Transportation Technology

2009 IBM Corporation
Lets build a smarter planet: Transportation

V12
Lets Build a Smarter Planet:
Transportation
2 2
Transportation: The big picture.
Passengers and freight
Local and long distance
Commercial or publicly owned
Vehicle and infrastructure manufacturers
Supporting service providers for travel and freight
Mode of transportation
Infrastructure
Automobiles
Trucks
Buses
Railroads
Metro transit
Roads
Parking
Tolls
Rails
Terminals
Bridges
Tunnels
Signals and
communications
Airlines
Passenger
terminals
Air cargo
terminals
Ships and
ferries
Ports
Cargo
terminals
Air
Land Sea
3
Transportation is critically important to civilization.
Across town or across the globe
Freight: Food, clothing, shelter, fuel, materials, manufactured products.
People: Travel to work, school, shopping, healthcare, recreation.
Economic vitality depends on the availability of transportation.
Quality of transportation improves quality of life.
Cities could not exist without transportation of goods into the city.
3
4
Assure safety and security.
Improve operational
efficiency while reducing
environmental impact.
Dramatically improve
the end-to-end customer
experience.
Demands on transportation providers will increase over time, driving
the need for new intelligence and insight, greater connectivity and
transparency, and improved customer service.
DRIVERS OF CHANGE CHALLENGES STRATEGIC IMPERATIVES
Population explosion
World population is growing and
transportation providers will need
to expand capacity to keep up.
Urbanization
As the number and size of cities
grows, pressure on transportation
systems to move people and
materials between and within
those cities grows.
Globalization
The growing interconnectedness
of the world is driving inter-city and
international growth in demand, with
an expectation of improved service.
Technology
Technology now enables the capture
and analysis of real-time information
about the status, location and
condition of everything.
Capacity and congestion
Meet the growing, changing
demand efficiently, consistently
and profitably?
Empowered customers
Deliver transportation choices
and information in the way that
end customers value.
Efficient, green operations
Reduce cost and dependency on
scarce resources while reducing
Safety and security
Unobtrusively reduce exposure
to security risks and increase the
safety of operations, with less
cost and impact on customers.
Predict demand and
optimize capacity and
assets.
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Drivers of change
Exploding populations, urbanization, globalization and technology are
driving change, which creates unique challenges and opportunities
for transportation providers.
It took all of history for human
population to reach 2 billion, and only
one generation to more than triple to
nearly 7 billion.
2 billion / 7 billion
5
International trade in manufactured
goods increased more than 100 times
(from $95 billion to $12 trillion) in the 50
years following 1955.
>100x growth
In 2010 there are 476 urban areas with at
least 1 million people. Thats an increase
of 573% from 1950 when there were 83.
Over half the worlds population now lives
in urban areas.
476 cities over 1 million
Today, there are over 4 billion mobile
phone users, and over 1 billion internet
users, growing rapidly to 2 billion.
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The need for progress is clear.
Traffic congestion costs the European
Union over 1% of GDP, or over 100 billion
Euros per year.
100 billion Euros
Capacity and congestion
By 2020 there may be global demand for 7
billion air passenger trips. Yet airports and
airlines will only have capacity for 6 billion.
(Organization for Economic Cooperation and Development)
The world will spend about $30 trillion over
the next two decades on new roads and
similar projects according to CIBC economist
Benjamin Tal.
$30 trillion
30,000 people from 47 countries
downloaded an airlines new smartphone
application in the first 6 days.
30,000 in 6 days
Empowered customers
60% of consumer sentiment around the U.S.
air travel industry is negative, and there are
19% fewer brand-loyal travelers in 2008 than
in 2006a recipe for commoditization.
60% and -19%
59% of on-line consumer purchases in China
are influenced by user generated content.
59% purchase influence
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The need for progress is clear.

U.S. road traffic congestion during 2007
wasted 2.8 billion gallons of fuel and 4.2
billion hours. Total cost of wasted fuel and
time was $87.2 billion.
2.8 billion gallons
4.2 billion hours
Efficient, green operations
Airlines worldwide generate 3% of all
greenhouse gas emissions. Some say
that because aircraft operate in the upper
atmosphere, the impact may be equivalent
to 13% of emissions from all sources.
3% or 13%
The U.S. Department of Transportation
reports over 41,000 road fatalities every
year from 1995 to 2007.
>41 thousand lives
Safety and security
Airlines spend $5.9 billion per year on
security (IATA). Airports spend >60% of their
operating cost on safety and security (ACI).
$5.9 billion
>60% of operating cost
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The opportunity for progress is clear.
A European city reduced traffic by up to 18%,
and increased use of public transit by 80,000
passengers per day. Citizens voted to support
the project.
18% less traffic
Airline industry environmental targets:
1.5% average annual improvement in
fuel efficiency from 2009 to 2020.

