge, and only 34km are electrified. The electrified rail corresponds to the Line 1 Metro in Lima. Principally, rail is used for freight transportation (minerals) and tourism. Important to underline is the fact that Lima city is the only one where is possible to find a Metro: although the project started in 1986, because of political and bureaucratic problems, the service hasn’t been available until 2012 when the activity of Line 1 officially started. The Line 2 is under construction.
Railway Situation
- The railway system covers 1.854km, of which 1.730km is standard gauge and only 34km is electrified. - The railway park consists in 2.423 vehicles, of which 88% are freight wagon. - In 2015, the traffic of passengers (including touristic trains) has been of 2,6 million people, demonstrating more than 70% compared to passengers transported 10 years before.
Figure 57: Rail Park in Peru by type of vehicles from 2004 to 2015. Source: Empresas Ferroviarias
Companies and Market Size
- The main company holding railways concession is Ferrocarril Transandino, which operates 989 km performing 7 routes in the center and south of Peru. The second most important company is Ferrocarril Central Andino S.A., which operates on 489 km transporting both people and freight. - Only 188,7 km are operated by public entities: 128,7km by the Transport and Communication Ministry and 60 km operated by Regional Governance of Tacna. - The private sector operates 238,6 km of rails, which are owned by most important mining companies: Cemento Andino, Southern Peru Copper Corporation and Votorantim Metais.
Railway Governance Railway is regulated by Ministry of Transportation and Communication of Peru. The Supreme Decree N°032-2005-MTC is the official document which gives regulation to railway national transportation. The competent authorities in the railway activity are: - The Ministry of Transport and Communication. - OSITRAN. Represents the supervisor of the investment in public transport infrastructure. - Regional Governments - Local Governments - The PNP: Peruvian State Police - INDECOPI. Represents the National Institute of Competition Defense and Protection of the Intellectual Property. - All other activities or competences that are not expressly assigned to a certain institution, will correspond to the Ministry of Transport and Communications to act as authority.
III. Public Local Transport System
The principal mean of transport in Peru is by road, both for public and private transportation. By road is possible to reach almost every corner of this country. This goes hand by hand with a well- developed bus transport private industry, which presents high competition, premium services and war price.
Public Local Transport situation - Main development and future projects are focus on Lima city, that is also the only city with more than 1 million of inhabitants (8,89 million inhabitants). - Although the high concentration of people, the metro systems only operates by the Line 1; Lines 2 and 4 are under construction; and Lines 3, 5 and 6 are still on project phase. - Other options, besides public transportation, operates in Lima, these are for example: taxis and vans that are very utilized in day to day transportation. - Also, companies of dial-a-ride systems have increased rapidly its popularity due to the inefficient public system and the dissatisfaction of the users.
Companies and Market Size - The actual market size is represented by more than 300 transport companies and 25’500 vehicles [39]. - There is a high concentration of the revenues in 17 companies through the operation of 427 routes. No company reaches the 1 million dollars in revenues [40].
Public Local Transport Governance - Regarding public transportation, the Transport and Communications Ministry acts as a link between the transport companies and the State. - There are many small public transport companies that the State must conciliate with. Driver’s unions and syndicates have much power and complicates the implementation and development of new projects. IV. Logistic Hubs and Ports System
Hubs and Port situation - The maritime transportation is mainly uses for freight. In total, there are 56 ports from which 33 are maritime, 20 are fluvial and 3 are lacustrine ports. - The most important is Callao Port which is located 15km from Lima city center; other important maritime ports are Matarani and Paita. Callao Port is operated by APM Terminal, who operates the northern terminal and DP World, who operates the southern terminal. - ENAPU S.A. is other important port operator owned by the State. This institution operates 8 ports, among maritime and fluvial ports.
Main ports Operators
- APM Terminal. Revenue ≈ USD $117,6 million for operations on Callao Port Y2015. - DP World. Revenue ≈ USD $ 137,3 million for operations on Callao Port Y2015. - ENAPU S.A. (State Operator). Revenue ≈ USD $ 9.34 million on Y2015. - Other minor.
V. New Transport Modes
Most sharing economy ventures operate as smart phone applications, reason why the development of this sector will depend directly on the growth of number of smart phones users. In Peru, as in many other countries of Latin America, the number of users is continuously increasing. It is expected that the number of users will reach the 12.9 million by 2020, with an average annual growing of 15%. Due to the concentration of inhabitants in Lima city, most sharing-transportation companies operate in this city. To the date, it’s possible to find 8 different dial-a-ride companies that operates by smartphone apps.
People, Name Location Category Description freight Operator or both?
Lima and Dial-a-ride Offers also a service of car pooling for users to Uber People Arequipa transport share cost with others. Lima and Dial-a-ride Easy Taxi other 5 Between main companies. People transport cities Taxi Dial-a-ride Originally they worked with only a call center. Lima People Satelital transport Now they offer services also through their app
Dial-a-ride Between main companies. Presence only in Cabify Lima People transport Lima. Green Consultant & Marketing company that has implemented a car pooling platform for B Green Lima Car pooling companies. It is not an open app. This service People is offered only for companies and their employees. Free service, it can be only use by people who Bici en lives in San Borja district (Lima). Has 12 Lima Bike Sharing People Ruta stations but not automated. There is an employee that manage each station.
VI. Transportation Authorities
The transportation authorities are the organizations, public or private, which regulates the transport ecosystem in the country, for both freight and people transportation.
People, Name Authority Location Category Description freight or both? Ministry of Responsible for developing and Transport and Lima Ministry implementing sector policy and Both Communication programs. (MTC) MVCS is the governing entity in Urbanism and Urban Development, Ministry of Housing, and has recently been assigned by Construction Lima Ministry Law N° 30156 the competence of Both and Sanitation urban mobility with the objective to (MVCS) treat the issue of urban transport in an integral manner.
Ministry of Foreign Defines, executes and control policies Lima Ministry Both Trade and Tourism of the sector.
Plays a prominent role in the planning, construction and management of the Metro network Transport AATE Lima and in integrated ticketing. The People Association Ministry acts as a link between private transport companies and the State. Supervise, control and sanction activities of people, load and goods Transport SUTRAN Lima transportation. Operates under the Both Association Ministry of Transport and Communication. Authority and management of main Transport CORPAC Lima airports in Peru. Operates under Both Association supervision of the Government. Transport Authority and management of main APN Lima Both Association maritime ports in Peru. Operates under supervision of the Government.
Organism supervisor of the Investments in Infrastructure and Transport OSITRAN Lima Transport of Public Use. Represents Both Association the technical regulator to ensure the efficiency of the transport services.
VII. System Integration Industry
System Integrator companies joining different subsystems (or components) in one large system. Their added value consist in all the multiple new functionalities provided by the system integrator. The next table shows the main players involved in the transportation industry.
Name Operator Category Description
Supply Chain and Technology. Headquarter in Chile, Southern Technology Peru and with offices in Peru. Business integrator focus on Group Chile logistics and transportation. Thales is a world leader in electronics and security systems, building on its expertise to provide solutions that set the standard in the transportation industry. The Group designs, develops, and delivers Thales Global transport equipment, systems and services, providing end-to-end solutions. Has operations in all Latin America and has offices in 9 countries (Argentina, Bolivia, Brazil, Chile, Colombia, Mexico, Panama, Peru and Venezuela). Indra has been present in Peru since 1998, and has more than 1,000 professionals in the country. In 2010, Indra acquired 75% of the local Peruvian company COM S.A., the country's leader in Indra Global outsourcing services. In this manner, Indra has expanded its portfolio of solutions in Peru, becoming one of the leading companies and with the capacity to become number one in any sector.
VIII. Transport System Development
Metro Transportation Plan for Lima and Callao
The plan focusses on the development of metro transportation for the city of Lima, and the Constitutional Province of Callao. Despite that Line 1 construction was completed on 1990 it wasn’t active until 2011 because the constructed section didn't have the distance or demand required to make it commercially viable. This line transports 320 thousand passengers per day.
The entire network consists of five projected underground lines. The total extension of the system, including the Line 6, is estimated in 165 km. [41] [42].
- Line 1: active, with 35km and 26 stations. Investment: US$ 300 million dollars. - Line 2: under construction, with 27km long, 27 stations. Investment: US$ 5,075 million dollars. - Line 3: on financial evaluation. Investment: US$ 5,692 million dollars. - Line 4: under construction, with 8km long, 8 stations. Investment: US$ 4,434 million dollars. - Line 5: project under design. - Line 6: project under design. Investment: US$ 5,036 million dollars.
Figure 58: Lima City's Metro Future Network. Source: Ministry of Transport and Telecommunications of Peru.
2.3. Synthesis
Taking in consideration the previous research on Latin America region and the overview of the relevant countries, the next step is to perform a synthesis, including the identification of key points, tendencies, and future opportunities for transport systems application.
ARGENTINA
Driver Synthesis
Very developed. The Argentinean rail industry has being the top in the region with 47 059km of railways. Concessions and public works related to railway construction are effectively managed by the Rail Transportation Secretary of Transport. The market is mainly represented by three companies: Metrovías S.A.(Roggio Group), Ferrovías (EMEPA Group) and Trenes Argentinos Operaciones.
Most developments and future projects are focus on Buenos Aires city. In this city is possible to find the “SUBE” card, an integrated paying system valid for all public transportation means. Public Transportation About the market, it is form by many small companies. Although, in System the short-middle term there will be opportunities for investments as the Government announced on 2017 a Public-Private Partnership (PPP) program to construct 7,277 kilometers of roads. The most important is Buenos Aires Port, which concentrates the 90% Logistic Hubs and Port of containers movement of the country. Due to its modern System infrastructure and freight capacity, is one of the top important port of Latin America. The main authority is the Ministry of Transport, that is in charge of providing an adequate infrastructure and services in all means. Annual budget: $4.89 million USD. Authorities The Ministry of Tourism set policies regarding the traffic, transport and infrastructure. Have as mission the sustainable development of all regions. Opportunity to invest. The market is not saturated. The Government announced on 2017 their plan to attract over $26.5 billion in System Integration infrastructure investments until 2022 in the form of PPP mostly in the transportation, communications and technology sectors.
