10.4 – Future Transportation Systems

Author: Dr. Jean-Paul Rodrigue

Transportation changes are either incremental or revolutionary. The future of transportation will be influenced by a higher integration between physical and information systems.

1. Past Trends and Uncertain Future

Where are the flying cars? Where are the supersonic passengers jets? Just around the corner…

Throughout history, transportation remained limited in scale and scope. In the two centuries since the introduction of mechanized transportation, the capacity, speed, efficiency, and geographical coverage of transport systems have improved dramatically. The goal to move passengers and freight faster, in greater quantities, safely, and efficiently remains the core motivation to improve transport technology. Modes, terminals, and networks alike have been subject to remarkable changes that come with two functional aspects:

  • Revolutionary changes. Concerns an entirely new technology that creates new markets and growth opportunities for transportation and the economy. It often marks the obsolescence of an existing transport mode as the new mode has substantial cost, capacity, or time benefits. Revolutionary changes tend to be rare but profound since they commonly involve the setting of entirely new networks. They often cannot be predicted, but it is possible to assess their potential impacts once they occur. Yet, in the early phase of their introduction, the potential of innovation can be exaggerated. This can lead to over-investments in technologies with limited market potential and profitability.
  • Incremental (evolutionary) changes. Concerns the stepwise improvement of existing transport technology and operations. This increases productivity with more capacity, lower costs, and better modal or terminal performance. These changes can result from better-performing infrastructure and vehicles or using information technologies to manage operations more effectively. Incremental changes are possible to extrapolate, but the rate of change they bring is difficult to assess.

Considering these changes, the following observations can be made:

  • Due to its geographical and technical specifications, each mode was characterized by different technologies and different rates of innovation and diffusion. A transport innovation can thus be an additive/competitive force where a new technology expands or makes an existing mode more efficient and competitive. It can also be a destructive force when a new technology marks the obsolescence and the demise of an existing mode and its business model, often through a paradigm shift. Still, in many cases, an older technology will endure because of its broad level of adoption, utilization (preferences), accumulated capital investment, or even regulations. This is commonly known as path dependency. Vested interests in an existing mode, particularly if publicly owned, may also delay or prevent innovation.
  • Technological innovation was linked to faster and more efficient transport systems. This process implied a space-time convergence where a greater amount of space could be exchanged for a lesser amount of time. The comparative advantages of space could thus be more efficiently used.
  • Technological innovation in the transport sector has been linked with the phases of the economic development of the world economy. Transportation and economic development are interlinked, as one cannot occur without another. Any technological change within the transport sector is linked with new economic and social opportunities.

One of the pitfalls in discussing future trends involves looking at the future as an extrapolation of the past. It is assumed that the future will include an existing technology, but merely operating on an extended scale beyond what is currently possible. It can be seen as an incremental change bias. The parameters of such an extrapolation commonly involve greater speed, mass availability, higher capacity, and better accessibility, implying similar or lower costs. Popular literature (such as Popular Mechanics or Popular Science) of the first half of the 20th century is abundant with extrapolations and speculations, some spectacular, about how transportation technology would look in the (their) future. Looking at such perspectives is labeled “paleo-futurology”; how the past perceived the future.

Predicting future outcomes must consider what is within the realm of forecasting, scenario building, or speculation. Forecasting evaluates near-term outcomes by considering that parameters do not change much. In contrast, scenario building assesses possible outcomes based on expected fluctuation in key parameters. A common flaw in predictions is their incapacity to anticipate paradigm shifts brought by new technologies as well as economic and social conditions. Another drawback relates to the expectation of a massive diffusion of new technology with profound economic and social impacts, and this over a short period of time (the “silver bullet effect”). This rarely occurs as most innovations go through a cycle of introduction, adoption, growth, peak, and then obsolescence, which can take several years, if not decades. Even in the telecommunication sector, which accounts for the fastest diffusion levels, adopting a technology takes place over a decade.

Any discussion about the future of transportation must start with the realization that much of what is being presented as plausible is unlikely to become a reality, especially if the extrapolation goes several decades into the future. Thus, as much as someone would have been unable at the beginning of the 20th century to even dream of what transportation would look like half a century later (e.g. air transportation and the automobile), similar limitations may be applied in the 21st century. However, since substantial technological innovations took place in the 20th century and the laws of physics are much better understood, evaluating future technological trends is achievable. Still, the socioeconomic impacts of new transport technologies and systems remain complex and rarely lead to an accurate assessment.

