The issue: How can Scotland develop a world-class multi-modal transport and logistics infrastructure?
Caroline Theobald, managing director of Bridge Club and the chair of many of BQ magazine’s live debates, welcomed guests to Dundas Castle and asked each participant to introduce themselves and explain why they were taking part in the event.
Colin Ferguson, chief executive at Livingston-based Route Monkey, which has developed software to optimise performance, including organisations such as Shell and Iceland, added his welcome. He explained how his company’s algorithms could help infrastructure to be
Mark Bonnor-Morris explained that he is responsible for Siemen’s electro-mobility business in the UK, which covers electric vehicle charging infrastructure and services. “Scotland has probably the most comprehensive vehicle-charging network in the UK,” he said. “For me, the question is how do you develop that further and increase the use of electric vehicles?”
Musselburgh-based Astrosat sources, analyses and deploys satellite data and its chief technology officer, Alan McLarney, said the company’s work included monitoring the resilience of infrastructure, such as how flooding and landslides affect countries like Malaysia and Vietnam and how their infrastructure could be adapted to cope with climate change. “We use Scotland as a Petri dish,” he said. “We’ve got everything here from islands to mountains to valleys to experiment with data.”
John Murray said Scottish Enterprise wanted to present an opportunity to the technology and engineering sector. “We’re not looking at this as a transport industry problem, we’re seeing it as an opportunity for technology and engineering companies to create innovative products to address the growing challenges caused by the shift away from operational, vehicle-centric models towards people and services,” he said.
“The big automotive companies have recognised this trend and the significance disruption it’s causing. In the past, their model involved 80% of revenues coming from the sale of vehicles and 20% from servicing those vehicles; now, their new model involves 80% of revenues coming from servicing and only 20% coming from the sale of vehicles, because of the shift towards customers demanding personalised, seamless vehicle services.”
Finlay MacRae, area operations manager at ferry operator Caledonian MacBrayne, said his company had won a contract to manage the Marchwood military port at Southampton. “We’re bidding for the next Scottish Government contract to run the ferries for the next eight years,” he said. “As part of that, we’re looking at developments and innovations that touch on what’s being discussed here tonight. There has been some resistance to innovation within our area due to geography and distance, but there’s a new world coming and so I’m keen to be involved in any discussions that we can help with.”
George Hazel, director of his eponymous Edinburgh-based consultancy firm, said: “Over the past 12 years, particularly with Siemens, I’ve been looking at global trends in terms of cities and mobility. I’ve never seen anything so exciting and so disruptive. I’m also working as a consultant with Scottish Enterprise.
There are two parallel universes going on at the moment: the first is the universe I’ve known and loved for 40 years, with a top-down strategic view of transport that’s operationally based, which we still need to have; but going in parallel to that is a whole new world of personalised services that the market wants, funded by smart technology linked to the cloud, which is promising to give people door-to-door service for all their mobility needs under one account. What’s disruptive is that’s being led by non-transport companies – energy companies, IT companies, retailers, car companies and mobile phone companies.”
Route Monkey projects and strategy director Kate Armitage comes from a background in electric vehicles with an energy company. “I understand the relationship between energy and transport and so I understand new models of thinking about travel from a low-carbon point-of-view,” she said. “My experience is in challenging perceptions about how people choose to travel, how people choose to move things around, and redefining travel and needs.”
Simon Tricker is chief digital officer at Urban Tide, an Edinburgh-based start-up formed from the team that won £24 million from the-then Technology Strategy Board (TSB), now Innovate UK, to use Glasgow as a future cities demonstration project. He said: “I’m interested in the idea of building ‘info-structure’. We’re very good at building infrastructure, but ‘info-structure’ involves uses sensors to capture data. The second part is then opening up that data. Commercially, there’s friction there, but with open data you can create great things.
Transport for London (TfL) is a great example. It opened up its data and along came City Mapper, which is a great app that allows you to navigate the streets of London in a much better way.”
Bill Ireland, managing director at Edinburgh-based Logan Energy, works with hydrogen fuel cells (HFCs), including a project looking at the feasibility and business case for converting a roll-on, roll-off (RORO) ferry from being an electric-diesel hybrid to being an HFC-electric hybrid. “Our role not only involves the use of hydrogen on board but also the infrastructure,” he said.
“You can’t just pop along the road in most locations in the UK and fill up with hydrogen. Scotland has the resources – through wind and tidal, particularly in remote communities – to use that renewable energy to generate hydrogen and then use that as a transport fuel.” He also pointed out that energy could be stored in HFCs in vehicles and then pumped into the national grid to help meet peaks in demand.