Cap aviation CO
2
emissions from
2020 onwards (carbon neutral growth).

50% reduction in CO
2
emitted by 2050
relative to 2005.

1.5% per year
50% by 2050
One ton of rail freight can be moved 423 miles
using one gallon of fuel, and a single freight train
can replace 280 trucks, reducing fuel use,
congestion and emissions.
423 miles using 1 gallon
A container port in the UK reduced equipment
breakdowns by 10%.
10% fewer breakdowns
A European airport reduced mishandled baggage
by 60% using an innovative RFID-based solution.
60% fewer delayed bags
An Asian high-speed railway achieves
99.15% on-time performance.
99.15% on time
9
The reality of living in a globally integrated world is upon us.
Frozen credit markets, limited access to capital, unpredictable funding.
Economic downturn and future uncertainty of economic growth.
Environmental sustainability challenges and new global regulation.
Oil and fuel volatility and long-term cost escalation.
Information explosion, channel proliferation and loss of market-making power.
Emergence of indirect substitutes and alternatives.
Changing travel demand and shifts in buying behaviors.
The need to increase or decrease capacity rapidly to align with demand.
New customer demands and business models.
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The world is connected:
economically, socially and technically.
10 10
The world is becoming smaller and flatter,
and also smarter.
11 11
This mandate for change is a mandate for smart.
The infrastructures, systems and processes that underpin
how business and society function are becoming
digitally aware, interconnected and infused with intelligence.

The new intelligence applies to how services are delivered, to the movement of people,
freight, money, information, electricity and more. Each represents a chance to do something
better, faster and more productively.

This is a new frame of reference with enormous promise for economic growth, with
opportunities to think and act in new ways.

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Success will depend on deeper, more holistic and informed planning,
collaboration and execution. Transportation providers will need to
become smarter.
PREDICT DEMAND AND
OPTIMIZE CAPACITY AND ASSETS
Predict demand, align transportation
assets and infrastructure deployment
and continuously adapt operations.
DRAMATICALLY IMPROVE THE
END-TO-END TRAVELER OR
CUSTOMER EXPERIENCE
Understand customer needs
and provide information and
services to meet those needs
in the manner preferred.
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TRANSPORTATION
PROVIDERS
IMPROVE OPERATIONAL
EFFICIENCY WHILE REDUCING
ENVIRONMENTAL IMPACT
Continuously balance cost and
environmental impact of scarce
resource use while exploring new
operational alternatives.
ASSURE SAFETY
AND SECURITY
Leverage new sources of
information and new ways
of using that information to
improve security and safety.
13 13
They will do so by becoming
instrumented, interconnected and intelligent.
14
The transistor was
invented 60 years ago

Today, there are 1 billion
transistors for each
person on earth.
1 billion people
are connected to
the internet

Soon growing to
2 billion people.
Over 4 billion mobile
phone subscribers by
the end of 2009
By 2010, there will
be 30 billion RFID
tags embedded into
our world.
15
Almost all usable information was once authored or processed by
a person. That kind of information is now being overwhelmed by
machine-generated data from sensors, RFID, meters, microphones,
surveillance systems, GPS systems and all types of objects.
Volume of digital data

The number of emails sent every day is estimated to
be over 200 billion.

Every day, 15 petabytes of new information is being
generated. This is 8 times more than the information
in all U.S. libraries.

By 2010, the amount of digital information will grow to
988 exabytes (equivalent to a stack of books from the
Sun to Pluto and back).

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With the expansion of information sources comes a large variance
in the nature of the data. This creates significant challenges to
promoting real-time decision making.
Variety of information

Today, 80% of new data growth is unstructured
content, generated by emails, documents, images,
and video and audio.

38% of email archiving decisions receive input from
a C-level executive and 23% from legal/compliance
professionals.

The average car will have 100 million lines of code
by 2010.