The National Plan of Transport and Infrastructure 2016 - 2019 represents one of the most important framework for development Future Developments and future projects regarding the Argentine transportation network. and other relevant information The National University of Lanús, is the first institution in offering the bachelor in Railways Technology. Its study plan recognized the actual necessity in this sector. BRAZIL
Driver Synthesis Low quality and no integration between different transportation modes. The previous periods in Brazilian history when railways were Rail Transportation nationalized decrease the quality of the service and infrastructure. Opportunity for private sector to invest.
The most used system is the Bus Rapid Transit (BRT). This technology Public Transportation was developed in Brazil and is a mass-transport alternative suitable to System cities of all sizes, notably for its low-cost and shorter implementation time compared to other modes. Brazilian exports have tripled in the last ten years and now the Logistic Hubs and Port country requires huge investments in port infrastructure. System Investment projects in the coming years are likely to exceed $5.7 billion USD.
The most important authority is the Ministry of Transport, entity that Authorities enforces and directs regulations concerning all transport means. Was established in 1992. Annual budget: $5.8 billion USD.
There is a strong position of three main players: Ericsson, INDRA Brazil and LOGIT, focused in the transport development of cities. The brazilean National Logistics and Transportation Plan (PNLT) and System Integration the Program of Investment in Logistics are proves of the high degree of future investments in all transportation means. Systems integrations will be demanded. Opportunity to invest. The Brazilian railway system is mostly concentrated in the Southeast Future Developments of Brazil. and other relevant Only 8% of the railways are in the North and Central-West regions. information Railway system was primarily built to export commodities and not to promote integration between regions or other means of transport.
CHILE
Driver Synthesis Good opportunities considering the forecasted growth in term of both passengers carried and freight transported. Most of the Chilean Rail Transportation rail network is operated by the state-owned enterprise “Empresas de los Ferrocarriles del Estado”, known as EFE Group.
Due to the geographic characteristic, the main transport mode that connects the country is by road with a network of 85’000km. Public Transportation Public transportation is well developed but only in Santiago city, System where Grupo EFE has strong market position. Many important projects are in program on Santiago city.
Positive scenario: High number of ports and mainly state-owned. The Logistic Hubs and Port biggest Chilean port, San Antonio, have registered a growth in 2016 System about 4% compared to 2015. The maritime transportation is mainly use for freight.
The Ministry of Transport and Telecommunication have promoted an important number of projects for transport and infrastructure development, where eco-friendly innovations are also present. Annual budget: $1.6 billion USD. Authorities Strong Governance system. The Economy, Promotion and Tourism Ministry Formulate policies regarding the traffic, transport and infrastructure. The Public Works Ministry manages the concessions: roads, rails, maritime, ports.
Strong position of Thales (who supports and is supported by local partners) and Indra who is at the forefront on ITS solutions. Secondary System Integration presence of TECSIDEL, Ferrostal, SONDA and Southern Technology Group.
The government's “Energía 2050” long-term energy plan mandates that Chile adopt the highest international standards of energy Future Developments efficiency for road, air, rail and maritime transport. and other relevant The Transportation Master Plan Santiago 2025 (PMTS 2025) sets the information framework to develop the planning of the metropolitan transportation for the city of Santiago de Chile, involving all transport means. Total investment: 22.750 million dollars.
COLOMBIA
Driver Synthesis
Rail transport remains underdeveloped, which represents big threat for system integrator companies. Although, is important to consider the Government's future short-middle term plans to invest in transport Rail Transportation infrastructure. The rail market is mostly represented by the company FENOCO S.A. (Ferrocarriles del Norte S.A.), and in low percentage by Sociedad Ferrocarril del Oeste S.A. and Ferrocarril del Pacifico S.S.A
In large cities, Integral Systems of Mass transit (SITM) are under Public development to deal with critical traffic congestion, a problem in cities Transportation as Bogota, Medellin, Bucaramanga, Cali and Pasto. SITM solutions are System expected to have a major impact in reducing travel times (between 20 and 35% on average) and in reducing operating costs (around 30%).
Advantageous position in the region for maritime freight transportation due to the coasts in both Atlantic and Pacific oceans, Logistic Hubs and and its geographical linking position between Central and South Port System America. High activity of ports as they handle around the 80% of the international cargo. The main authority is the Ministry of Transport in charge of providing an adequate infrastructure and services in all means; while the Authorities Superintendency of Ports and Transport perform the public control of the services.
Opportunity to invest. The market is not saturated. The only integrated system is present in Bogota city, as SITP. The other major cities has critical transportation and traffic problems, and have on-going or System Integration planned important projects to improvement their infrastructure. Therefore, this scenario represent open of opportunities for system integrator companies to invest.
New projects and budgets are managed and by the Ministry of Transportation. One of the most important future project is the Metro Future transportation for the city of Bogota, which will reduce traffic Developments and congestion. other relevant In Bogota, the TransMilenio mass – transit system, was implemented information since late 2000 and currently mobilizes 28% of trips by public transportation. In other hand, the rest of the transit systems operates under low efficiency conditions and service level.
MEXICO
Driver Synthesis The lack of competitiveness in the sector is producing low incentives to the development of infrastructure. Rail Transportation The concentrated market power in the sector that allow few companies to fix high prices. The most representative company for people transportation is Ferrocarriles Suburbanos. Most development of urban transportation takes place in the capital, Mexico City; but the actual lack of control and monitoring of the bus Public Transportation service leads to congestions and creates bottles necks and conflicts in System intermodals points. Therefore, high opportunities for system integrator companies.
The maritime transportation is mainly use for freight. The most important are Port of Lázaro Cárdenas by the Pacific Ocean Logistic Hubs and Port side, and Port of Veracruz by the Golf of Mexico side. Both are System equipped with modern infrastructure and high freight capacity. Port of Veracruz is specially equipped shipping automobiles.
The main transport authority is the Secretariat of Communications Authorities and Transportation. This organism regulates commercial road traffic and broadcasting and promotes transportation projects.
Opportunity to invest. The Intelligent Urban Mobility Plan for Mexico System Integration City aim at integrating all transportation means by adopting and developing information technologies.
New projects and budgets are managed and by the Secretariat of Future Developments Communications and Transportation. The National Plan of and other relevant Development 2013 - 2018 provide guidelines, development and information future projects regarding the transportation network and infrastructure.
PERU
Driver Synthesis
Threat for system integrator companies due to low infrastructure. Rail transportation is very limited. Only 35km are electrified, which Rail Transportation correspond to the Line 1 Metro in Lima. Relevant difficult in rail development due to the geography. The market is form by many small companies. No company reaches the 1 million dollars in revenues. Syndicates and driver’s unions have power and represents high barriers to the State to implement Public Transportation projects and new technologies in transportation. System Metro service is only present in Lima city with actually one operative line. There are projects to extend metro up to 6 lines. To the date, only Line 2 and 4 are under construction. Callao Port is the most important port in Peru; due to its extension, Logistic Hubs and Port freight import and export capacity and activity, and to its closeness System to Lima, the capital city (only 15km). Two big players operate the port: APM Terminal and DP World.
The main authority is the Ministry of Transport and Communication, in charge of providing an adequate infrastructure and services in all means. Authorities Another important organism is the Ministry of Housing, Construction and Sanitation, responsible for the proper development of urban mobility in the country.
There are three big players with a physical presence Lima city: System Integration Southern Technology Group, Thales, and Indra company. High opportunities are opened due to the important future projects.
New projects and budgets are managed and by the Ministry of Transportation and Communications, in cooperation with other institutions and also the private sector. Clear strategies in developing Future Developments transport industry. and other relevant information In Lima city, one of the relevant projects is the Metro Transportation Plan, which consists in the construction of an entire network of six underground metro lines. One line is actually operative, and two lines are under construction.
3. IT System in Transport Industry
3.1. Main IT Systems supporting the transport operations processes
The transportation industry is one of the most relevant aspects of competitiveness for countries and companies. An inadequate transportation system can generate high costs, low passenger’s service levels, and a negative economic impact. The application of Information Technology (IT) Systems in the transport industry enables the improvement in the performance and safety of transport, freight and passengers, in their different modes such as road, rail, air, and maritime. In relation to the improvements, IT Systems is important because it is present in the following applications [63]:
. Aging and Disabled Drivers. As IT Systems can provide assistance to the increasing population of elderly and disabled drivers. . Intelligent Vehicles. IT Systems affect positively the deployment of intelligent vehicles and other similar innovations. . Vehicle and Highway Automation. IT Systems is critical important to pass from partial automation to full automation of the transportation. . Collision Warning and Avoidance Systems. IT Systems is in fact a major element to develop advancements on more precised collision warning, avoidance systems and crash mitigation systems.
The main IT systems supporting the transport operations processes are determined by the following application areas: asset management, e-governance, freight transportation services, passenger information system, personal information, security, ticketing, and traffic and transport management. Below, a detailed description of each application area is presented.
3.1.1. Asset Management
Solution Description These are the systems for managing money; including Investment Management investments, budgeting, banking, and taxes.
Corresponds to the dedicated applications which are used to record and track the infrastructure asset throughout its life cycle, Infrastructure Asset from procurement to disposal. They provide to the organization Management information as: location of certain asset, current user of it, mode of use and other details about the asset. These are the systems which encompass the specialized software with dedicated program agents and procedures defining the scope Infrastructure and field of action, intended for operational management Maintenance (monitoring, detection and elimination of irregularities) in a dispersed heterogeneous environment of systems and applications. These corresponds to dedicated applications which are used to record and track the vehicle & rolling stock asset throughout their Vehicle & Rolling Stock life cycle, from procurement to disposal. They provide to the Asset Management organization with information as: location of certain asset, current user of it, mode of use and other details about the asset. The systems which involve specialized software with dedicated Maintenance Supply program agents and procedures defining the scope and field of Chain and Predictive action, intended for operational management (monitoring, Maintenance detection and elimination of irregularities) in a dispersed heterogeneous environment of systems and applications. The systems for supporting the entire supply chain maintenance Vehicle & Rolling Stock and providing data and algorithms to make predictive Maintenance maintenance.