2. Automation and Information Technologies

Since the introduction of commercial jet planes, high-speed train networks, and containerization in the late 1960s, no significant technological change has impacted passengers and freight transport systems, at least from a paradigm shift perspective. The early 21st century is an era of car and truck dependency, which tends to constrain the development of alternative modes of transportation. A new paradigm shift is emerging, which will likely trigger the most important technological transition in transportation since the introduction of the automobile.

The development of information and communication technologies (ICT) to improve the speed, efficiency, safety, and reliability of mobility, aims at complete or partial automation (driving assistance) of the vehicles and terminals (ports, airports, rail stations, and distribution centers). These systems could involve improving existing modes, such as automated highway systems, or creating new modes and transshipment systems, such as automated vehicles for public transit, and freight transportation (automated terminals). Automation remains a highly disruptive force that has the potential to impact employment negatively in transportation and related sectors.

The diffusion of global positioning systems, sensors, and mobile communication technology has substantially improved navigation and congestion mitigation. A network of connected and identifiable devices commonly labeled as the Internet of Things is taking shape. These devices can be embedded in transportation modes, such as vehicles and containers, which then can be more effectively managed and routed, which provides practical support for better routing and demand forecasts. A vehicle can thus be rerouted if congestion or another form of disruption occurs, and any transport asset can be better maintained through predictive analysis and reports from sensors. A further evolution considers the Physical Internet as a metaphor for integrating digital and physical transportation and logistics assets to create a network of logistics networks.

On-demand mobility services are emerging, creating a hybrid operational model between the taxi and the private vehicle. With information technologies, fleets of cars can be managed and leased in real-time, resulting in fewer vehicles required to convey a similar level of mobility. In turn, less parking space is needed, improving congestion in high-density areas. Empirical evidence underlines that such schemes can increase the productivity of vehicles between 30 and 50% when on-demand services are compared with conventional taxi services. The main factors behind this rise in productivity involve a more efficient matching technology between the driver and the passenger, the large scale of on-demand car services (more supply to match the demand), restrictive taxi regulations (often limiting their numbers and market areas), and flexible supply models coupled with yield management systems (surge pricing). This also changes the ownership structure of dominantly privately-owned vehicles, towards a leasing system.

Driverless (automated) vehicles are a further evolution of the integration of ICT into transportation. Still, in an urban setting, a large amount of safety factors to consider make such implementation more of a social than a technical constraint. Improved navigation and coordination of vehicles can reduce congestion substantially, particularly when bottlenecks are created by driver behavior (e.g. sudden braking). Fewer accidents will be a substantial relief from the causes of congestion. There are other applications of automation technology, particularly in air transportation, which would raise many safety considerations. Therefore, remote-controlled airplanes are more likely to be initially applied to air cargo operations. A similar potential exists for maritime transportation as the recent decades have seen automation considerably reduce crew sizes required to operate ships.

However, it is self-driving trucks that may offer the most significant potential. The long-distance segment uses well-defined highways and stable driving conditions prone to automation. In such a setting, trucks can coordinate their respective mobility by assembling convoys (or platoons) where each vehicle follows the other closely, improving fuel consumption. Self-driving trucks can also service repetitive short-distance hauls, such as between ports, rail yards, and distribution centers. This can be highly disruptive from a labor standpoint since 3.5 million truck drivers were reported in the United States in 2021, representing the highest employment sector. The introduction of automated trucks is likely to be incremental and route-specific. Automated vehicles are already used at port terminals to move containers between docks and stacking yards. Truck automation creates a paradigm where the long haul is most prone to automation but shows the least potential for electrification due to powertrain requirements. Another category of automated vehicles concerns drones that can have a variety of usage, such as the monitoring and inspection of infrastructure as well as being able to undertake the fast delivery of light packages.

Driverless vehicles are also likely to improve the mobility of marginal groups (e.g. the elderly and people with disabilities). Still, as importantly, they would enable more efficient use of vehicle assets. With fewer accidents, the social costs of automobile use and insurance rates would drop. Security standards could change since driverless vehicles are less prone to accidents, implying that vehicles could be built with fewer physical safety features and less weight. Since fewer parking spaces may be required, this could free a substantial amount of road space and land that could be converted for other uses. This raises the question of the role of mass transit in a context where users could have access to mobility almost on demand. This question is relevant since many transit systems are heavily subsidized, and their ridership is either stable or declining. Many gains remain to be achieved by better managing existing infrastructures and vehicles. Yet, the diffusion of ICT is influenced by the business models of the transport sectors in which it takes place.