The Airbus A380 contains over 1 billion lines of code.
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Decision making velocity is about optimizing the speed of insight as
well as the confidence that decisions and actions taken will yield the
best outcomes.
Velocity of decision making

Every week, the average information worker spends
14.5 hours reading and answering email, 13.3 hours
creating documents, 9.6 hours searching for information
and 9.5 hours analyzing information.

For every 1,000 knowledge workers, $5.7 million is
lost annually in time wasted reformatting information
between applications.

Not finding the right information costs an additional
$5.3 million per year.

42% of managers say they inadvertently use the wrong
information at least once per week.

70% of executives believe that poor decision making has
had a degrading impact on their companies performance.
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Our world is becoming INSTRUMENTED

Giving us the ability to measure, sense and
see the exact condition of everything.

The use of sensors, kiosks, meters, PDAs,
appliances, cameras, smart phones, biometric
devices, turnstiles or the Web.
Instrumentation is about sensing what is happening
right now, whether it is the temperature of a train
wheel bearing, the location of a misplaced suitcase,
metal fatigue in a bridge or the number of cars on
a highway at 6:00 AM.
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Our world is becoming INTERCONNECTED

Allowing people, systems and objects to
communicate and interact with each other in
entirely new ways.

Integrating data across an end-to-end process,
organization or value chain. The interconnection
of people and thingscustomers, drivers,
employees, roads, aircraft, airports, cargo,
supplierscreating the ability to improve
performance.
Integrating unstructured data not associated with a
single system. For example, Web 2.0 communities,
Google searches, etc.
20
Systems, processes, and the way we work
are becoming more INTELLIGENT

Responding to changes quickly and
accurately, and getting better results by
predicting and optimizing for future events.

Sophisticated analytic systems enable patterns
to be recognized, relationships to be drawn
and decision making to be continuous and in
near-real time.
Using advanced analytics to drive smarter outcomes.
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The transformation to smart is enabling us to become
more efficient, productive and responsive.
Traditional approach Smarter approach
Instinct and intuition
Corrective
Years, months, weeks
Decision support
Efficient
Fact-driven
Directive
Hours, minutes, seconds
Action support
Optimized
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An opportunity to think and act in new ways.
Improve operational
Dramatically improve
the end-to-end traveler
or customer experience.
Predict demand
and optimize
capacity and assets.
+ + =
22
Assure safety
and security.
23
Smart transportation:
Predict demand and optimize transportation capacity and assets.
SMART IS
Understanding and modeling a holistic view
of demandacross the transportation network.

SMART IS
Creating dynamic multimodal plans and
models, and executing real-time operations
based on real-time data.

SMART IS
Modeling scenarios and better planning routes,
schedules and maintenance by optimizing
assets, infrastructure and capacity.

SMART IS
Gaining deeper insights into the utilization
of transportation assets and infrastructure.

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Predict demand and optimize transportation capacity and assets.
StockholmIBM solutions improved congestion and
quality of life reducing peak period traffic by 18%. Use
of public transit increased by 80,000 passengers per
day. CO
2
emissions from vehicles were reduced
by 14%. Increased revenue is channeled back into
improving public transportation.
Queensland Motorways reduced road congestion
during peak hours, improved Brisbane commuter
experience and supports local economic prosperity
by avoiding traffic snarls in commercial areas.
A large railway in Asia uses an automated crew
scheduling system that evaluates the skills and location
of available employees in real time to assign staff to
scheduled trains. Employees receive their assignments
via cell phone text messages, and log in to work using
biometric scanners, ensuring positive identification and
access control. The system provides management with
real time information about available staff and forward-
looking intelligence to optimize resource allocation,
reducing staff shortages and overtime expense.
Netherlands Railways uses ILOG software to weigh
56,000 variables including passenger demand and
available assets to assemble and schedule over 5,000
trains per day, realizing a 6% savings in operating
efficiency and saving $28.5M per year. Also improved
on-time performance by 2%, helping capture an
additional $57M in fares.

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Dramatically improve the end-to-end traveler or customer experience.
SMART IS
Increasing revenue and share by developing
more loyal customers who become advocates.

SMART IS
Optimizing capacity to meet demand and
reduce delays.

SMART IS
Reducing cost and differentiating customer service.

SMART IS
Better serving customers by anticipating
and catering to their needs throughout the
journey and by collaborating with adjacent
service providers.