3.1.2. eGovernance
Solution Description Corresponds to the systems for delivering government services, exchanging of transport information, managing the transport Planning communication transactions, managing the integration of various stand-alone transport systems and services between government and other players. These are the systems for controlling and monitoring planned government services, ensuring a safety-critical operator control of Monitoring interlockings and a reliable access to correct information by the users.
3.1.3. Freight Transportation Services
Solution Description Corresponds to the systems for facilitating, monitoring and Terminal Management controlling the distribution of products or the handling of goods in and Freight Handling a bulk terminal in order to ensure smooth and safe terminal operation. Involve the systems for supporting the intermodal concept in Hub and Intermodal which containers are received from various origins by unit or block Logistic System trains to the intermodal terminal at a central hub, and are then distributed to the final destinations. City Logistics are the systems for the urban freight transport and logistics operations of delivering and collecting goods in town and City Logistics city centers in terms of transportation, handling and storage of goods, management of inventory, waste and returns, and home delivery services. End-To-End Good These are the systems for enabling the shipper and the recipient Tracking to track their shipment at any point along its route. 3.1.4. Passenger Information System
Solution Description The systems for collecting, storing, managing, updating, analyzing, CMS and Configuration presenting and controlling data about all configuration items and and Control their relationships. Corresponds to the onboard displays and relating platform for On Board Infotainment showing relevant trip information such as travel speed, arrival time and transfer information. Corresponds to the in-station displays and relating platform for On Ground Infotainment showing relevant trip information such as travel speed, arrival time and transfer information. The are the systems for enabling a network manager to display Digital Signaling targeted information to a specific audience at a specific place and time. Involve the systems for calculating the best route at the start of Travel Planner, the journey and monitoring this constantly during the journey Companion and Assistant itself, providing to the change of the route depending on traffic conditions.
Social Engagement, These are the systems for enabling social engagement and the Crowdsourcing interactions among passengers.
3.1.5. Security
Solution Description Include the appliances that enable embedded image capture Video Surveillance capabilities that allow video images or extracted information to be System compressed, stored or transmitted over communication networks or digital data link. Comprise the systems which identifies and monitor entities that Access Control System have access to a controlled device or facility based on the validity of their credentials.
These are the system that allow to manage access controls, Access Permission permissions and security across platforms that span multiple Management System servers. The are the systems for monitoring, managing and controlling traffic in order to increase road safety and security. The system Road Safety Control provides drivers with real time information about the level of traffic flows, congestion, any potential safety risks in different road sections and more reliable routes that they might take.
3.1.6. Automated Fare Collection
Solution Description Corresponds to the systems for ticketing process designing, Configuration and Control controlling and monitoring. Includes the event-management systems for automatically Sale Channel and syndicating the tickets to correct sales channels, providing the Payment Gateway customers with the ability to: purchase and pay tickets, packages, merchandise and memberships from virtually anywhere. Ticket Control, Validation These are the systems for validating tickets and entry credentials and e-fine in real-time at facility access control points. The are the systems which enables a new kind of businesses, deriving from the value of services such as archiving financial and Clearing transport transaction data, the aggregation of this data for deriving information, specific security services, among others.
3.1.7. Traffic and transport management
Solution Description These systems are for optimizing operational planning and control for operations control systems. The system facilitate the generation Timetable of optimum timetables (in terms of train intervals plus energy and resource savings), and thereby, maximizes the overall performance of mass transit and main-line rail systems. The system covers the entire field of operational railway control, from the local or remote control of individual interlockings to the Control Room automation of entire rail networks. The Control Room ensures the safety-critical operator control of interlockings and a reliable display of the operating situation. These are the systems for train formation yards on the basis of Crew & Vehicle Planning operational requirements, planning and dispatching solution for and Dispatching fleet and crew management in rail freight transportation. Automatic Vehicle AVL includes the systems for detection and monitoring of transport Monitoring and fleets, which can be buses, subway, trains, trams, boats, among Location (AVL) others. Yard/Depot Operations These are the systems for sorting items of rolling stock into complete and Shunting trains (or the reverse action). Also include the sorting on the ground (or switching) with shunting or switching operations. Involve the activities concerning to the support, the development Energy Management and the implementation of quality, environmental, and energy management programs. Corresponds to the systems for supporting monitoring and Service Performance measurement of relevant performance metrics to assess the Monitoring performance resources. 3.2. Description and map of competitors’ offering in Latin America
After making the countries overview and research, is possible to identify five most representative players inside the Latin America region, regarding the transportation system integrator and management. These players were chosen due to their high revenues, global presence, development of one or more important projects in of the referent countries, and actual IT services offering. These companies are: GIRO Inc., GMV Innovating Solutions, INDRA, and THALES.
3.2.1. GIRO Inc.
GIRO is a privately-owned company which core business is to serve public transportation and postal organizations around the world, by offering advanced software and services to plan and manage operations. The central office is located in Montreal, Canada. It was founded in 1979, actually serving clients in 26 countries. Their main product is called HASTUS, a software for public transport scheduling derived from researches of the University of Montreal. The system was first used in the transportation operations of the cities of Montreal and Quebec, in Canada.
About their IT services
The services offered are mainly divided in three platforms: HASTUS, HASTUS-Rail, and HASTUS- OnDemand.
HASTUS This is a powerful modular solution for bus, metro, tram, and light rail scheduling Description and operations. It makes possible to reduce operating costs while increasing the operation’s performance. Traffic & Transport Management - System optimizers that enable synchronization and timetables. Timetable- modelling tools that allow multimodal service synchronization. - Run-time and ridership data-analysis modules that enable more efficient use of fleets and improved service for customers. - The business intelligence feature quickly highlights trends in historical data. - Scheduling optimizers that allow to produce efficient, cost-saving vehicle and crew schedules. Application Asset Management areas - Manage and optimize daily vehicle and employee assignments and their changes. - Access complete and real-time information: KPI, statistics, and timekeeping data for payroll. Use mobile and web-based applications for direct interaction with users. Passenger Information System - Detailed trip planning and stop level information, accessible through: web sites, mobile devices, stop posters, electronic signage, Interactive Voice Response (IVR) applications, and others.
HASTUS-Rail This is an integrated system solution for the passenger rail scheduling and operations. The platform optimize and manage timetables, rolling stock, and on- Description board and other related staff assignments. Its application allow to reduce operating costs, and increase operative performances. Traffic & Transport Management - Ensure that yard and station capacity restrictions are respected. - Manage conflicts to generate robust timetables. Application - Define temporary circulation restrictions on track segments. areas - Evaluation of maintenance impact on operations and track availability. eGovernance - Perform forecasts of expected passengers, aiming to optimize the number of vehicle units and kilometers per vehicle.
HASTUS-OnDemand This is a flexible solution for paratransit and other on-demand transport Description services. The use of the platform enables to deliver high-quality service while controlling operating costs. Passenger Information System - Manage and optimize on-demand services as: customer registration, trip booking and scheduling, service delivery, customer information, invoicing, and general reporting. Application Traffic & Transport Management areas - Enable integrated taxi services, by performing dynamic generation and assignment of runs based on vehicle availability and budget restrictions. - Determines and operates the most efficient fleet mix of dedicated vehicles, accessible taxis and standard vehicles.
Regarding the mode of use, their services can be run on-premises or cloud basis. The business is built in an open-data policy that allow the integration of their products with external applications including the integration with systems as: Geographic Information System (GIS), Enterprise resource planning (ERP), Automatic vehicle location (AVL), Vehicle maintenance, Electronic fare box and ticketing, Passenger counting, Timetable publishing and customer information systems.
3.2.2. GMV Innovating Solutions
GMV is a privately owned technological business group with an international presence. It was founded in 1984. This company offers its products and services in very diverse sectors: Aeronautics, Banking and Finances, Space, Defense, Health, Cybersecurity, Intelligent Transportation Systems, Automotive, Telecommunications, and Information Technology for Public Administration and large corporations [54]. This company have international presence with physical offices in America (United States and Colombia), Europe (Portugal, Germany, United Kingdom, France, Romania, Spain and Poland) and Asia (Malaysia).
About their IT services
Their intelligent transportation systems products are divided in several platforms: Intelligent Transportation Management System (ITMS), GMV Planner, PA & Intercom, Hegeo, SAE-R, INFO- pass, MOVILOC, Fare Collection System (FCS), DV-rec, and Transport OnDemand.
Intelligent Transportation Systems - ITMS
ITMS is an advanced fleet-management systems, consists in an integral Fleet Description Tracking and Management Systems, providing real-time information together with subsequent analysis of the data obtained. Passenger Information System - Passenger information through several channels (Web, mobile apps, panels, etc.). Contextual menus adapted to suit the functions of the different types of user. - Integration with transit-signal-priority or green wave systems Application eGovernance areas - Web interface for running the fleet from different locations with minimum deployment costs. - The systems meet the needs of multi-fleet, intermodal customers (mixed bus-and-train transport networks) including demand-response systems. Eco-driving and driver-quality assessment. - Management of alerts, notifications and emergencies.
GMV Planner This is a Planning and Schedule module. The platform offers to transport operators and authorities a powerful tool for complete lifecycle management Description of the transport service operation and planning. Aims to ensure an efficient and synchronized transport system between lines and nodes at the lowest possible running cost. Traffic & Transport Management - The module GMV Planner Designer provides the design of the whole transport network and the optimum generation of schedules and services for different timetables and different types of day. Enabling the Application integration different operators, types of transport or administrative units in area the same system. eGovernance - The module GMV Planner ERP is a global resource planning system made up of specialized, highly configurable modules that consolidate operations in a centralized database.
PA & Intercom
This is a digital railway public address and intercom system, highly customizable Description and that can be set up in various onboard environments.
Passenger Information System - The automatic travel announcements can be tripped autonomously through the connection with any tracking system. - Multiple audio sources: digital or analog broadcasting of different contents Application for each wagon. The contents can be loaded in the train through Wi-Fi, areas Ethernet and USB. - Priority management for the different types of public address and intercoms. Completely digital architecture. - Intercom points for the crew and passengers are installed throughout the train where considered necessary.
