Future Transportation

Alexandra Vardanian, Grace Oppong Asamoah, Marcel Halilovic,

Pauline Dörr, Sandibed López Badillo
Transportation Management
February 2020
International Business
Table of Contents

TABLE OF CONTENTS............................................................................................... 1

1 INTRODUCTION........................................................................................................2

2 CURRENT TRANSPORTATION...............................................................................3

3 FUTURE TRANSPORTATION..................................................................................5

4 SUSTAINABILITY IN TRANSPORTATION............................................................10

5 CONCLUSION.........................................................................................................12

REFERENCE LIST..................................................................................................... 13

2
1 Introduction

Globalization is according to the Cambridge Dictionary “the increase of trade around

the world[…]” [ CITATION Cam20 \l 1031 ]. This definition portrays the importance of
transportation methods. Without various transportation means product A could not be
found in time B in country C.

How have transportation modes changed and how have they influenced trade? To
answer this, the focus will be held on a simple product, a denim jean. The process of
taking the raw material from a cotton flower and transforming it into a retail product
has different steps that involve different countries hence different transportation
methods. Why do the transportation methods have to change? Because it is cost-
efficient. However, these may not be entirely sustainable and time-efficient. Because
of humanity’s increase in instant service, solutions need to be found. These solutions
must offer efficiency in time and costs and must be considerate towards future
generations.

In the next coming years, there will be a lot of changes in the way how transportation
in the world of logistics will look like. There will be a lot of new innovative
transportation methods, to replace the current ones. Especially autonomous vehicles,
electric vehicles, and drones are on the uprising. However, there are not only new
transportation methods in the future but also other innovative ideas and concepts that
will influence the way how transportation in the future will look like. This report will
start by explaining the current transportation modes, then what the future of
transportation withholds, and lastly delineate the sustainable aspects

3
2 Current Transportation

In this part, the status quo of current transportation is going to be examined. It will
cover the most commonly used transportation modes in the current world of
transportation and logistics. The modes can be broken into the following three basic
categories, which include air, water (shipping) and land (rail, road). (Rodrigue, 2020).
More specific examples of modes will be given further below. This report is starting
off by explaining what factors need to be considered by choosing a current
transportation mode.

The main factors that are taken into account when choosing a transportation mode
are the value of the shipped goods, their quantity, and the travel distance. For
example, road transports compete for short distance travels with small cargos.

Terminal costs

Costs include loading, shipment, and unloading. In some cases, for example,
airports, also gate fees, pilotage and handling charges are included.

Linehaul costs

The distance the freight or passenger has to travel. Included in linehaul costs are
also the weight of the cargo, labor and fuel and on a rare occasion also
transshipment.

Capital costs

These include physical assets such as terminals, vehicles, and infrastructures.

(Notteboom, 2020)

4
In the following the current transportation modes will be explained:

Air

Aircraft is broken into two categories, first being the one that transports passengers
with a limited amount of cargo and the latter exclusively transporting cargo. Air is one
of the fastest ways to ship freight and is the preferable option, for example, for
perishables that need to be moved quickly. This transportation mode includes
airports, airlines and air traffic control (ATC). ATC gives aircraft direction both during
their time in the air and on the ground at the airports. 

Road

Road transportation is the moving of passengers and freight on the road. Costs are
relatively low for this mode, compared to air transportation. This is the best option for
short-distance shipments. Road transportation includes also many risks and
limitations, like it being more prone to accidents, delays due to traffic jams and the
roads being unstable. Because of that, goods can be damaged.  (The Economist
Times, 2020).

Rail

It is also known as train transportation and is one of the most used transportation
modes, due to its high cost-effectiveness. It can be applied for both short and long-
distance transportation, it is also one of the fastest transport modes on land.
Transportation by train is a safe way to transport goods, due to its low risk of
accidents. Therefore, the goods will not be damaged by transport. (The Economist
Times, 2020).