3. Alternative Modes and Fuels

There is a range of modes that could replace but more likely complement existing modes, particularly for the transportation of passengers. One such technology is maglev, short for magnetic levitation, which has the advantage of having no friction (except air friction), enabling reaching operational speeds of 500-600 km per hour. Higher speeds are possible if the train circulates in a low-pressure tube. This represents an alternative for passengers and freight land movements in the range of 75 to 1,000 km. Maglev improves from the existing technology of high-speed train networks, which face technical limitations at speeds higher than 300 km per hour. Maglev was the first fundamental innovation in railway transportation since the Industrial Revolution. The first large-scale commercial maglev system opened in Shanghai in 2003 and has an operational speed of about 440 km per hour. Still, this system operates on a short 30 km segment and appears unprofitable.

Further variations of the guided tube concept involve capsules circulating in a partially depressurized tube using an electric induction engine (dubbed as “hyperloop”). However, outside test projects, no functional system has yet emerged. This underlines that some areas can circumvent transport technology and directly adopt a new one without the prior capital investments in infrastructure. For instance, several developing economies have avoided setting wire-based telecommunication networks to move directly to cellular networks. A similar trend could apply to the maglev/hyperloop technology circumventing conventional high-speed rail systems. If this is the case, several regions could move directly to a more effective mobility system without costly investments in high-speed rail.

Alternative fuels mainly concern existing modes, but the sources of fuel, or engine technology, are modified. For instance, hybrid vehicles involve the use of two types of motor technologies, commonly an internal combustion engine and an electric motor. Simplistically, braking is used to recharge a battery, which then can be used to power the electric motor. Although gasoline appears to be the most prevalent fuel choice, diesel has a high potential since it can also be made from coal or organic fuels. Diesel can thus be a fuel part of a lower petroleum dependency energy strategy. Hybrid engines have often been perceived as a transitional technology to cope with higher energy prices. There is also a possibility of greater reliance on biofuels as an additive (and possibly a supplement) to petroleum. However, their impacts on ecosystems and food production must be carefully assessed.

Still, electric car engines are one of the most promising alternative technology. One of its first advantages relates to a lower environmental footprint, such as fewer CO2 emissions, even if electricity generation comes from a fossil fuel plant. Electric vehicles are less mechanically complex since they have fewer moving parts (no internal combustion engine and transmission) and a longer life cycle. Such vehicles could be cheaper to build and maintain, increasing the range of manufacturing locations, but reducing the need to transport a complex variety of parts. Lower acquisition and operating costs improve the affordability of mobility, particularly if electric vehicles are shared. It is, however, on the conventional internal combustion engine services that electric vehicles are likely to have the most influence. About half of the car maintenance expenses are related to the engine. Therefore, switching to electric vehicles will negatively impact the vehicle repair and refueling industry.

Regarding refueling, the usage of electric vehicles continues to raise the question of electricity supply in terms of additional demands on the grid, which can be substantial. One electric vehicle can easily double the power consumption of a single residence. As more electric vehicles are introduced, upgrading residential wiring and local distribution grids will be necessary. Switching to electric delivery trucks can also be challenging as a single distribution center consumes, on average, 0.5 MW of electrical power per day. If delivery trucks were to be converted to electricity, these 300 vehicles would consume about 8 MW daily, 16 times more electricity. Wireless power transfer technologies have the potential to be used to charge electric vehicles simply by being in proximity to a recharge node or even being recharged as they drive around equipped roads.

Therefore, the diffusion of electric vehicles must include strategies for the supply of electrical power, preferably from alternative sources such as solar or wind energy. Battery charging strategies could improve the stability of energy systems through better coordination between the supply and demand of electricity. In periods of low demand, more electric vehicles could be charged, taking advantage of lower electricity prices. A fleet of electric vehicles can even store surplus electricity, which could be distributed in the grid in a period of peak demand. Another consideration relates to the whole retail structure linked with existing petroleum refueling stations, which is a source of revenue to compensate for the relatively low-profit margins of fuel sales. This also brings the issue of fuel taxation and subsidies since, for many governments, fuel taxes are used to fund infrastructure maintenance and developments while other governments are subsidizing fuel costs to support poorer segments of their populations.

Far more reaching in terms of the energy transition are fuel cells, which involve an electric generator using the catalytic conversion of hydrogen and oxygen. The electricity generated can be used for many purposes, such as supplying an electric motor. Current technological prospects do not foresee high-output fuel cells, indicating they apply only to light vehicles, notably cars, or small power systems. Nevertheless, fuel cells represent a low environmental impact alternative to generating energy. Additional challenges in the use of fuel cells involve hydrogen storage (especially in a vehicle) as well as establishing a distribution system to supply users.