SAE-R This is a multi-application railway traffic operating system, for the operator’s Description real time fleet management, monitoring and planning needs plus passenger information and statistical mining of all recorded information. Passenger Information System - Onboard segment. Offers a wide-ranging of onboard units with various capacities to suit onboard integration needs, communication protocols and future scalability requirements. Application Asset Management areas - Control Center application that offers various display modes (maps, synoptic diagrams, etc.) for representing rolling stock and stations, for adjusting operations and facilitating real-time decision-making. - Reporting module: based on such factors as speed, station passing times, late- and early-running, onboard monitoring items, occupancy figures, etc.
INFO-Pass This is an all-in passenger information system allowing management and Description distribution of information in its various formats through the various systems installed on the train.
Passenger Information System - Text information on LED displays located throughout the train (front, side Application and interior displays), video information on monitors and audio information areas on the unit’s public address system. - Video Entertainment functions, by adding a Digital Video Server.
Fare Collection System (FCS) This is an electronic fare collection system designed to meet the mutual Description requirements of transport authorities and operators. Includes ticketing technologies and supports such as cell phones and bank cards. Automated Fare Collection - Design and configuration of tickets and fare cards in different formats: barcode, QR code tickets, bank cards, and cell phones (NFC and mobile payments). - Onboard equipment as: fare card validating and electronic ticketing Application machines, inspection devices, and onboard ticket vending machine. areas - Station equipment for fare card sale, recharge and personalization points. Integration of access-control systems using any technology with fare card validator, barcode or QR code. - Software application for applications as the personalization for reduced fare rates, including a photo of the passenger concerned and capture of personal information.
DV-Rec
Description This is a railway video surveillance solution, designed for any kind of fleet. Security - Onboard system is managed by DVR units, includes components as: IP cameras, Ethernet switches and cabin touchscreens. - Completely digital architecture. Application - The system processes some onboard signals, such as “open-doors” and areas “active cabin”. - Control Center application (DV-Desk) is a desktop application that allow users to configure and interact with the trains’ onboard video surveillance system. It enables the download of videos recorded in the DVR units by different communication channels.
Transport On Demand This consists in a system for public transportation in rural areas, characterized by Description an in-house demand-response system that boost the efficiency and profitability of public transport while offering greater flexibility to passengers. Passenger Information System - User Interfaces where passengers can book the service, check the state of their request and modify it by means of any of the following options: mobile app, website web, call center and bus-stop terminals. Application Asset Management areas - Onboard system with the main function of vehicle tracking, recording bus-stop passing times and management of communications. Driver interface for communications with the control center. - Fleet management system. Service optimization application. Statistics and reports. 3.2.3. INDRA
Indra is one of the world's top technology and consulting business, leader in IT in Spain and Latin America. Although, they have presence in 140 countries and mora than 40’000 employees. Is a solution’s provider in areas as Transport & Traffic, Defense & Security, Energy & Industry, Telecommunications & Media, Financial Services, and Public Administrations & Healthcare.
Ticketing Systems
This is an advanced solutions for ticketing systems, allowing the customer to Description improve their operations by using different sales systems both onboard and at bus stations. Automated Fare Collection - Sales and validation systems for buses and trams. Provide the optimization of operations and control of the transport networks, facilitating tasks related to marketing and managing rates. - Integrating rates with other transportation modes and authorities. Application - Offering of onboard equipment for buses and trams that allow areas passenger-driver interaction as: validators, manual and automated sales equipment, and driver console. In stations, they offer lockers, automatic sales machines and access control validators. Passenger Information System - Passenger information and assistance systems, including a controlling service system that allows the minimization of frauds.
Operation Assistance Systems (OAS) This is an advanced transport systems, able to run through onboard Description equipment and services and at Bus Rapid Transit stations. Traffic & Transport Management - Basic OAS Monitoring Module. This system allow to optimize the customer's fleet resources and know the level of saturation of the offered schedules and services. - NAUTA Onboard Unit Module. This system manages wireless communications with all vehicles to collect data on their position and signal status. Application Passenger Information System areas - OAS Passenger Information Module. Allows the presentation of information to passengers through different means, such as panels at stops, onboard panels, SMS, APP for Smartphones and web applications. - OAS WIFI Module. Is an onboard WiFi solution that offers a completely secure and safe Internet connectivity for all passenger devices in real time, on high-speed, regional and suburban trains, municipal trams, etc. Security - Onboard Video-Surveillance OAS module. Allows to connect to onboard cameras and operations as: record, store, and download images in real and deferred time.
AMARA This is a modular and integral eGovernment platform specifically for Public Administrations that helps to organize and improve citizen relations with the Description Public Administration. The platform covers the entire eGovernment value chain as a multichannel solution that guarantees traceability and direct intervention in process management, tracking and control. eGovernance - AMARA ATIENDE. Is a multi-channel face of the platform for society and the public, includes: Institutional portal, Citizen Folder and eOffice. - AMARA CITAS. Is an integral multi-channel appointment management for organizations and institutions. - AMARA TRAMITE. This system is in charge of controlling and managing Application the procedural administrative case file processing flow. areas - AMARA eSCRIBE. This is a corporate system for creating documents and templates based on reusable blocks and paragraphs. - AMARA PFIRMA. This is a horizontal corporate system solution for the electronic signature (eSignature) of documents. - AMARA NETPLUS. This is a system responsible for the payment gateway with an associated administrative procedure.
iSmartMaint This a smart asset and maintenance management platform. Some advantages of implementing this system are: minimizes the material Description damage produced by incidents, anticipates preventive actions to improve safety and reduce costs, improve operations by recording the system’s data flow and analyzing it with reporting tools. Asset Management - Manage assets and spare parts. - Manage preventive maintenance and plan regular maintenance. Application - Reduce the detection time in the event of maintenance incidents. areas - Reduce the reaction time in the event of incidents. - Guide operators on the actions required to resolve incidents. - Coordinate the optimal use of operational resources.
GEOMIF
This is an integrated graphic management of railroad inventories and Description infrastructures. Asset Management - Management of the company's assets. Central repository of information on infrastructure assets and their breakdown. Generation of specific reports. Integration with financial systems. - Knowledge of the infrastructure, allowing different methods for Application consulting information including properties and related documents. areas - Status analysis of infrastructures. Tool for centralizing both the stock and its current status. - Maintenance of infrastructures. Operations planning and analysis for both corrective and preventive maintenance, integrated directly to both processes.
iMARE This is system that aim to solve the needs of port managers and operators, and port or maritime authorities, as well as those of other port community Description stakeholders, including the integration of the entire multi-modal logistical chain. Freight Transportation Services - iMARE - PCS Suite systems. The module covers the management of the processes performed by all the public and private agents involved in the port operations business and the multi-mode logistical node. The system manages the processes associated with stopovers, imports, exports, transfers, hazardous goods, etc. - iMARE – PMIS. This module is designed to assist port authorities, port managers or operators and other agents (maritime authorities and Application service providers) in managing stopovers. areas - iMARE – VTMIS. This module systems is for managing maritime traffic thanks to a series of sensors (radar, AIS, cameras, VHF communications, etc.) that detect approaching vessels and interior movements. Also includes separation devices in high traffic density areas. - iMARE – FAMS. This module offers solutions for controlling access and interior cargo movements (imports/exports), assistance in security, optimization of ground handling of cargo (truck, railroad) between the port entry or harbor and the cargo terminals.
3.2.4. THALES
Thales Group is a French multinational company, leader in providing technology services. They have operations in 56 countries, combined with the expertise of more than 64,000 employees. Thales represents a key player in keeping the public safe and secure, guarding vital infrastructure and protecting the national security interests of countries around the globe, serving five main sectors: Aerospace, Space, G round Transportation, Defense and Security.
Regarding the ground transportation sector, they serve transportation operators, infrastructure managers, integrators, and other actors; aiming to improve safety, lower costs and increase passenger services. They perform activities in areas as: Management of Rail Infrastructure, Networks, Safety and Efficiency, Traveler Services Rail & Public Transport, Train Control for mainline and urban rail, Route and Operation Control, Tramways & LRT, Fare collection Management Roads, Tolling, Traffic Management, and Car Park Management.
TRANSCITY
This is a ticketing & revenue collection system, more appealing for the Description passengers and more cost-effective for corporate customers.
Automated Fare Collection - Offer a vast range of equipment for vending, validating and controlling travel rights, granting access in metro networks and car parks. Application - Cloud system able to deploy mono- or multi-modal ticketing, with a areas central processing system designed for all modes of public transport as well as car parks and bikes. - Interoperable fare collection systems.
ETCS This is the European Train Control System, a signaling and command-control train system. Some benefits of the system are: customer focused innovation Description for business performance, increasing Safety and Security, and maximizing revenue through interoperability. Traffic & Transport Management - Signaling system and and system that provides cab-signaling. Continuously calculates a safe maximum speed for each train, with cab Application signaling for the driver and on-board systems that take control if the areas permissible speed is exceeded. - Send route data to the on board unit. Report the exact position and direction.
LockTrac Control System
This is a modular Route Control System. More precise, it is electronic Description interlocking systems ensure smooth and safe train movements by managing points, signals, level crossings and other field elements.
Traffic & Transport Management Application - LockTrack 6111 ESTW L90. This is a is an electronic interlocking system areas (ESTW) designed for meeting the highest safety requirements.
Traffic Management Systems Traffic Management Systems (TMS) is a modular system that provides Description permanent control across the network, automatically sets routes for trains and logs train movements as well as detects and solves potential conflicts. Traffic & Transport Management - Modular Central Control for Urban Rail Transit (NetTrac MT). Is an open architecture solution for central control of urban rail systems. - NetTrac 6614 (ZL L2000). This is an Automatic Route Setting (ARS) that automates the operation and discharges signalmen and dispatchers from routine work. Asset Management - Advanced Railway Management and Information System (ARAMIS) Application Module. This is an intelligent Operation Control Center system. It areas controls and automates the railway traffic operation (automatically sets routes, supervises the infrastructure, visualizes the status of the railway network in real time, performs a comparison with the planned targets, shows KPIs, optimizes resources and calculates forecasts based on the actual data). - LRT & Tramway Control System. This is a management and control solution for the rail urban networks. Compatible with any type of rolling stock, this platform optimize operations.
