Preparing for the Mobility Revolution

Rail: A Key Component of the Mobility Mix
April 2019

In 1863, when people were getting around primarily with horse-pulled carriages, London introduced the first ever underground transportation system. This first metro, nicknamed the  Tube, and its wooden cars were powered by coal-fired locomotives, replicating a solution already used above ground. Since then, rail transportation has become a significant component of the modal mix, at least in certain regions.

 

Today the London Tube carries about 5M passengers on weekdays with its 270 stations. By comparison, Tokyo’s metro system, the world’s busiest, moves close to 10M passengers per day (290 stations). New York City’s subway reaches 5M (472 stations), but Los Angeles only achieves 350k (104 stations). In Paris, the busiest line, RER Line A which runs across the Paris region over 109 km, carries about 1.2M passengers on weekdays, thanks to its double decker cars. 

 

The bigger picture of the overall modal mix shows great differences between regions. Whereas private cars represent over 80% of all journeys in most large US cities, the share is only 12% in Tokyo, 20% in Paris or Shanghai. Conversely, the public transport share (i.e., metros, tramways and buses) represents less than 5% in most last US cities vs. 50-60% in Tokyo, Mumbai or Paris.

 

A Broad Range of Competitive Rail Transportation Solutions

Rail transportation systems address various needs in terms of capacity, distance and speed. Urban areas across the globe rely on tramways (above ground) and metros. These solutions offer a capacity of 5k-20k passengers per hour per direction (pphpd) for the former and up to 50k pphpd for the latter, with a typical design density of 6 passengers per square meter (pax/m2). The footprint required is limited to a single pair of tracks. In the case of metros, they are hidden underground, thus reducing congestion on surface roads. In order to reach a similar capacity with cars, you would need a continuous line of cars driving at 30 km/h, bumper-to-bumper, with 8 passengers in every single car, yes 8! There is just no comparison.

Regional trains address regional and intercity traffic with distance up to 200-300 km at speed of up to 200 km/h. Very high speed (VHS) trains follow which operate up to 350 km/h. They have been historically deployed widely in Japan and France, and massively in China over the past 15-20 years. Ideal for distance above 300 km, they are particularly competitive vs. air travel for 300-500 km. For example, the 319 km Paris-Brussels journey takes 1h30, downtown to downtown. Paris-London takes 2h15 for 469 km. In addition, travelers have immediate access to all mobility modes at both ends of their journey. 

 

Beside the time savings and extra convenience, CO2 emissions per passenger is massively lower for a VHS train journey, at about a 1/10th of what it is flying. In addition, long distance rail provides comfort (certainly not the case on a packed metro) and convenience on board with wifi and food service. Stations have also been completely revamped in recent years to become much more welcoming with shops and cafés — they now contribute to the profitability of the overall rail system. As a result, airlines have largely pulled out of the markets were VHS lines were established, for lack of competitiveness. This is the case for instance for Paris to London, Brussels or Lyon, or Seoul to Busan.

2. TGV ICE in Paris.jpeg

Differentiated Rail Deployment Between Regions

Rail does not play the same role in all countries. Europe and Japan have long had dense and well performing rail systems. They continue to generate a high share of the mobility mix, whether in urban environment or for intercity travel. China started to invest in its rail infrastructure around 2000. Huge investments were made in the 2000s and 2010s, both for metros and very high speed rail, by and large leveraging European technologies. By the way, this led to the growth of China’s CRRC, the world’s largest rolling stock OEMs, which reached about $30B in sales. This in turn pushed European competitors Siemens and Alstom, the #2 and #3, to merge.

 

The USA lags behind in rail transportation, which can be explained in part by longer distances between cities than in Europe or Japan. Also, rail is just not part of the culture. A very little portion of the network is electrified, which results in train and locomotives running on diesel rather than electricity as is the case in most other developed countries. Living in Silicon Valley, I am still shocked every time I hear Caltrain’s diesel train running up and down the Bay. What a technological and an environmental clash!

Whereas rail continues to grow where it is well established, it has difficulties gaining traction in the USA. The San Francisco-Sacramento-Los Angeles VHS project initiated around 2005 is/was supposed to offer passenger service at 350 km/h, connecting SF with LA (840 km) in 2h40 — I had a chance to work on this project while working at Alstom. In 2008, Californian tax payers voted a $9B bond for this (then) $35B project supposed to go into operation around 2020. Estimates are now $70B and about 2035 … it is unclear what will happen with the project. However, rail may start to gain a stronger foothold in the USA under private initiatives. Virgin Trains starting operating in 2018 between Miami and Fort Lauderdale, with privately owed tracks, trains and stations. The company intends to develop in other markets. All the best!