Maritime

Ships are able to handle different kinds of cargos, like containers, refrigerated goods,
and natural gas. It enables long-distance transportation with a large number of
goods. The large sizes of the ships make maritime a cost-efficient mode. There are
four main categories in the maritime industry: passenger vessels, bulk carriers, roll-
on roll-off (enables cars, trucks, and trains to be loaded onboard) and general cargo
ships. (Notteboom, Maritime Transportation, 2020)

Pipeline

Pipelines are meant to transport raw materials such as gas, or liquid resources for
long distances. Some examples of transportable goods are oil and chemicals. This
mode can be automated, is economical, safe, low cost and is continuous. They don’t
occupy much space and can transport large amounts of products. The downsides of
pipelines are that once they’re built, neither their direction or their carrying capacity
can be changed. (The Advantages of Pipeline Transportation, 2020)

5
3 Future Transportation

In the next coming years, there will be a lot of changes in the way how transportation
in the world of logistics will look like. There will be a lot of new innovative
transportation modes, in order to replace the current ones. Especially autonomous
transportation, electric vehicles, and drones are on the uprising. However, there are
not only new transportation modes in the future but also other innovative ideas and
concepts that will influence the way how transportation in the future will look like. This
section is going to explain the most important trends in the future of transportation
and their advantages and disadvantages will be evaluated.

Autonomous vehicles are one of the most influential and anticipated trends when it
comes to future transportation. Autonomous vehicles are able to sense data from its
surroundings, based on these gathered data the vehicle can regulate the speed and
direction where it needs to drive by itself.

Autonomous Vehicles

Autonomous vehicles have sensors that are all around the vehicle, this helps to
create a map of its surroundings and to recognize cars that are nearby or other
things that are on the road such as street signs and barriers on the side of the
highway. Autonomous cars also make use of video cameras. These are specially
used for the detection of streetlights, pedestrians, reading of the streetlights and to
detect nearby vehicles. There are special Lidar sensors that send out laser pulses to
nearby objects, these again will be reflected. The vehicle then measures the time
between sending the laser pulses and the reflection. Based on this data, the car can
identify the distances between the car and other objects in the surrounding. This
process is repeated one million times per second by the Lidar sensors. From all this
information the vehicle can create a real-time 3D-map. This map is so detailed that
the vehicle can identify all the objects in its surrounding, this is also what makes the
vehicle take the right decisions in traffic, for example, if there is a stop sign the Lidar
sensors identify the stop sign and then makes the decision to stop the vehicle
[ CITATION Bli20 \l 1031 ], [ CITATION PWC16 \l 1031 ], [ CITATION Sha20 \l
1031 ].

The usage of autonomous cars has several advantages that will help transportation
and logistics in the future.

The first advantage of autonomous vehicles is that there is a reduction in human

error. Computers take away the possibility of human error and distractions whilst
driving. Second, there is a reduction of the human workforce and an increased
efficiency in delivery processes. A comparable point to the first point is the reduction
of road accidents. While autonomous vehicles are not yet completely safe and
accident-proof, especially in certain weather environments and road conditions,
various reports that have been conducted claim that autonomous transportation will
lead to a significant decrease in accidents compared to human-driven vehicles.
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There is also a decrease in traffic jams and congestions. Autonomous vehicles will
be programmed to take the most optimal route and will also not be susceptible to
delayed human reactions that often lead to traffic backups. The last major advantage
is the saving of costs. Autonomous vehicles can result in cost savings for the
companies that use them. There will be a large upfront investment in buying a vehicle
that is capable of autonomous driving, but over time, this is expected to pay off
through a combination of increased efficiency and a decrease in drivers that have to
be paid. 

However, autonomous vehicles bring also disadvantages with them. The first one is
the loss of jobs. While the vehicles create new jobs in certain positions, they will also
most likely lead to some truck drivers losing their jobs. Furthermore, there will be a
need for new security concerns, which lead to the need for new regulations and laws.
Autonomous vehicles are vulnerable to hackers and other types of criminals,
because of the software that they operate on and no one is protecting the goods from
hijacked. Besides the fact that the technology still needs to be optimized, state
regulations and laws will prevent autonomous vehicles in general from being
permitted on the road in every state. Regulatory environments are not currently in
place in most countries and liability issues are not clear yet. The last point is that
ethical questions remain especially in relation to emergency situations [ CITATION
PWC16 \l 1031 ],[ CITATION a1a20 \l 1031 ] .