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Dramatically improve the end-to-end traveler or customer experience.
A European airport, in partnership with an international
airline, reduced mishandled baggage by 60% with an
RFID-based baggage handling system. Reduced
transfer time by 22% and operational cost by 40%.
A leading global logistics firm uses ILOG Optimization
software to route and consolidate shipments for their
customers, lowering supply chain transportation costs
by up to 25%.
Singapore Land Transport Authority provides a unified
payment system using smart cards for public transit,
tolls and parking, improving the commuter experience.
Planners use data from the system to develop optimal
routes and schedules, reducing congestion and
increasing the appeal of public transit. Reduced fare
leakage by 80% and cost of fare processing by 2%.
IBM developed an application for Air Canada using the Apple
iPhone, iPod Touch, and Blackberry allowing passengers to
book flights, download electronic boarding passes, check-in,
get flight status and book rental cars and other services.
There were over 30k downloads of the app from 47 countries
in the first 6 days and a 13.5% increase in mobile check-ins.
93% of Air Canada passengers say multichannel self service
has improved their travel experience. Canadian New Media
Award for Best Mobile App of 2009.

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Improve operational efficiency while reducing environmental impact.
SMART IS
Increasing the extended transportation
network capacity using current infrastructure
and assets without increasing spend, including
collaborating with adjacent service and
infrastructure providers.

SMART IS
Saving money and time by knowing the
location, status and availability of your
assetsreducing total resource use and
carbon footprint enterprise-wide.

SMART IS
Increasing the ability to deal with irregular
operations across the transportation network
and modes.

SMART IS
Modeling the financial impact of business
decisions, streamlining planning, and
monitoring performance to maximize
revenue, margins and cash flow.

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Improve operational efficiency while reducing environmental impact.
A U.S. state department of transportation used Cognos
to improve their operational reporting and financial
management, which had a direct positive effect on
their bond rating and interest rates available to them.
A major European railroad reduces maintenance cost
by 30% by moving from curative and preventative
maintenance to predictive maintenance using Maximo.
COSCO, a global shipping firm, engaged IBM to help
optimize their supply chain using the Supply Chain
Network Optimization Workbench (SNOW). As a result
of the engagement, COSCO consolidated from 100 to
40 distribution centers, lowered logistics cost by 23%
and reduced CO
2
emissions by 15%.
Taiwan High Speed Rail Corporation uses IBM Maximo
for advanced maintenance management which uses
condition-based monitoring to predict and act on
maintenance requirements and manage over 320k
asset elements. They have improved asset life and
availability. 99.15% of trains arrive or depart within 6
seconds of schedule.

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SMART IS
Predicting and avoiding vehicle failure.

SMART IS
Better managing security uniformly across
the transportation network with reduced cost,
while protecting the privacy of individuals.

SMART IS
Reducing congestion and accidents by
balancing traffic across routes or modes.

SMART IS
Improving reliability and uptime by optimizing
the supply chain and MRO processes.

30
A U.S. hub airport implemented a digital video
surveillance solution and a security command and
control center. The system also uses information from
biometric handprints and badge readers. The system
is more effective at recognizing risks and alerting the
command center. The effective labor cost savings is
US $2.2m per year.
A national rail system in Europe monitors its rail
infrastructure in real time and resolves more than
50% of issues before they affect train operation
using a service management solution built with
IBM Tivoli software.
Using RFID tags on parts and containers, IBM has
helped a major aircraft manufacturer track aircraft
parts through the entire life cycle including all
maintenance and the plane in which it is used. The
solution has allowed them to be more responsive to
customers, and reduced fleet down-time without
compromising safety.
An Italian parcel delivery service reduced their
security staff and increased the level of security
for their 10 hub facilities using an IBM solution
that centrally monitors intrusion, access control
readers, digital video and smoke detection.
31
The smarter transportation system is an interdependent ecosystem
integrated around standard information, processes and technology.
Participants aggregate, analyze
and act upon data to:
1. Predict demand and
optimize transportation
assets and infrastructure.
2. Dramatically improve the
end-to-end traveler or
customer experience.
3. Improve operational
4. Assure safety and security.
Information
Processes
Technology
Passenger and
journey information
Freight shipment
information
Location, status and
condition of assets and
infrastructure
Usage patterns across
all modes of transportation
Governments
Transportation
providers
Terminal
operators
Freight and
logistics
service
providers
Freight
customers
Influencers:
Associations
and universities
Vehicle and
infrastructure
manufacturers
Passengers
and drivers
Travel
service
providers
Regulators
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IBMs solution strategy is aligned with the needs of
transportation providers.