OBV System This is an on-board video surveillance system (OBV) that allow to maximize Description physical security. Security - On-board video surveillance. Application - Address cyber security threats by preventing and even countering hacks areas and attacks. - The system detects abnormal behaviors, congestion zones, fire, smoke, intrusion and more actions.
APIS Software This is an Advanced Passenger Information Service software for managing Description heterogeneous input sources and coordinates information across multiple channels. Passenger Information System - The software offers the passengers for on-board, in-station and online Application information and entertainment, audio announcements, web areas connectivity, help points and other services to assist them in their travel planning.
The next chart resumes the offerings of the main players in the System integrator market in Latin America, regarding the application areas defined in this report:
Application areas GIRO GMV INDRA THALES
Asset Management
eGovernance - Freight Transportation - - - Services Passenger and Personal Information
Security - Automated Fare - Collection Traffic and transport management
4. Case Study: Lima Metro Line 1
4.1. Description of methodology
After carrying out a general description of the Latin America region and the analysis of the main representative countries, the next step is to focus on one of the actors. The company chosen is Lima Metro Line 1, commercially known as CONCAR S.A., actual operator of the first line of the metro system in the city of Lima, Peru. The objective is to explore this company, analyzing the IT systems that actually supports their operations and contrast them with the desired systems they aim to operate with. The starting point will be an interview to Mario Bolivar, current Communication Coordinator in Lima Metro Line 1. He will be the main contact with the company and will provide the information to build the case study. In a later step, a questionnaire will be send to Mr. Bolivar to evaluate the IT development and tendency of the company. The mentioned questionnaire will represent the input for a “AS-IS & DESIRED” analysis. The output of the analysis will show how Lima Metro Line 1 IT systems are closer to a traditional approach or to a innovative approach. This measure will define a clear area where the IT System market is satisfied or not, meaning the free space where System Integrators players can enter and offer their innovative solutions.
4.2. Company Overview
Metro Lima Line 1, officially known as CONCAR Company, is the company operator of the Line 1 of the Metro Lima with a concession of 30 years starting from 2011. This is the first and actually only operating metro line in the city, and in the country, Peru.
CONCAR is a local company with around 850 employees. They operate exclusively in the national territory, although, they are part of a bigger and international group named Graña y Montero Group, a company which controls a group of 23 subsidiaries in Latin America. They have more than 22 years of experience providing engineering solutions in the industry of road and railway infrastructure. Their operations cover more than 4,600 km of roadways nationwide, distributed in 13 projects; and the Line 1 of Lima´s Metro Rail.
Their business units are divided in three, which are: Road Infrastructure, Rail Infrastructure and Infrastructure Management. Each business unit has different services which are explained below:
. Road Infrastructure. Aim to provide engineering and development solutions in road management, including the restoring and preserving of pavements and increasing its service performance and functionality conditions.
Road Services Description Design, planning and comprehensive execution of road Project Development projects. Roads Infrastructure Road improvement and conservation. Maintenance Roads Operations Toll, weigh stations and Emergency Central management. Technology and analysis platform for the evaluation, Roads Management design and management of road infrastructure. Asphalt Emulsion Plant Manufacturing and sales of asphalt products.
. Rail Infrastructure. This business unit is in charge of the maintenance and operation of railway infrastructure, assuring the appropriate operation along the railways. Main operative pillars are: operating efficiency, control and reduction of operating costs and comprehensive management of the railway system.
Rail Services Description Includes all activities that assure a reliable, efficient and Railway Operation safe transportation system. Infrastructure Activities related with the conservation of railway goods Maintenance and equipment. Performing major and minor conservation tasks of the Rolling Material different rolling material equipment. Safety and Technical Evaluation and implementation of safety plans. Design of Training technical courses and training.
. Infrastructure Management. This business unit specializes in the design and implementation of maintenance solutions for industrial and mining businesses, ports, airports and hospitals. The solutions offered include predictive, preventive and corrective activities of facilities infrastructure and minor equipment.
Infrastructure Management Description Services Maintenance of infrastructure, Include the predictive, preventive and corrective equipment, as well as of generation maintenance of facilities and minor equipment and fire protection systems This include a variety of services for each Industrial Cleaning industrial sector, to guarantee the normal development of the productive process. Incorporate the operation and maintenance of Water and Wastewater Treatment water treatment plants and cooling tower water Systems treatment systems. Soft services are minor, technical and auxiliary Soft Services maintenance services for different types of infrastructure.
Partners & Stakeholder’s Relationships
The main partners for CONCAR are represented by the companies which are part of the Graña y Montero Group. These companies are not only partners for CONCAR but also important clients of this organization. The next graphic shows all the companies part of the group:
Figure 59: Graña y Montero Group partners’ structure. Source: CONCAR's Sustainability Report 2015. GyM Ferrovías is the partner-company who won on 2011 the tendering process with the Peruvian Government, and later subcontracted CONCAR to manage the operation. On this year, CONCAR received the railways already constructed and 24 trains. The partner GyM Engineering and Construction, together with GyM Infrastructure were contracted by the Peruvian Government to build all the infrastructure related with the Line 1 of the Metro Lima. Viva GyM is the partner in charge of managing all the advertising spaces inside the trains and stations, they also offer catering services inside stations. The partner GMD has as responsibility the management of the information technology. This partner implements systems and advancements, and give technical support and act as help desk for CONCAR.
Besides the companies part of the Graña y Montero Group, there are other important companies that affect Lima Metro Line 1 activities. Between the most relevant are:
. Alstom Peru. This company is part of a French transport corporation named Alstom S.A., they provided the rolling stock for the Lima Metro Line 1 and have active participation in the service maintenance of the trains. . Boxer Seguridad. The company is in charge of the security inside offices, stations (at least one personal per station) and trains stations (at least one personal in every operative train). . EULEN. The company which manages the cleaning services inside stations and trains. . CEDELIMA. The company which manages the cleaning services inside the Lima Metro Line 1 administrative offices.
To increase the coordination, Lima Metro Line 1 has weekly meetings with representatives of their partners mentioned above. In this way they can effectively improve the information flow and to reduce redundancies on operations and activities.
Other important Stakeholder for CONCAR is the Peruvian Government. The income generated by CONCAR is directly paid by the State, as a fee for the metro transport service depending mainly on the kilometers travelled. The State can penalize CONCAR if they don’t accomplish all the daily trips required, or the appropriate service level performance. The “fee” paid by the State consist in four main edges, which are:
. Availability: that the system is accessible to operate the daily trips established in advance. . Punctuality: meaning that the service operates in the schedule established and without delays. . Cleaning: maintain the order and clean aspect of the stations and trains. . Fraud mitigation: perform activities to reduce the number of people that use the service without paying.
The State has regulator entities through which it audits CONCAR activities, in a weekly basis. The auditors can enter offices, stations or trains randomly, and because of the importance of the project, they are very demanding. Within the regulator entities, CONCAR is audited primarily by the Ministry of Transport and Communication (MTC) and Supervisory Board for Investment in Public Transport Infrastructure (OSITRAN), and in minor relevance by the Autonomous Authority of the Massive-Electric Transport System of Lima and Callao (AATE).
Regarding the customers, the company basically segment them in three groups: Frequent Customers, Non-Frequent Customers, and Special Customers. The frequent customers are the passengers traveling during rush-hours in mornings and afternoons from Monday to Friday (generally are the employees), Non-Frequent Customers are the ones that barely use the service or use it only weekends, and the Special Customers are passengers that have a special transport rate as students or elderly people, and the passenger that are exempt of paying as Policemen, firefighters and CONCAR’s employees.
4.3. Innovation Approach
In this section, the IT systems actually use in Lima Metro Line 1 Company will be described, focused in the following functionalities: eGovernance, Passenger Information System and Traffic & Transport Management. The information was corroborated by Mr. Bolivar, as a collaboration with this thesis. Do to confidentiality reasons, no details regarding costs could be provided. The areas covered in the description include: technology, input & output elements of the system, integration with other systems, and resources involved.
. eGovernance and Passenger Information System
I. Technology
The system which encompass the functionalities of eGovernance together with the Passenger Information is known as Command Management System (CMS). This is principally an On- Premises, although some applications run as Software as a Service (SaaS). In the project of the Lima Metro Line 1, the CMS used is the product called EBI Screen 2000, from the multinational Bombardier Company.
The main characteristics of the system are: PC architecture, Microsoft Windows Operative System, modular platform, based on Visual C++ programing language, data base technology type is the product SOLID Boost Engine
The main functions of the CMS are:
- Energy control - Traffic Management and Stations Control - Automatic Routing Management - Scheduling Creation and Editing - Information for travelers - Timing estimations for trains to arrive to stations - Maintenance and diagnosis functionalities - Security and Surveillance - Authority Management: definition of operators, privileges, roles and control areas - Integrated Alarm System - Integrated Events System - Performance and Monitoring Management
The next figure shows the system architecture of the Command Management System (CMS) for the Lima Metro Line 1 project.
Figure 60: Command Management System (CMS) Architecture. Source: CONCAR S.A.
II. Input / Output
The Command Management System (CMS), in order to receive input or send information from any point, distinguishes mainly five levels, through which inputs and outputs of the system is possible. The five levels, as illustrated on Figure 51, are: - Control Room. Includes the functions of Energy control, Traffic Management and Stations Control, Passenger Information, Security and Surveillance. - Engineering Room. This is a room connected to the Control Room, here is located the Maintenance Position. Includes the functions of diagnosis, maintenance, scheduling. - Server Room. In here the server’s equipment and regulator servers of the CMS are located. It also includes a Server Console for the proper information flow and remote access. - Communications. This technology consists in the optic fiber and TCP Channels that connects the CMS servers with the interlockers. - Interlocking Room. In this room the interlockers are located and will support the CMS system from any unexpected failure in any of the elements. It is equipped with an online server which allows communication with the Bombardier Company servers, which is an external system that provides some EBS Screen services (as Video-graphic updates).