UAV’s & Drones

The usage of drones in transportation is currently one of the most promising

innovations. Due to their precise controls, well flight planning, GPS mapping, and
large carrying capacities, drones are very attractive transportation modes. Drones
are equipped with cameras that are not only there for giving the pilot an overview of
the environment, but it is also used to identify items. These cameras can
automatically read QR-Codes in order to identify products, cargo, machinery, and
equipment. Drones are also equipped with RFID-Scanner (Radio Frequency
Identification) that help to locate and identify items that are not easily visible.
Currently, most of the drones need a pilot in order to operate. The pilots use a tablet
in order to properly navigate the drones and direct them to the right locations. The
integrated camera offers real-time visibility, which can help to reduce a lot of time in
reaching areas of interest much faster than manually checking. Also, the drones are
used to make inspections of machinery that are used in manufacturing processes,
this is especially an advantage due to the fact that operations would not need to be
stopped anymore. The fact that drones are controlled via tablets, makes them very
versatile. Tablets can easily be added to forklifts and other vehicles in warehousing
or transportation, therefore it makes it simple and accessible for workers to use
drones to solve activities that need actions. Another aspect to consider is when using
drones for transportation, is that the drones and the tablets need to be able to survive
rough weather conditions, such as rain, snow, heavy cold, and bright sun [ CITATION
PWC16 \l 1031 ],[ CITATION Jim20 \l 1031 ].
7
The utilization of drones has different facets of advantages and disadvantages which
will be portrayed in the following. 

The first advantage is cost efficiency. Drones have gained their popularity precisely
because of their affordable prices. There is also a reduction in the workforce and a
faster delivery system. The new delivery drones announced by Amazon would be
able to deliver small parcels in less than 30 minutes. There will be a new service that
will soon be known as Air Prime. Drones can be used in agriculture, too. The
agriculture uses more and more drones for various missions of analyzes, controls,
surveillance, and treatments. Drones are equipped with cameras, sprayer or other
sensors coupled to the GPS to realize the detailed maps field.  

One major disadvantage is that safety and privacy concerns may hamper market
acceptance. Also, regulations in most countries are not sufficient for commercial use
in public areas like delivery. Another disadvantage is the short flight times. It is
possible to fly the drone just 20 minutes on a full charge. And the disadvantage of
losing jobs or taking away future jobs. Drones will replace one part of human labor.
Mostly industries such as agriculture, parcel delivery, surveillance, rescue services,
etc. are affected [ CITATION PWC16 \l 1031 ], [ CITATION Dro20 \l 1031 ] .

3D-Printing

The impact that 3D-printing has in manufacturing will change the way of how the
current transportation will look like. It has an impact on the short term as well as the
long-term planning of transportation. 

3D-printing builds up layers of the used material based on the scanned prototype.
This means that the 3D-printer scans the product that should be printed or takes
information based on a 3D-model that was created on the computer. This template is
then going to be replicated by the 3D-printer, it draws the structure of the template
and then creates a layer of the used material. This process is going to be repeated
by the printer over and over again until the template is 100% replicated. Currently,
3D-printer can use only a limited amount of materials, these are plastics, glass,
ceramics, liquids, organic materials, cement, bituminous concrete or metal powders.
Due to the fact that the accuracy of the lasers is very high, it is almost guaranteed
that there will not be any misprints or mistakes. Especially smaller parts can be done
by companies themselves, with 3D-printing. Also, there is no matter of location,
because 3D-printers work everywhere. If 3D-printing becomes a common practice in
manufacturing, transportation changes drastically. There will be almost no need to
transport intermediary parts, the focus will mostly shift to transporting raw materials
that are used for the 3D-printing. Therefore, also the planning, financing, know-how,
use of vehicles and much more of transportation will be affected by 3D-printing. It
might even be that the amount of transportation will decline [ CITATION PWC16 \l
1031 ], [ CITATION Car14 \l 1031 ].

8
3D Printing is a very impactful innovation and has a lot of positive influences on
transportation in the future, however, it also brings disadvantages to it.