Stuart Garrett, managing director at Serco Northlink Ferries, which serves Orkney and Shetland, asked whether Scotland could become an “enabling environment” from a planning perspective to stimulate economic development. He pointed to the lengthy delays in building the Aberdeen western peripheral route.
Keith Stark, Scotland manager for City Car Club, which operates short-term self-service car hire in Edinburgh and Glasgow, said his company wanted to offer people an alternative to car ownership. “We’re treating cars more as a commodity to break that link between car usage and car ownership,” he said.
“If you want to use a car then you don’t have to own a car. We were bought by Enterprise Rent-a-Car in April. We have 20 electric cars in Scotland and we also use low-emission vehicles.”
Urban Foresight managing director David Beeton explained that his Newcastle-based consultancy was focused on future cities. “We work globally with intergovernmental groups under the framework of the International Energy Agency, which gives us access to other people’s good ideas,” he said. He highlighted work his firm is doing in Dundee and Orkney.
Theobald suggested guests could use the Traveller Needs & UK Capability Study, a report produced by the Transport Systems Catapult, as a canvas for the debate.
Andrew Everett, chief strategy officer at the Transport Systems Catapult, said: “The catapult is here to create an environment that allows businesses to come up with new ideas and test things out.
Alan mentioned using Scotland as a Petri dish and David spoke about ‘living laboratories’. There is an opportunity for Scotland to use itself as a testbed. It’s important that we do a lot of really quick testing, learning from that testing, stopping that testing if it’s not working, and failing a lot, because we learn through failure.
We’ve done a lot of things that are long-term demonstrators and trials, but I think we need to change the pace when it comes to mobility and get some really short things going and throw them out there and see what happens.
“For Traveller Needs, we put the traveller at the heart of the conversation. We interviewed 10,000 people throughout the UK to understand how they travelled and what their ‘pain points’ were. From that, you can identify where the ‘value opportunities’ are for people to come up with things that will make their journey easier. Nearly 80% of people have a smartphone and about two-thirds of those users said they would be happy to give up their personal data if that made their transport better. Nearly 40% said they would use driverless cars.
“The link to logistics is through an army phrase – people are just ‘self-loading freight’. I live in a little village in Kent and there’s a little commuter bus that goes from our village to the local train station three times in the morning. It works if you’re catching one of those particular trains, but it’s a bugger if you’re not. It’s a 40-seater bus and only five people get on it. That’s bonkers. The bus is sized for the peak use.”
Everett added: “If there was an opportunity where you could have either a freight solution or a personal-mobility solution that’s exactly fit for purpose, consistently available at the time you want it, clean, and at a price you want to pay then wouldn’t that be great? Why would we do anything else? Why would we own a car that sits on our drive for 90% of the time losing money?
“Freight is moved around the place all the time. How many empty lorries are there in the country? It should be fewer and it could quite easily be fewer if everybody worked together.”
Garrett highlighted the situation in Caithness, where he said there had been no effort to use the railhead that serves the former Dounreay nuclear reprocessing plant to take freight off the roads. Instead, a massive infrastructure investment would be made on the A9 road at Berriedale Braes.
“That’s a classic example of existing infrastructure not being used because there’s no joined-up thinking,” he said. “It could also tie-up with the opportunities to harness the world-class renewable energy resources in the Pentland Firth.”
Everett pointed out that often the people who have to make the big investment in infrastructure don’t get the return on their investment. “The business proposition is all messed up,” he said. “So we need to unpick that – how do we get the business value back to the people who are putting the investment in.”
Ferguson added: “There are a lot of quick-wins that we overlook. Around 60% of freight vehicles run empty – they make a delivery and then go back and make a collection. They do that because each individual company wants to maximise its revenues – it’s better for them to send their lorries to do their own collection and delivery and earn them money rather than get them to take a load from a subcontractor, which pays them a lot less.
“Load-matching as a concept is already out there. The bigger concept for me is freight share. For example, we can optimise operations at a micro level for our clients by zooming out to the macro level, in which we look at different vehicles across different depots. You can get a big efficiency, sometimes around 20%. If you were to zoom out again to a country level and say that company A should be dealing with company B then you could get similar efficiencies. You could save a country millions if not billions of pounds in costs and infrastructure spending and lower carbon dioxide emissions too.”
“That then opens up the question around data,” Tricker interjected. “That’s the big challenge – moving from an individual organisation owning data to data that is collectively owned. That’s the bigger shift that needs to happen.”