III. Integration
The CMS is linked with other systems, such as: the ATC-Vehicle, EBICab800 and the EBI LOCK 950. The CMS interactions with the ATC-Vehicle enable the control management and stopping commands for the vehicles remotely through digital input/output signals. Some of the functionalities from the integration of both systems include: emergency stopping, service stopping, and reversors (signal to change the direction of the vehicles forward or backward). The interface with EBICab800 connects the CMS with the driver operator. The interface with the EBI LOCK 950 allows the CMS to be interconnected with the Central Control of Automation, Traffic, Signaling and Signposting system of the vehicles. The functionalities of this system will be explained in the “Traffic & Transport Management” application area description.
IV. Resources involved
The system has strict relationship with the employees. There is a team of employees in the Control Room, a team for the Interlocking Room, and an operator manager in each Station with direct connection to the CMS.
. Traffic & Transport Management
I. Technology.
The On-Premises System for the Centralization Control of Automation, Traffic, Signaling and Signposting of the metro is based on the platform named CITYFLO 350 from the international Bombardier Company. This system satisfy all the technical, operational and security requirements established by the Peruvian Autonomous Authority of Electric Trains (abbreviated as AATE in Spanish). The communication system is basis in a track to train communication, which is achieved via audio frequency track circuits technology. The next figure shows the system architecture of the CITYFLO 350 platform.
Figure 61: CITYFLO 350 System Architecture. Source: CONCAR S.A.
II. Input / Output
The CITYFLO 350 platform, in order to receive input or send information from any point, has mainly three levels of channels, through which inputs and outputs of the system is possible. The three levels, as illustrated on Figure 52, are the Open Corporate Network, the Dedicated Signaling Network and the regular Cable Network.
The input/output of information is enabled by the electronic interlockers, signaling appliances of type EBI LOCK 950. These interlockers are vital for the command and supervision of the system’s elements on field, and the proper communication functioning of the whole network. The interlocking is composed by two modules:
. Inter-Processing Unit (IPU). Executes the functionality related to the signaling and its rules. The IPU has a redundant communication interface to achieve reliability and maximum availability. Also has a tool system, named FEU, which proportionate an interface between the IPU and the technical operators for maintenance applications. . Object Controller System (OCS). The system is capable of controlling a variety of field elements (signaling, circuits, sensors, railroad switches, between others). The OCS is of type electronic, based on microprocessors.
Figure 62: Modular Architecture EBI Lock 950. Source: CONCAR S.A.
III. Integration
The system is linked with other systems and applications, such as:
- EBI Screen control room. All the metro vehicles are supervised by the EBI Screen control room system. This is a modern computer-based control and supervision system that allows the operator to give commands. Also provides train regulation for the system. The operative system that enables the running of the EBI Screen is MS Windows.
Figure 63: Control Room based on EBI Screen System. Source: CONCAR S.A.
- EBI Link ATC wayside equipment. This equipment gives the information required for the precised stopping, and it is passed to the train through a balise located in the middle of the track before each station. The balise gives the exact distance to the stopping point of the train and allows the train to adjust its braking accordingly to stop at the correct position. - EBI Track Train Detection 300. The detection of vehicles in the CITYFLO 350 solution occurs through the track circuit EBI Track Train 300 (type TI21-M), which provides continuous detection on the position of the vehicle. - EBI Light Signals. The CITYFLO 350 solution does not require any light signals, since all the information is inside the vehicles. However, signals can be used to create a backup system in case of failure of the onboard system. Therefore, the optical signaling system is then a very simple system. - EBI Cab 800. This system is distributed onboard allowing the CITYFLO350 to have continuous supervision and continuous updates of the vehicle’s information through the track circuits. It also allows a semi-automatic driving with three driving strategies (slow, normal and fast) which can be selected automatically through the EBI Screen control room at each station stop. The next figure shows the system architecture of the EBI Cab 800.
Figure 64: EBI Cab 800 Architecture. Source: CONCAR S.A.
IV. Resources involved
The system has strict relationship with the employees: the metro drivers, personnel of the Central Operation Control Room, and the maintenance operators.
4.4. Cloud VS On-Premises Analysis
In order to analyze the innovation approach of Lima Metro Line 1 Company, a questionnaire was sent and completed by a representative of the company in Peru. The contact was Mr. Mario Bolivar, current Coordinator of Communications.
In this step, the aim to identify the current positioning of Lima Metro Line 1 Company in terms of mode of deployment of the transport operation IT systems. Also, to understand the IT requirements of the company regarding a group of pre-defined variables. The variables and main conclusions of the questionnaire are organized and described as following:
. Scalability and dynamicity of the demand. For the company is not critical to adapt and follow the fluctuation of the demand of their services (for instance the increasing number of user), due to the fact that there are no significant fluctuations in demand or dynamically increases of the use of resources. . Investments in dynamicity definition for demand of services. Mr. Bolivar indicated that, with respect to the future scenario, the demand of services has the tendency of increase. . Investments on Mobility or IT budget. With respect to the scenario of dynamicity on demand of services, the IT budget for mobility or transportation of Lima Metro Line 1 Company is increasing. . Investments on Incidence of fixed costs. Related to the incidence of investments of fixed costs on the budget, Mr. Bolivar didn’t precise if there is a trend towards its reduction, increase or variability. . KPI Monitoring. Mr. Bolivar indicated that for the company, the monitoring of performances related to the business continuity and support for operators is a relevant aspect and is well covered by the current monitoring solutions. . Flexibility of the IT systems. Regarding the flexibility level when there is a requirement to modify or introduce a new functionality in the system, for the company it is a necessary and relevant issue. This because, for the actual IT systems, modifying or introducing new functionalities are easy and quickly but it can be noticed a performance degradation. . Ubiquity. With reference to the possibility to access resources from different devices, Mr. Bolivar indicated that there is, in the company, a significant need which is currently covered by internal solutions but that could be improved in the future. . Innovation and technological update. In relation to the adaptation and continuous updating to the state of the art of applications in terms of technology and IT services, it was indicated that for the company there is an interest toward them. Both innovation and technological update represent a criticality in the business, but the solutions currently adopted are satisfactory in the day-to-day operations until the moment. Although, the interviewed indicated that the trend is to increase innovation, and in the future more investments will be required. This point has relation to the fact that the Line 2 of the metro system is under construction, and the whole network is expected to have 6 lines in the next years. . Innovation in term of security. Concerning the innovation relevance and continuous security updates for applications, for Lima Metro Line 1 Company there is an interest toward them, but at present, they are not critical, and the solutions currently adopted are sufficient, at least for the current level of operations. In the future, as operations will be expanded, the relevance of investments and innovation on security will be higher. Furthermore, is important to point out that the continuous security updates aim to ensure the reliability of the system through disaster recovery plans to avoid damage due to malfunctions, downtime, data loss and external attacks.
4.5. Functionalities Analysis
In the functionalities analysis the aim is to identify the current positioning of Lima Metro Line 1 Company in terms of mode of deployment of the transportation IT systems, by creating a map that describes the AS-IS & DESIRED scenario. The relevant functionalities analyzed where: eGovernance, Passenger Information System and Service Planning. For this, as it was explained above, a questionnaire was sent to Lima Metro Line 1 Company. In the questionnaire, the company’s representative selected the answer that better corresponds for each functionality, where the answer’s levels go from very traditional to very innovative IT solutions. The main conclusions of questionnaire are organized and described as following:
eGovernance
Covering Functionality Main activities AS - IS DESIRED PLANNING SERVICE TIMETABLE YES SERVICE MONITORING & REPORTING YES - YES - TRANSPORT MONITORING & REPORTING TRAFFIC MONITORING & REPORTING YES - MONITORING INFOMOBILITY MONITORING & REPORTING NO YES SALES MONITORING & REPORTING YES - EMERGENCY MONITORING YES -
. The planning system is actually a schematic representation with both advanced graphics and representations on a geographical map, showing the single-mode services for lines and stops. The desired scenario is to keep this solution. . The AS-IS scenario shows that there is a notice service about planned works on the infrastructure (strategic, tactical, short term), but in the future, the company will like to have a complete integration with the planning of works on the infrastructure and any other changes to the mobility services program. . The AS-IS scenario shows that the notice of planning variation is about scheduled changes to the service (strategic, tactical, short term), but in the DESIRED scenario, the company want to have an integrated notice about scheduled changes on the service. . The actual system has the availability of data relating to service information provided to customers, but the company thinks that in the future they will need a complete integration with the Customer Information systems, for monitoring the information supplied and the status of the delivery devices. . The AS-IS scenario is characterized by the availability of a specific information tool to support the management of Emergencies, and a tool to perform the reporting of the single-mode service. But the DESIRED scenario showed the requirement of a complete integration with ticketing systems for monitoring sales and sales device status, and an advanced dashboard for monitoring service levels, configurable and profiled according to the users' base.
Passenger Information System
Covering Functionality Main activities AS - IS DESIRED CONTENT MANAGEMENT CONTENT MANAGEMENT YES YES TOUCHPOINTCONFIGURATION INFORMATION CONFIGURATION INFOMOBILITY NO YES CONFIGURATION INFORMATION DELIVERY YES - CONTROL CONTROL ROOM DELIVERY ENGINE PUBLIC DELIVERY YES YES PLAYER GROUND TOUCHPOINT NO YES ON BOARD ANALISYS & REPORTING INFORMATION ANALYSIS YES -
. The AS-IS scenario shows contents and formats of the information to be provided are regulated by operating procedures and managed through IT delivery tools. But there is a requirement for an advanced Content Management tools, including the possibility to manage the multimedia content and book areas of information by external actors through workflow procedures. . Actually, the system has poor configuration options for video representations and audio messages. So, for the DESIRED scenario, the company indicated the need for an advanced configuration system, with possibility to define and simulate schedules. . The information delivery control in the AS-IS scenario is characterized by the connection with planning and control systems of circulation and positioning of vehicles, but in the DESIRED scenario, the company indicated will be better to have also the possibility of sharing between the different delivery channels (ground, board, mobile). . Regarding the public delivery and information diffusion, the AS-IS scenario shows no availability of on-board information diffusion but there is on-ground audio and video diffusion. On the other side, for the company, the DESIRED scenario will be to have an on- ground and on-board integrated information diffusion. . Regarding the on-ground and on-board information touchpoints, the AS-IS scenario presents no video devices and the use of obsolete audio elements. While in the DESIRED, the idea of the company is to implement interactive systems and large screens, together with advanced and interactive audio devices. . Respect to the analysis and reporting tools, the actual scenario shows the availability of these tools only for delivery and consolidated data, and lack of tools to dynamically define KPIs and representation formats. While the DESIRED state of the company is to have an integrated analysis and reporting tools, allowing the comparison of KPIs of different fields and levels, and the generation of transversal indicators.