New materials can also be implemented on both vehicles and infrastructures. For instance, the latest generation of aircraft is made from polymers and composites, reducing weight, improving durability, and lowering maintenance costs. Advanced materials can also be used to construct and maintain transportation infrastructure, particularly with modular construction that can assemble structures such as bridges faster. Advances in nanotechnology also allow better and longer-lasting materials, such as asphalt, concrete, and even steel, to be used for roads. This increases the lifespan and the durability of infrastructure and reduces maintenance costs.

Transportation modes can also be introduced to deal with specific transportation constraints that mainstream transportation modes are less able to accommodate. The use of a new generation of dirigibles to transport mostly freight in areas difficult to access (such as the Arctic) is an example. On the other side of the mobility spectrum, urban transportation shows potential for more effective use of alternative modes, such as a greater reliance on micro-mobility and walking, particularly in car-dependent cities, and this for passengers and freight transportation.

4. Drivers of Change

There have been few cases in recent history where revolutionary transport technology was the outcome of a public endeavor. Still, the public sector played a growing role as transport innovations became more complex and incited a concerted approach in infrastructure, management, or regulation. For instance, the massive diffusion of the automobile in the 20th century was associated with regulations concerning operations (e.g. speed limits), safety (e.g. seatbelts), emissions, as well as public investments in road infrastructures (national highway systems). While vehicle production came to be dominantly private, road infrastructures were perceived as a public good. Similar processes took place for maritime transportation (port authorities), air transportation (national carriers and airport authorities), rail (national carriers), public transit (transit agencies), and telecommunications (frequencies). The complexity of transport systems, particularly with information technologies, is likely to rise in the future. Will this complexity be linked with additional public-sector involvement?

Future transportation systems are also facing growing concerns related to energy, the environment, safety, and security. Transport systems will either be developed to accommodate additional demands for mobility or offer alternatives (or a transition) to existing demand. A significant challenge relies on the balance between market forces and public policy, as both have a role to play in the transition. Since transportation is a derived demand, a core aspect of future transportation pertains to economic activity and the extent to which it will be linked with specific passengers and freight volumes. Economic development and globalization have been important factors behind the surge in mobility. More recent trends toward automation and new manufacturing processes impact supply chains and their geographical characteristics. It remains to be seen to what extent this process will endure and if the global transportation system will become more globalized or regionalized:

  • Globalization. Assumes affordable energy prices, growing accessibility, and an enduring openness to trade. The exploitation of comparative advantages continues, leading to a more complex lattice of trade and transportation systems. Various transnational relations are superposed over networks of regional transportation.
  • Regionalization. Assumes higher energy prices and a commercial environment more prone to protectionism, which conveys more friction to long-distance interactions. The exploitation of comparative advantages is thus done on a more regional foundation. This environment does not forbid international trade, but the latter mostly concerns goods and services that cannot be adequately substituted. It is also prone to the setting of more effective regional transport systems.

A fundamental component of future transport systems, freight, and passengers alike, is that they must provide increased flexibility and adaptability to changing market circumstances (origins, destinations, costs, speed, etc.), some of which are unforeseen while complying with an array of environmental, safety and security regulations. This cannot be effectively planned, and governments have consistently been poor managers and slow to understand technological changes, often impeding them through regulations and preferences for specific modes or particular technologies. Regulations tend to prevent technological innovations and their potential positive impacts. This is often referred to as the status quo bias, where the dominant strategy of a public agency is to maintain existing conditions. Also, if a new mode or technology competes with a nationalized transport system, or with a transportation sector with strong political influence, the government will likely intervene to prevent its emergence with regulations (e.g. permits) and delays (e.g. public safety hearings). Recent history indicates that when deregulation occurred, it was associated with changes and innovations in the related transportation sectors. One of the most salient examples is the Staggers Act in American rail transportation, which was linked with substantial productivity improvements and new investments.

New transportation technologies are becoming increasingly complex, and governments often have budgetary constraints and the lack of capabilities to implement them directly. Thus, it is likely that future transport systems will be the outcome of private initiatives, or public-private partnership schemes, with the market (transport demand) being the ultimate judge of the true potential of new transport technology. Economic history has shown that market forces will always try to find and adopt the most efficient transportation form available. Some transport systems or technologies have become obsolete. They have been replaced by others that are more efficient and cost-effective based on the prevailing input conditions, such as labor, energy, and commodities. This fundamental behavior is likely to endure in the setting of future transportation systems, reflecting the abundance, or scarcity, of resources, energy, space, and time.

Still, anticipating future transport trends is very hazardous since technology is a factor that historically created paradigm shifts and is likely to do so again in the future with unforeseen consequences. For instance, one of the major concerns about future transportation for London, England, in the late 19th century was that by the mid-20th century, the amount of horse manure generated by transport activities would become unmanageable…


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