Operators and Equipment / Service Providers Invest in New Tech

The four mobility megatrends can easily apply in the rail space. Trains in all segments operate largely with electricity, with the main exception being the USA where the network is only marginally electrified (it is owned primarily by private freight rail operators). Driverless metros have been in operation for over 20 years, and OEMs and operators are preparing for more deployment (see below). Trains are connected to ground operations (V2I) and to each other (V2V) for essential safety reasons. Lastly, rail transportation is the essence of shared mobility.

Innovation is both passenger and operations-focused. For the benefit of passengers, OEMs (e.g., Siemens, Alstom, Bombardier or CRRC) and operators (e.g., Germany’s Deutsche Bahn, France’s SNCF, the Japan Rail companies or China’s Ministry of Transport) are investing on multiple fronts -- see Shinkansen Gran Class above. They relate to passenger connectivity, on-board services, ticketing, intermodal integration, etc. Furthermore, new solutions will likely be carried across from automotive to rail for long journeys. This could include replicating one’s digital space on individual screens (e.g., Apple CarPlay), characterizing passengers (age, sex, emotions, body position,…) to adapt the ride experience and video content, and more.

 

Innovation focused on operations addresses safety and security, power supply (ground-based power supply and battery charging systems), super capacitors, regenerative braking with vehicle-to-grid energy transfer, fuel cell power generation, asset monitoring and predictive maintenance, operational performance, or driverless system. This latter point is the object of massive investment in the automotive space, where complexity is significantly higher than in rail. Nevertheless, driverless metros have been in operation for about 20 years, starting in Paris and Singapore. Alstom and Siemens are experimenting with driverless tramways. Operators Deutsche Bahn and SCNF announced driverless trains by 2021 (freight) and 2023 (passenger) respectively. In the case of VHS trains, SNCF expects to increase profitability with line capacity jumping from 13 to 16 trains per hour.

 

Alternatives to Very High Speed Rail

This review would be incomplete without mentioning hyperloop. The idea was first proposed by Elon Musk in a paper issued in 2013 as an alternative to air travel. The open source concept calls for passenger or freight pods to travel at speed of up to 1000 km/h in a very low pressure tube (quasi-vacuum), using magnetic levitation. In 2015, the conceptual paper turned into a competition which brought to life several companies from around the world, including Hyperloop One, Hyperloop Transportation Technologies, Arrivo, Zeleros or Transpod.

Hyperloop One projects San Francisco-Los Angeles in 43 min vs. over 6 hrs by car (600 km) and Paris-Lyon in 32 min vs. 2 hrs by train (450 km). The startup has already tested the concept (see above) at close to 400 km/h in a 500 m tube; others have done similar tests. These companies have raised hundreds of millions of dollars and are working on projects on most continents. A few incumbent rail operators, such as Deutsche Bahn, are partnering with hyperloop startups to evaluate the concept and be part of the disruption. 

 

It should be noted that the magnetic levitation (maglev) technology is currently used in a 430 km/h rail link between Shanghai airport and the city, as well as in a couple short lines in Japan and Korea. There are very few commercial applications of maglev given the technologies high cost / benefit ratio vs. conventional VHS solutions.

 

 

Rail is Integral to Intermodal Mobility

Various modes address different needs from planes, for very long distance and intercontinental journeys, all to the way to electric scooters for the last kilometer and obviously walking. Rail provides high capacity, low emissions solutions for journeys ranging from 1 to 1000 km. In the end, these various modes must be integrated into seamless end to end journeys. The most recent mode, e-scooters, is well connected to public transportation: 30% of Spin’s scooter trips originate or end at a station. It is also interesting to note that French OEMs Alstom invested in EasyMile, a developer and operator of automated shuttles. The company is also developing a range of electric buses in order to broaden its modal offering.

 

However, we are missing the glue between modes to remove intermodal friction. Google Maps and other offer map services offer rail options, but they don’t provide a seamless experience across modes, i.e., the ability to generate a complete journey combining several modes. ActiveScaler, a Silicon Valley startup, tries to address this issue, allowing users to book, pay and obtain tickets across multiples modes, traveling from your home on one continent to your client’s office on another. They are testing the platform in a few cities.

In Conclusion

Rail transportation checks all the boxes of the four mobility megatrends: electric, autonomous, shared and connected. They are also largely complementary to the other modes, i.e., scooters, bikes, moped, personal car, buses or airplanes. They typically provide much higher capacity per footprint than other modes and are significantly cleaner than cars (except EVs) or planes. Given the need to increase transportation efficiency for passengers and freight (congestion, use of travel time, cost) and reduce environmental impact, countries, regions/states and cities must embrace rail solutions to optimize their modal mix. Yes, rail requires expensive infrastructure, but we need to commit to long term investments and accept payback over decades. Roads are taken for granted, though they are the result from investment made by previous generations. Rail is an integral part of the solution for the future.