Service Planning
Covering Functionality Main activities AS - IS DESIRED TRANSPORT NETWORK CONFIGURATION INFRASTRUCTURE NETWORK - NETWORK YES - CONFIGURATION PLANNING CATALOGUE SERVICE PLANNING TIMETABLE PLANNING TIMETABLE YES YES TIMETABLE VIEWING TIMETABLE DISTRIBUTION CAPACITY ALLOCATION CAPACITY PLANNING YES - VEHICLE SCHEDULING VEHICLE YES YES DEPOT OPERATION PLANNING CREW CREW SCHEDULING NO YES SERVICE ANALYSIS ANALYSIS & REPORTING YES YES TIMETABLE ANALYSIS
. Considering the Network, the AS-IS scenario is described by a modeling of the network infrastructure within individual applications, where is needed an import tool on every vertical application. In the other side, the company believe that in the forthcoming they will need a dedicated tool to modeling the network infrastructure and its distribution to the related systems. This new modelling tool should be able to build an integration with Asset management systems and Master Data Management (MDM) tool for managing and distributing master data. . The actual time scheduling is a single-mode production scheduling (tactical, short term) systems integrated with service planning components and equipped with basic functionalities. The company established that in the future they will require production scheduling systems (tactical, short term) integrated with service planning components and equipped with advanced functions (as calculation of distances, placement, etc.) and graphic representations. . Regarding to the level of integration, the AS-IS scenario shows an Import tool on every vertical application that uses the timetable, while the DESIRED is to have an advanced sharing timetable, able to connect with all the components of the planning process and towards the operation management components. . In the capacity allocation functionality, the AS-IS scenario of the company is described as a technical timetable planning system (tactical, short term), weakly integrated with operators and operations, with advanced graphic representations, and the need to use an import tool on every vertical application. In contrast, the DESIRED scenario aim the integration with international planning tools and compliance with international standards, and instead of an import tool, the presence of services to share the timetable with other applications, in all phases of the planning cycle. . In relation with the management of vehicle’s master data, the actual situation present a weak integration with time planning systems and management systems of vehicle’s data. The company aim to have in the future an advanced tool allowing the managing and distributing master data integrated with the asset management systems (Rolling Stock Management). The also consider to integrate a tool for depot planning (entrances, exits, operations), related with the scheduling of the vehicles' shifts. . For the analysis and reporting of the service planning, the company actually use simplified calculation tools, based on a limited number of indicators. Most of these activities are performed manually or they use a tool for importing data. The DESIRED scenario reflects the need to have a calculation tool for KPIs and comparison integrated with the planning tools, enabling analysis and reporting on integrated data (generation of transversal KPI).
5. Conclusions
5.1. State of the Art in LATAM
As an approach to conclude the Latin America countries’ overview, key indicators were generated for each country. In this way, the aim is to value the State of the Art of the Transport Industry in LATAM region.
Table [11] shows the results of each country’s evaluation. The key indicators considered are:
. Economic Stability . Metropolitan areas and concentration of people in cities . Infrastructure and Logistic development . Digital Diffusion . Innovation Potential
These indicators were formulated having as reference KPI used by international organizations, as The World Bank or The United Nations, and important consulting companies, as KPMG or Deloitte, to measure the performance and stability of a country, and benefits of investing on it. To perform the grading, it has also been considered all the information collected though the research and explained on Chapter 2: Market Analysis in LATAM. The scale used is a grade from 1 to 6, being 1 the worst and 6 the best country in the defined indicator.
BRAZIL
MEXICO
CHILE
COLOMBIA ARGENTINA
PERU
0 5 10 15 20 25 Economic Stability Metropolitan Areas Concentration Infrastructure and Logistic Development Digital Diffusion Innovation Potential
Table 14: LATAM country’s evaluation
The Results
After the evaluation of the previous indicators, Brazil was the country that obtained the highest score. Therefore, is possible to establish this country as the most relevant actor and most attractive for the transport system integrator sector. Brazil has consolidated its position as a strong and attractive global player with a high degree of economic diversification and one of the five largest economies in the world. The country has a stable democratic government, a strong financial system and reliable domestic market. Therefore, from the overview on Latin America region, Brazil is the country with the most attractive market, were a system integrator player should enter and offer their solutions. Comparing with other Latin America’s countries, Brazil has the strongest Economy Stability, the largest urban agglomerations, the highest Innovation Potential, and an adequate level of Infrastructure and Logistic Development, and Digital Diffusion.
The detailed evaluation is presented below:
. Economic Stability. Brazil represent the country with the highest economic resources, with a Gross Domestic Product (GDP) of 1803,6 billion of USD and a middle-low inflation rate of 8,74%. This country is the world’s seventh largest economy according to the latest World Bank data. The next relevant country is Mexico, with a GDP of 1143,8 billion of USD and a low inflation rate of 2,82%. Argentina was evaluated with the lower grade of 1 point due to the period of economic recession that is going through and the actual high inflation rate of 25,6%.
. Metropolitan areas and concentration of people in cities. Brazil is evaluated with the highest score of 6 as this country has 26 large cities with urban agglomerations of more than one million of inhabitants. Then is Mexico, with 10 large metropolitan cities; following respectively by Colombia, Argentina, Chile and Peru.
. Infrastructure and Logistic development. The evaluation in this indicator has into account the performance of each country regarding two main international rankings: the Global Infrastructure Ranking built by the World Economic Forum and the Logistic Performance Index by The World Bank. Chile is evaluated with the highest score as this country maintain the best transport related infrastructure, higher coverage, and quality and efficiency of logistics services. Then comes Mexico and very close Brazil, both countries has well developed and reliable transportation infrastructure. Brazil has a transport system strongly concentrated in Sao Paulo city, but the infrastructure is not uniformly developed in all the country. The score list continuous with Colombia, Argentina and Peru.
. Digital Diffusion. The highest score is attributed to Colombia for having a high percentage of user smartphone, users of internet and important investments of the Government regarding telecommunication projects with private participation. The score of 5 is given to Chile, although their medium-low investment on telecommunication, this country has around 64% of the population accessing to Internet. The lowest score of 1 is attributed to Peru, as this country has only 28% of smartphone user penetration. Mexico is another country with low smartphone penetration nevertheless there are important projects in telecommunication with 3,5 billion USD in investments.
. Innovation Potential. Innovation is now extensively recognized as a central driver of economic growth, development and citizen’s prosperity. The innovation potential score is based on the results of the Global Innovation Index (2017) which aims to provide countries with a snapshot of their innovation ecosystem. The innovation potential is a central issue for environmental sustainability and for the world’s social and economic well-being. The highest scores were attributed to Chile, Mexico and Brazil respectively. These countries are important innovation actors of Latin America. Chile had made its place within the top 50 most innovative economies, across several pillars, including Infrastructure, Market sophistication, and Knowledge and technology outputs. Mexico represents an active contributor to global value chains, including in high-tech sectors, and in other hand, to scientific publications, R&D, and patenting. Brazil’s strongest pillar ranking is in Business sophistication, and improvements in Human Capital and research.
5.2. Possible opportunities where develop an IT platform for transport operators
Digital technologies have transformed the form we live and how we connect and is not a surprise that it has also shaped how we move from one place to another. Through this thesis, it has been discovered that, in the transportation industry, the real digital transformation is the process by which a company forms a strategy to implement a certain disruptive technology, to improve its business and, secondly, meet in a more efficient way the changing demands of their passengers and related customers [64].
From the State of the Art (Chapter 5.1.), is possible to conclude that Brazil represents most attractive market from LATAM region for Transport Operators. The higher level of attractiveness is firstly supported by its Sustainable Economic Growth. The Federative Republic of Brazil is the fifth largest country in the world; and the third largest in America, after the US and Canada. This country owns a Gross Domestic Product (GDP) of 1803,6 billion of USD. Secondly, the high investments on telecommunications, due to the fact that the Brazilian Government’s investments regarding telecommunication projects with private participation sum around 12,36 billion of USD. Another reason is the Brazilian strategic location and market size. Brazil is a large country with an area of 8 515 770 km², and borders almost all the South America countries, except Chile and Ecuador. Also, an extensive availability of raw materials, large supply of human capital at all levels of education, a large domestic market of 207,8 million inhabitants, and a diversified economy. Regarding the innovation and technology advancements, although the highest score on innovation is attributed to Chile, Brazil has also high technology competence within the sectors of aircraft building, oil exploration, transportations infrastructure, and software development. Brazilian innovation trend includes overall investment on information and telecommunications technology, Business sophistication, Human Capital development, research, and patent applications. All these mentioned configurations define the dominant position of Brazil as a strong and attractive global player and, absolutely, a target market for Transport System Integrator companies and related business.
In other hand, there is no doubt that Argentina is another strong actor in the region. With a well developed rail industry, a strong logistic and transport infrastructure and a high propensity to the integration of its mobility services. A clear example is “SUBE” system card, an integrated paying system valid for all public transportation means currently use in Buenos Aires city. Although, Argentina is the 21th largest economy in the world by total GDP, its economic performance has been irregular, where high economic growth alternated with severe recessions. The country is currently going through one of this recessions. Therefore, a transport operator company must act cautiously if is considering entering this market. Due to the fact that Argentina present a high digital diffusion and an already established mobility integration, the strategy of the transport operator should be to enter with a more innovative offer.
Chile is the country with the strongest level innovation and technology advancements and, as it was mentioned before, had made its place within the top 50 most innovative economies. Regarding the Infrastructure and Logistic development this country is evaluated also with the highest score as it maintained the best transport related infrastructure, higher coverage, and quality and efficiency of logistics services of the region. In the negative aspect, is important to be considered by transport operators that mainly developments are concentrated in Santiago city, the capitol. Respecting to the System Integrator market, there is a strong position of Thales (who supports and is supported by local partners) and Indra who is at the forefront on ITS solutions. Secondary presence of TECSIDEL, Ferrostal, SONDA and Southern Technology Group.