If 80% of commuters are prepared to share their personal data if it meant their mobility would improve then would 80% of companies be prepared to share their data to improve freight? Theobold asked.
“Freight share is different to load matching,” Ferguson replied. “In freight share, companies opt-in to share their freight and tell other people what they’re prepared to do. Then you can put that information into a shared data source, which other people can also contribute to. It’s more about utilising space on vehicles. The end result is you minimise the amount of travel and maximise utilisation, which in turn maximises profits for those people involved. If people don’t want to do it then they simply don’t opt in.”
“When you want to test something out it’s important to find the people within an organisation who have the ability to say ‘I’m going to give it a go’,” explained Everett.
“At the TSB, we had a great project where we had Jaguar-Landrover, Nissan and Lotus working together with small companies to develop electric motors. That wouldn’t have happened if we hadn’t had the three people in the big companies who had understood what we were trying to do and were willing to give it a go.”
“Another aspect to this is that the model is changing,” added Hazel. “For example, Xerox runs the public transit system in Montreal. There are 12-15 operators, but the customer knows nothing about the partnerships Xerox has with the operators; all the customer knows is that there’s one ticket system. The commercial advantage has been worked out between the mobility service provider and the operators – there’s an advantage to the operators being in there, otherwise they’ll lose out to their competitors.”
Everett agreed: “We need to use that example to go to companies that won’t share their data.”
“It comes down to how they award those contracts to operators,” added Bonnor-Morris. “Many contracts are awarded for the short-term, which does not motivate operators to have a long-term view.”
McLarney said: “As a company, we’ve had to deal with larger companies that control satellites and they want to use their data to create all of the possible products and services themselves. So we’ve created business models involving profit share and other formats to convince the big companies that they will benefit.”
Hazel pointed out: “There’s a double-whammy that’s going to make this all happen: the first is competitive advantage; and the second is the new companies that are coming through, which are a threat to local bus companies.
The first guy to see this in Scotland is Sir Brian Souter. If you look at his speech this year to the Association of Local Bus Companies (ALBUM) conference he delivered a real warning to the bus companies that the last place you guys want to be is a service provider at the end of the value chain because Uber’s fare is now getting perilously close to a bus fare.
All sorts of models are coming along – like car clubs and community car share – to solve your problem and having a double-decker trundling round a housing estate isn’t the solution.”
Stark explained that bus companies saw City Car Club and similar schemes as rivals. “We’ve been trying to talk to Lothian Buses for years about using their Ridacard to access our cars, but they’re so protective,” he explained.
“In Glasgow, with Strathclyde Passenger Transport (SPT), its card isn’t compatible with our cars, so there’s a different problem there. There’s a big problem because all the organisations don’t have a common goal of joining up that last mile of the journey.”
Armitage pointed out that the open data available from TfL was static rather than dynamic. “TfL knows where people swipe in and swipe out, but they don’t know where they start their journey or where they end their journey,” she said.
“They don’t know if it’s a 300-mile journey or if there’s a ten-metre walk at the end of it. So I would question the quality of data and – having worked on the Nectar loyalty card programme in a previous life – I think the opportunity for Scotland is to ask people to give more information about their lives so we can build up a picture of what that end-to-end journey is.”
Ferguson agreed: “I don’t see the issue being the availability of the data or the data itself. It’s there. It’s about willingness to share, and private organisations won’t share if there’s no commercial advantage for them.”
Theobald pointed out that, for people in rural areas, it wasn’t just a question of “Why should I share my data?” but also “How can I share my data?” if they don’t have internet access.
Ferguson explained that he had recently moved to the North-West Highlands. “I live on one side of a big hill and there are lots of different delivery companies coming over from the other side of that big hill to make online deliveries to our village,” he said. “Now, if there was a little consolidation centre where the delivery drivers could drop off their parcels and then an electric bus or HFC vehicle to bring those parcels over the hill together then it would cut down on the number of journeys. People in the village would be willing to share their data to make that happen.”
Everett added: “The population is growing, but the volume of freight is growing at a much faster rate due to the growth of internet sales. That’s a massive challenge for the transport system, which is separate from the individual’s use of the transport system. We need to look at it holistically. We get hung up on ‘personal transport’ verses ‘freight’ when actually it all goes on the same stuff.”