Rail: A Key Component of the Mobility Mix
April 2019

In 1863, when people were getting around primarily with horse-pulled carriages, London introduced the first ever underground transportation system. This first metro, nicknamed the  Tube, and its wooden cars were powered by coal-fired locomotives, replicating a solution already used above ground. Since then, rail transportation has become a significant component of the modal mix, at least in certain regions.

 

Today the London Tube carries about 5M passengers on weekdays with its 270 stations. By comparison, Tokyo’s metro system, the world’s busiest, moves close to 10M passengers per day (290 stations). New York City’s subway reaches 5M (472 stations), but Los Angeles only achieves 350k (104 stations). In Paris, the busiest line, RER Line A which runs across the Paris region over 109 km, carries about 1.2M passengers on weekdays, thanks to its double decker cars. 

 

The bigger picture of the overall modal mix shows great differences between regions. Whereas private cars represent over 80% of all journeys in most large US cities, the share is only 12% in Tokyo, 20% in Paris or Shanghai. Conversely, the public transport share (i.e., metros, tramways and buses) represents less than 5% in most last US cities vs. 50-60% in Tokyo, Mumbai or Paris.

 

A Broad Range of Competitive Rail Transportation Solutions

Rail transportation systems address various needs in terms of capacity, distance and speed. Urban areas across the globe rely on tramways (above ground) and metros. These solutions offer a capacity of 5k-20k passengers per hour per direction (pphpd) for the former and up to 50k pphpd for the latter, with a typical design density of 6 passengers per square meter (pax/m2). The footprint required is limited to a single pair of tracks. In the case of metros, they are hidden underground, thus reducing congestion on surface roads. In order to reach a similar capacity with cars, you would need a continuous line of cars driving at 30 km/h, bumper-to-bumper, with 8 passengers in every single car, yes 8! There is just no comparison.

Regional trains address regional and intercity traffic with distance up to 200-300 km at speed of up to 200 km/h. Very high speed (VHS) trains follow which operate up to 350 km/h. They have been historically deployed widely in Japan and France, and massively in China over the past 15-20 years. Ideal for distance above 300 km, they are particularly competitive vs. air travel for 300-500 km. For example, the 319 km Paris-Brussels journey takes 1h30, downtown to downtown. Paris-London takes 2h15 for 469 km. In addition, travelers have immediate access to all mobility modes at both ends of their journey. 

 

Beside the time savings and extra convenience, CO2 emissions per passenger is massively lower for a VHS train journey, at about a 1/10th of what it is flying. In addition, long distance rail provides comfort (certainly not the case on a packed metro) and convenience on board with wifi and food service. Stations have also been completely revamped in recent years to become much more welcoming with shops and cafés — they now contribute to the profitability of the overall rail system. As a result, airlines have largely pulled out of the markets were VHS lines were established, for lack of competitiveness. This is the case for instance for Paris to London, Brussels or Lyon, or Seoul to Busan.

2. TGV ICE in Paris.jpeg

Differentiated Rail Deployment Between Regions

Rail does not play the same role in all countries. Europe and Japan have long had dense and well performing rail systems. They continue to generate a high share of the mobility mix, whether in urban environment or for intercity travel. China started to invest in its rail infrastructure around 2000. Huge investments were made in the 2000s and 2010s, both for metros and very high speed rail, by and large leveraging European technologies. By the way, this led to the growth of China’s CRRC, the world’s largest rolling stock OEMs, which reached about $30B in sales. This in turn pushed European competitors Siemens and Alstom, the #2 and #3, to merge.

 

The USA lags behind in rail transportation, which can be explained in part by longer distances between cities than in Europe or Japan. Also, rail is just not part of the culture. A very little portion of the network is electrified, which results in train and locomotives running on diesel rather than electricity as is the case in most other developed countries. Living in Silicon Valley, I am still shocked every time I hear Caltrain’s diesel train running up and down the Bay. What a technological and an environmental clash!

Whereas rail continues to grow where it is well established, it has difficulties gaining traction in the USA. The San Francisco-Sacramento-Los Angeles VHS project initiated around 2005 is/was supposed to offer passenger service at 350 km/h, connecting SF with LA (840 km) in 2h40 — I had a chance to work on this project while working at Alstom. In 2008, Californian tax payers voted a $9B bond for this (then) $35B project supposed to go into operation around 2020. Estimates are now $70B and about 2035 … it is unclear what will happen with the project. However, rail may start to gain a stronger foothold in the USA under private initiatives. Virgin Trains starting operating in 2018 between Miami and Fort Lauderdale, with privately owed tracks, trains and stations. The company intends to develop in other markets. All the best!