For Colombia, investments must be cautious as major Government’s investments are focused on addressing social and infrastructure problems, the reduction of high levels of poverty and boost of competitiveness and trade links. Adverse political situation and medium-low economic stability should be also an important issue to consider. The country has a strong position on Digital Diffusion, as it has a high percentage of user smartphone, users of internet and important investments of the Government regarding telecommunication projects with private participation. This is a positive scenario for transport operators how intend to enter to the market. Another important consideration is that the only integrated system is present in Bogota city, as the SITP. The other major cities has critical transportation and traffic problems, and have on-going or planned important projects to improvement their infrastructure. Therefore, this scenario represent open of opportunities for a transport operator to invest by offering innovative solutions in Bogota city, and more traditional products in other Colombian’s large cities.
In Mexico, most mobility transportation developments take place in the capital, Ciudad de Mexico; but the lack of control and monitoring of the bus service (high level of informality) leads to congestions, creates bottles necks and conflicts in intermodals points. Some positive aspects are the economic stability (with a GDP of 1143, 8 billion of USD and a low inflation rate of 2, 82%), the infrastructure and logistic development (although mostly in the capital city), and high innovation potential (the highest after Chile). Therefore, there are opportunities for system integrator companies to enter the Mexican market. The strategy should be characterized by a more traditional offering.
The collected information from the Case Study and the performed Functionalities Analysis (Chapter 4.5.) showed that Peru can, eventually, represent a country of opportunities for IT system integrator companies, meaning in the middle-long term. In the first place, the analysis showed that Lima, the only city with metro service, has a transport infrastructure and IT system not well developed, and a very short experience of only 6 years running metro service operations. There is a high number of private companies (mostly of small size) running public transportation operations. Other aspect, is the very low-or lack of it- level of integration with other transport modes. The functionalities analyzed (eGovernance, Passenger Information System and Service Planning) shows most activities covered by the actual systems, but in an insufficient degree, and the AS-IS scenario present a long gap from the DESIRED scenario. In this sense, Peru is a fresh market where innovation in the transport sector is starting to grow and will grow more in the next years supported by strong investments from the private and public sector. There is no doubt that this country will require, in the middle-long term, proper IT System integrator companies to offer their services. The strategy for the IT transport Operators’ companies should be characterized by a more traditional offer in the beginning and increase the level of innovation of their services in the long term, in this way keeping the pace to the growing Peruvian market.
Finally, the research and data collected on this thesis reaffirms the fact that technology developments have a major role to play in the transportation, where digital innovation drives the future and establishes trends. Evidently, the transport industry of the evaluated LATAM countries have been transformed by digital innovation, and there is a positive business scenario sustained by a strong digital propensity of the Latin America society. Although, the study reveled that most important transport infrastructures and projects remain in the capitol cities, there are opportunities to invest in the short-term with a more traditional offer, and in the middle-long term, with more innovative and integrated solutions specially in countries as Argentina, Brazil, Chile, Colombia, Mexico and Peru; where Governments have national transportations plans and future projects that will redefine the sector in the coming years.
Annex
01. Questionnaire for Lima Metro Line 1 Company interview.
. What is your core business? In which geographical areas do you work? . Which is your role in the mobility industry (mobility service production, governance, mobility service offering, infrastructure manager)? . Which are your main partner (name, type and process covered)? . Which are the main critical aspects in transport industry (laws and govenance, technology, customer and
stakeholders relationships/ integration, competition)? . What do you think about future technological trends in transport industry?
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Figures Index
Figure 1 Major air-traffic flows between Regions worldwide 2010. Source: IATA, World Air Transport Statistics ...... 13 Figure 2 Density map of container ship movements. Source: The Geography of Transport Systems (2017)...... 14 Figure 4: Google's autonomous vehicle test...... 19 Figure 3: Uber's self-driving prototype...... 19 Figure 5 Peak hour situation in Chhatrapati Shivaji Central Station - Mumbai...... 19 Figure 6 Anyport Model phases. Source: OECD Seminar, 2011...... 21 Figure 7: The Four Industrial Revolutions. Source: The Geography of Transport Systems (2017)...... 23 Figure 8: The Colonial trade pattern in the North Atlantic, 1800's century...... 24 Figure 9: Representation of the first steam boat invented by John Fitch. Source: Boating World...... 25 Figure 10: Henry Ford's Model T car. Source: Ford Company...... 27 Figure 11: Boeing 707, the first commercial jet plane. Source: Boeing Aerospace Company...... 27 Figure 12: Transportation Industry of Today. Source: Deloitte (2015)...... 29 Figure 13: Tendency of the Transportation Management System. Source: Ericsson Inc...... 32 Figure 14: On-premises with hardware outsourcing model...... 32 Figure 15: 100% On-premises model ...... 32 Figure 16: Cloud model representation ...... 33 Figure 17 Example of technologies associated with ITS applications. Source: ITIF...... 38 Figure 18: Autonomous Cars on the road. Source: U.S. Department of Transportation...... 42 Figure 19: Relevant Latin American countries...... 43 Figure 20: Latin America forecasted GDP for 2018. Source: Focus Economics...... 44 Figure 21 Inflation Rates in Latin America Countries. Source: BBVA Research...... 45 Figure 22: Political Indicators – Argentina. Source: The World Bank (2016)...... 48 Figure 23: Indicators Digital Situation – Argentina, 2016. Source: Statista Inc...... 48 Figure 24: Argentina's Annual Inflation Rate. Source: The World Bank...... 49 Figure 25: Argentina's GDP vs LATAM's GDP. Source: The World Bank...... 49 Figure 26 Railway Freight Transportation Evolution - Argentina. Source: IETSA ...... 51 Figure 27 Brazil's Map ...... 56 Figure 28: Political Indicators – Brazil. Source: The World Bank (2016)...... 57 Figure 29: Indicators Digital Situation – Brazil, 2016. Source: Statista Inc...... 58 Figure 30 GDP Growth 2013 to 2022 - Brazil. Source: IMF...... 58 Figure 31 Inflation 2016 to 2017 - Brazil. Source: World Bank...... 58 Figure 32 Map Existing and Planned Railways - Brazil ...... 60 Figure 33 Map of most important sea and river ports - Brazil ...... 62 Figure 34 Political Indicators – Chile. Source: The World Bank (2016)...... 68 Figure 35 Indicators Digital Situation – Chile, 2016. Source: Statista Inc...... 68 Figure 36 GDP evolution and variations until 2020 - Chile [4]. Source: International Monetary Fund...... 69 Figure 37 Types of goods managed in Chilean Ports on 2015 [8]. Source: DIRECTEMAR Chile ...... 72 Figure 38 FOB Value of the tonnage imported by Port [8] ...... 72 Figure 39 Distribution of investments by type of project 2025 [9] ...... 75 Figure 40: Political Indicators – Colombia. Source: The World Bank (2016)...... 78 Figure 41: Indicators Digital Situation – Colombia, 2016. Source: Statista Inc...... 78 Figure 42 GDP Grow evolution 2008 to 2018 – Colombia. Source: KPMG ...... 78 Figure 43 Future Metro Design - Colombia ...... 84 Figure 44: Political Indicators – Mexico. Source: The World Bank (2016)...... 85 Figure 45: Indicators Digital Situation – Mexico, 2016. Source: Statista Inc...... 86 Figure 46 Inflation Evolution 2006 to 2016 - Mexico. Source: World Bank ...... 86 Figure 47 Railways Map - Mexico ...... 88 Figure 48: Main Sea Ports – Mexico. Source: Secrtary of Transport and communication ...... 90 Figure 49 Freight Transportation in commercial ports during 2010 - Mexico. Source: Trade & Logistics Innovation Center of Monterrey ...... 90 Figure 50 Design of a future Interurban Train Station. Source: Tren Interurbano CDMX ...... 93 Figure 51 Project's Trip Estimations. Source: Tren Interurbano CDMX...... 93 Figure 52 Map of Peru with administrative divisions...... 94 Figure 53: Political Indicators – Peru. Source: The World Bank (2016)...... 95 Figure 54: Indicators Digital Situation – Peru, 2016. Source: Statista Inc...... 95 Figure 55 GPD evolution in Peru from 2005 to 2015. Source: World Bank ...... 96 Figure 56 Model split in the metropolitan area of Lima and Callao. Source: JICA (2013) ...... 97 Figure 57: Rail Park in Peru by type of vehicles from 2004 to 2015. Source: Empresas Ferroviarias ...... 98 Figure 58: Lima City's Metro Future Network. Source: Ministry of Transport and Telecommunications of Peru...... 103 Figure 59: Graña y Montero Group partners’ structure. Source: CONCAR's Sustainability Report 2015...... 127 Figure 60: Command Management System (CMS) Architecture. Source: CONCAR S.A...... 130 Figure 61: CITYFLO 350 System Architecture. Source: CONCAR S.A...... 132 Figure 62: Modular Architecture EBI Lock 950. Source: CONCAR S.A...... 133 Figure 63: Control Room based on EBI Screen System. Source: CONCAR S.A...... 133 Figure 64: EBI Cab 800 Architecture. Source: CONCAR S.A...... 134
Tables Index
Table 1: Advantages and Disadvantages of Transportation modes ...... 15 Table 2: Comparison between Transportation Modes ...... 16 Table 3: The main players of the Transportation Supply Chain...... 17 Table 4: MaaS pilot platforms around the world ...... 36 Table 5: Comparison between On-premises and Cloud Model ...... 37 Table 6 Intelligent Transport System application areas ...... 39 Table 7 Artificial Intelligence Application Areas ...... 41 Table 8 Indicators regarding economic and social situation - Chile, 2016. Source: The World Bank...... 67 Table 9 Indicators regarding economic and social situation in Mexico, 2016. Source: The World Bank...... 85 Table 10 Indicators regarding economic and social situation in Peru, 2016. Source: The World Bank...... 95 Table 11: LATAM country’s evaluation...... 140