Predict demand and optimize
transportation capacity, assets and
infrastructure.

Dramatically improve the end-to-
end traveler/customer experience.
Improve operational efficiency while
reducing environmental impact.
Demand and revenue management
Enterprise asset management and MRO
Route and schedule optimization
Traffic modeling and prediction
Irregular operations management
Road user charging
Fleet optimization
Integrated fare
management
Reservation system modernization
Multi-channel self-service
Ticketing and payment systems
One view of the customer
Customer analytics
Loyalty management
Cargo management
Risk management
CRM
Enterprise asset management
Enterprise infrastructure management
Enterprise application systems
Green supply chain optimization
Resource optimization
Carbon management
Condition monitoring
Systems virtualization
Identity and access management
Condition based monitoring
using wireless sensors
Data and application security
Server and endpoint security
Biometric identification
Risk analytics
Digital video
surveillance
Network security
STRATEGIC IMPERATIVES HOW IBM HELPS MEET THE NEED
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What makes IBM different?

IBMs breadth of experience working with transportation providers
worldwide across all modes of transportation is unparalleled.
IBM has strong analytical tools to aggregate, analyze and act upon
data gathered from disparate sourcesproviding solutions for
planning, scheduling, routing, CRM, pricing, revenue management,
intelligent traffic and infrastructure management.
IBM has practical experience implementing innovative solutions to
help clients become smartermore instrumented, interconnected
and intelligent.
IBM is the market leader in collaborating with transportation clients
to deliver: the fastest time to value with minimum risk through
innovative solutions; the most comprehensive portfolio of hardware,
software and services; and deep domain experience and expertise.
IBM Centers of Excellence, IBM research, proofs of concept and
first-of-a-kind projects demonstrate innovation and competence in
solution implementation.

34
Lets work together to drive
real progress.
Weve only just begun to uncover
what is possible on a smarter planet.
The infrastructures, systems and processes that
underpin how business and society function are
becoming digitally aware, interconnected and
infused with intelligence.
The new intelligence applies to how services are
delivered; to the movement of people, freight, money,
information and electricity; and to how billions of
people live and work. Each represents a chance to
do something better, faster and more productively.
This is a new frame of reference with enormous
promise for economic growth, with opportunities
to think and act in new ways.
476 cities with >1 mil population
http://www.citypopulation.de/world/Agglomerations.html

UN 2008 over half live in cities
http://www.un.org/esa/population/publications/wup2007/2007WUP_Highlights_web.pdf

1950 8 cities over 1 mil population
http://en.wikipedia.org/wiki/Megacity

Globalization of trade
http://news.bbc.co.uk/2/hi/business/6279679.stm
http://en.wikipedia.org/wiki/Globalization

Traffic congestion costs the EU over 1% of GDP
http://ec.europa.eu/research/growth/gcc/projects/in-action-airships.html
http://www.computing.co.uk/computing/analysis/2244382/europe-split-best-way-forward-
4723503

US flight delays
http://www.transtats.bts.gov/HomeDrillChart.asp

London to Paris rail share
http://en.wikipedia.org/wiki/Eurostar#cite_note-103

4.6 billion cell phones by end of 2009
http://en.wikipedia.org/wiki/Mobile_phone

Traffic congestion costs the US $87.2B, 2.8 gallons of fuel, 4.2 billion hours according to Texas
Transportation Institute in 2009
http://mobility.tamu.edu/ums/media_information/press_release.stm
http://mobility.tamu.edu/ums/

Airlines spend $5.9B per year insecurity (IATA), while airports spend 60-80% of operation costs
on safety and security (ACI)
http://www.iata.org/pressroom/pr/2009-11-10-01.htm
http://www.airports.org/cda/aci_common/display/main/aci_content07_banners.jsp?zn=aci&cp=1-
7-3475^33442_725_2__

41,000 US road deaths in 2007
http://www.bts.gov/publications/transportation_statistics_annual_report/2008/html/chapter_02/ta
ble_02_02_01.html
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2009 IBM Corporation

Lets build a smarter planet: Transportation

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