Operators and Equipment / Service Providers Invest in New Tech

The four mobility megatrends can easily apply in the rail space. Trains in all segments operate largely with electricity, with the main exception being the USA where the network is only marginally electrified (it is owned primarily by private freight rail operators). Driverless metros have been in operation for over 20 years, and OEMs and operators are preparing for more deployment (see below). Trains are connected to ground operations (V2I) and to each other (V2V) for essential safety reasons. Lastly, rail transportation is the essence of shared mobility.

Innovation is both passenger and operations-focused. For the benefit of passengers, OEMs (e.g., Siemens, Alstom, Bombardier or CRRC) and operators (e.g., Germany’s Deutsche Bahn, France’s SNCF, the Japan Rail companies or China’s Ministry of Transport) are investing on multiple fronts -- see Shinkansen Gran Class above. They relate to passenger connectivity, on-board services, ticketing, intermodal integration, etc. Furthermore, new solutions will likely be carried across from automotive to rail for long journeys. This could include replicating one’s digital space on individual screens (e.g., Apple CarPlay), characterizing passengers (age, sex, emotions, body position,…) to adapt the ride experience and video content, and more.

 

Innovation focused on operations addresses safety and security, power supply (ground-based power supply and battery charging systems), super capacitors, regenerative braking with vehicle-to-grid energy transfer, fuel cell power generation, asset monitoring and predictive maintenance, operational performance, or driverless system. This latter point is the object of massive investment in the automotive space, where complexity is significantly higher than in rail. Nevertheless, driverless metros have been in operation for about 20 years, starting in Paris and Singapore. Alstom and Siemens are experimenting with driverless tramways. Operators Deutsche Bahn and SCNF announced driverless trains by 2021 (freight) and 2023 (passenger) respectively. In the case of VHS trains, SNCF expects to increase profitability with line capacity jumping from 13 to 16 trains per hour.

 

Alternatives to Very High Speed Rail

This review would be incomplete without mentioning hyperloop. The idea was first proposed by Elon Musk in a paper issued in 2013 as an alternative to air travel. The open source concept calls for passenger or freight pods to travel at speed of up to 1000 km/h in a very low pressure tube (quasi-vacuum), using magnetic levitation. In 2015, the conceptual paper turned into a competition which brought to life several companies from around the world, including Hyperloop One, Hyperloop Transportation Technologies, Arrivo, Zeleros or Transpod.

Hyperloop One projects San Francisco-Los Angeles in 43 min vs. over 6 hrs by car (600 km) and Paris-Lyon in 32 min vs. 2 hrs by train (450 km). The startup has already tested the concept (see above) at close to 400 km/h in a 500 m tube; others have done similar tests. These companies have raised hundreds of millions of dollars and are working on projects on most continents. A few incumbent rail operators, such as Deutsche Bahn, are partnering with hyperloop startups to evaluate the concept and be part of the disruption. 

 

It should be noted that the magnetic levitation (maglev) technology is currently used in a 430 km/h rail link between Shanghai airport and the city, as well as in a couple short lines in Japan and Korea. There are very few commercial applications of maglev given the technologies high cost / benefit ratio vs. conventional VHS solutions.

 

 

Rail is Integral to Intermodal Mobility

Various modes address different needs from planes, for very long distance and intercontinental journeys, all to the way to electric scooters for the last kilometer and obviously walking. Rail provides high capacity, low emissions solutions for journeys ranging from 1 to 1000 km. In the end, these various modes must be integrated into seamless end to end journeys. The most recent mode, e-scooters, is well connected to public transportation: 30% of Spin’s scooter trips originate or end at a station. It is also interesting to note that French OEMs Alstom invested in EasyMile, a developer and operator of automated shuttles. The company is also developing a range of electric buses in order to broaden its modal offering.

 

However, we are missing the glue between modes to remove intermodal friction. Google Maps and other offer map services offer rail options, but they don’t provide a seamless experience across modes, i.e., the ability to generate a complete journey combining several modes. ActiveScaler, a Silicon Valley startup, tries to address this issue, allowing users to book, pay and obtain tickets across multiples modes, traveling from your home on one continent to your client’s office on another. They are testing the platform in a few cities.

In Conclusion

Rail transportation checks all the boxes of the four mobility megatrends: electric, autonomous, shared and connected. They are also largely complementary to the other modes, i.e., scooters, bikes, moped, personal car, buses or airplanes. They typically provide much higher capacity per footprint than other modes and are significantly cleaner than cars (except EVs) or planes. Given the need to increase transportation efficiency for passengers and freight (congestion, use of travel time, cost) and reduce environmental impact, countries, regions/states and cities must embrace rail solutions to optimize their modal mix. Yes, rail requires expensive infrastructure, but we need to commit to long term investments and accept payback over decades. Roads are taken for granted, though they are the result from investment made by previous generations. Rail is an integral part of the solution for the future.

Marc Amblard

Managing Director, Orsay Consulting

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© 2019 by Orsay Consulting