The first one is the lower demand for transportation because transported goods
would mostly be raw materials. Then the possibility of a flexible design. 3D-printing
allows for the design and print of more complex designs than traditional
manufacturing processes. This also applies to rapid prototyping. 3D-printing can
manufacture parts within hours, which speeds up the prototyping process. This
means, that each stage will be completed faster. And because of 3D-printing, print on
demand doesn’t need a lot of space to stock inventory, unlike traditional
manufacturing processes. It saves space and costs as there is no need to print in
bulk unless required. Another advantage that is also important for the future is that
because of 3D-printing, waste can be minimized. The production of parts only
required the materials needed for the part itself, with little or no wastage as compared
to alternative methods that are cut from large chunks of non-recyclable materials.
The last one is that it is cost-effective. As a single step manufacturing process, 3D-
printing saves time and therefore costs associated with using different machines for
manufacture. 

One disadvantage is the limited materials. While 3D-printing can create items in a
selection of plastics and metals, the available selection of raw materials is not
exhaustive. Then, there is a restricted build size. 3D-printers currently have small
print chambers which restrict the size of parts that can be printed. And 3D-printing is
a static cost unlike more conventional techniques like injection molding, where large
volumes may be more cost-effective to produce. And then there is like in every point
the disadvantage of the reduction of manufacturing jobs. Because of 3D-printing,
there might be a potential reduction in human labor, since most of the production is
automated and done by printers. Many third world countries rely on low skill jobs to
keep their economies running, and this technology could put these manufacturing
jobs at risk by cutting out the need for production abroad. The last disadvantage is
copyright issues. There might be a greater possibility for people to create fake and
counterfeit products and it will almost be impossible to tell the difference. This has
evident issues around copyright as well as for quality control [ CITATION PWC16 \l
1031 ].  

Internet of Things

The Internet of things is the connection, data sharing, and collaboration between
digital devices. This innovation will affect the way how transportation will look
drastically. Whole transportation networks will be connected via the internet of things
and share information with each other. This means that cargo, trucks, ships, trains,
etc. are connected with monitoring software. This makes the whole transportation
much more transparent and reactive, especially due to its real-time data sharing
where data from the cargo can immediately arrive at the monitoring software and
therefore prevent issues. There is also a high automatization of processes if the

9
software detects issues it can automatically react on these and send data to the point
where the issue occurred, there again the point of issue can react to the instructions
of the software. Especially when in combination with autonomous vehicles the
internet of things is a very innovative tool. For example, if there is a traffic jam on the
highway the software can send instructions to the truck and the truck can avoid the
traffic jam by driving an alternate route. The internet of things provides real-time
visibility, the ability to track everything from vehicles to cargo, to machinery and
enables the automatization of a lot of processes within transportation [ CITATION
Rit20 \l 1031 ] [ CITATION Sha20 \l 1031 ].

The internet of things offers huge possibilities for future transportation, therefore
there are a lot of advantages to it and only a few disadvantages.

An advantage of the internet of things is information access. There is easy access to

data and information that are sitting far from the location, in real-time. This is possible
because of the network of devices. A person can access any information sitting from
any part of the globe. Then the communication. Better communication is possible
over a network of interconnected devices, making it more transparent, which reduces
inefficiencies. Furthermore, there is again the advantage of cost-effectiveness. The
communication between electronic devices is made easier because of the internet of
things. It helps people in daily tasks. And transferring data packets over a connected
network saves time and money. The last advantage is the automation. Automating
tasks in a business help boost the quality of services and reduce the level of human
intervention. 

There are just a few disadvantages of the internet of things. The first one is privacy
and security. There is a risk of any leakage of data that might be important. The
second one is again the reduction of jobs. With every task being automated, the need
for human labor will reduce drastically. This will have a direct impact on employability.
And the third and last disadvantage is the dependability. There is no doubt that
technology is domaining the lifestyle, reflecting human dependability on technology.
In the case of a bug in the system, there are high chances of every related device
getting corrupted.

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4 Sustainability in Transportation

To start with, sustainability has been redefined throughout these years. It used to
mean long-term planning, setting an ecological footprint. Nowadays, the concept of
sustainability is specified through the division of three factors, ecological,
environmental, and social. Which means how can the current needs of these factors
be pleased and still be considerate towards the needs of future generations
[ CITATION Mit20 \l 1031 ] [ CITATION Cam201 \l 1031 ]?

Coming to this agreement many steps had to be taken to tackle issues such as social
equity or pollution. Although the process of fulfilling this mission is ongoing, progress
has already been made, the focus of this part will be held on transportation means. A
few examples worth mentioning would be the railway industry or the automobile
industry.

In the railway industry, there have been positive implementations that have resulted
in low CO2 emissions. The early 1870s are when the first steam locomotives,
consolidation, were introduced in daily lives. Although this transportation meaning
was prevalent and stayed established over a century, a new sustainable option had
to be found. Locomotives fuel used to be coal, but as years passed coal outdated as
a fuel because it was not renewable. Today’s locomotives are diesel-electric
designed. In spite of the fact that diesel-electric locomotives still pollute the
atmosphere, it is less than the coal emission, which is progress [ CITATION USB15 \l
1031 ] [ CITATION RSS19 \l 1031 ].

Coming to the automobile industry, a known brand that invested these past years in
various autopilot cars is Tesla. Tesla is the most popular electric vehicle producer in
the world. Their cars use electricity as fuel. To charge the batteries of the cars to
100% with a Tesla supercharging station, it takes about 75 mins. Through autopilot
functions like self-driving, self-parking, and self-braking the automotive industry has
been revolutionized. It works by collecting data on the surroundings and regulating
the speed and direction [ CITATION Hen11 \l 1031 ] [ CITATION Zac20 \l 1031 ].

However, despite the fact that substitutes to certain issues have already been found,
new challenges still occur, such as the excessive use of electricity, pollution or
hunger. Solutions to these problems would be to find alternative ways that are
ecological, environmental and socially friendly. To list a few, we will focus ourselves
on specific industries being electro-mobility and artificial intelligence.

As previously mentioned, the goal in the near future is to have 0% CO2 emissions,
due to global warming. The introduction of electric cars was a huge step forward in
sustainable everyday living because it proves that even private people have the
choice to set an ecological impact. Another aspect to support the 0% CO2 emission
goal, can be found in the rail industry. Its plan is the Hyperloop train. It is the idea of
11
train functioning through magnetic levitation. This blueprint will be implemented in the
coming years and aims to not only be environmentally friendly but also timesaving
[ CITATION Fra19 \l 1031 ] .

To sum it up, since the existence of human beings, there were times that humanity
was ignorant and only thinking about the current situation, especially during the early
days of globalization. A consequence of our previous reckless behavior is global
warming. However today most people feel concerned by the future and are investing
their resources in the research of innovations that are ecological, environmental and
socially friendly. The overall rising awareness of climate change is also influencing
how people in transportation think. New more ecological friendly transportation
modes are being developed and will be more popular in the future.

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5 Conclusion

The world is in constant change and so is transportation. Over the last year
transportation always improved and brought up innovations, to operate more cost-
efficient, time-efficient and more sustainable. In the coming year transportation will be
confronted with a lot of changes, this leads to a lot of opportunities, but also a lot of
risks. Newmarket entrants, new transportation models, transportation modes and
customer expectations will influence the way transportation will look like in the future.
Already existing companies need to adapt to these changes to stay competitive,
therefore a lot of companies are already investing in research and development. This
helps them to not lose track of new technology and prevent falling behind
competitors.

A lot of the future transportation modes and innovations bring great opportunities for
companies, for example, the usage of autonomous vehicles can be much more cost-
efficient, besides this, it also lowers the risks of accidents and damaged goods.
However, there are still a lot of open questions regarding legal issues and
regulations, that need to be clear before autonomous vehicles can be used as major
transportation.

 In the future transportation becomes more and more digital and automated, there is
a loss of jobs for lower-skilled workers, which means there are moral issues that
need to be considered as well. Because in cases of emergencies it is not clear, yet
how to deal with it.

Another important part is that due to the new technologies a lot of cameras will be
used for example with drones and also the sensors of autonomous vehicles, this
brings up moral questions regarding the privacy of people that are constantly being
recorded.

To sum up transportation in the future will be more automated and digital, which
brings a lot of advantages to it, but before these innovations can come into use legal
and moral issues need to be addressed and solved. Nothing can stop innovation,
there will always be a constant change in the world that cannot be stopped. 

13
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