Hazel agreed: “One of things that Scotland could contribute to this area is solving the business model and the governance model because people are coming at this from totally different ways. We’ve visited the Mobile World Conference in Barcelona and heard from the chief executives of all the major mobile phone companies. Every one of them describes themselves as a ‘lifestyle service provider’ – the word ‘phone’ hasn’t been used for the past two years. They want to use the phone and the cloud to provide all of their customers’ lifestyle services. They’re interested in mobility but only because they need it to provide those lifestyle services.
“That’s a totally different way of coming at it from the traditional transport way. So companies don’t know how to join in. The public sector is stuck with the old legacy model so it doesn’t know how to join in. Uber is coming to Scotland and it’s looking at having 24/7 utility of its drivers. If they’re not taking passengers then why not take a parcel? Suddenly passenger transport has crossed with logistics and there’s another disruption.”
“It’s very interesting that we’re talking about mobility around cars and vehicles to carry us around and we’re forgetting that we can cycle or walk especially for that final mile,” mused Tricker. “Our infrastructure across Scotland is woefully inadequate for that.”
“Perhaps it’s about nudging behaviour,” responded Everett. “The concept of ‘mobility as a service’ is that you pay X amount of money and you get Y miles of car use, Z miles of train use and however many flights per month. Then you could offset that by giving bonus points for walking or cycling. You can drive different behaviours by profiling individuals and personalising it. If you walk ten miles this week then you can get £5 off your oranges at Tesco.”
“The cycle infrastructure in Glasgow is disjointed because the routes were planned based on a wee man standing there with a counter waiting for cyclists to go past,” Tricker explained. “So we developed an app that cyclists can use to map their journeys and then anonymise the data. Over a number of years, we will build up a picture of which routes are really being used.”
Armitage said: “A lot of effort goes into deriving where the start of the journey was. Why not just ask customers? They’ve all got smartphones.”
Ireland pointed out that, when users sign up for an account to run their Android phones, they have to opt-in to share data about their location and so Google already has all this information. “We’ve already given that up,” he said.
Armitage said: “Perhaps we’re scared to use that information.”
Ferguson added: “Or perhaps there’s nothing in it for the user to make them switch that location option on.”
Armitage said: “I think it’s also to do with business culture – businesses are more comfortable creating computer models and deriving data rather than getting into individuals.”
“The Travellers’ Needs actually went through that business value opportunity and so there are masses of data that our catapult holds,” Everett explained. “So come and have a play with our data. People have told us what frustrates them about their journeys and what they’d be willing to pay to overcome that challenge.”
“One of the answers to the question about how Scotland can develop a world-class multi-modal transport and logistics infrastructure system has to be ‘Don’t travel’,” Ferguson stated. “By not travelling, you’re reducing carbon dioxide emissions. Knowing when not to travel rather than travelling for the sake of it is part of having a world-class multi-modal transport system.
“It’s a brave fleet manager who tells one of his van drivers not to go out on the road but instead to stay in the depot and wash their van. But if you zoom out and look at it holistically then that might be the most efficient thing to do and might make the company more money. Nobody takes those decisions because they’re starting from the wrong point; they just assume that they need to keep everyone on the road.”
“I totally agree with Colin’s comment about not travelling,” said Beeton. “And as a cyclist I also agree with Simon’s point about the need for better cycling infrastructure. Yet the overwhelming majority of journeys that are made today are made in cars and so if we’re serious about tackling climate change then we need to improve those journeys.
“The other point is that we seem to be forgetting about those people who most need mobility. The solutions we’ve talked about today are the solutions that people sitting round this table would use – white people in ties. Mobility isn’t just about getting a taxi as quickly as possible to take you home from the wine bar or getting your internet shopping to you as quickly as possible. It’s about all members of society.
It’s about connecting people to health services, it’s about connecting them to employment, it’s about moving them around cities safely. There are real challenges we face in helping people who don’t have smartphones and who live outside the banking system. How do you engage with those people and give them opportunities?”
“It’s just a different business case,” Armitage offered. “It’s built around the savings that could be made around delivering healthcare, benefits and welfare payments.”
Hazel added: “It comes back to the business model and the governance model. Could this be a public-private partnership? If a company has won a 20-year contract to provide the mobility services for Perth then there will be a range of value-added services that it can offer to customers but one of the conditions of that franchise will be that it has to provide free transport to the unemployed. Is that a model that will hit both targets?”
MacRae pointed out: “The supply chain has got to the stage where if there are two or three days of disruption then commodities are running out at the extremities. That’s important when we’re talking about logistics. That’s where Scotland still has some issues to work through, whereas our neighbours in Scandinavia or maritime America or Canada have already found solutions.”
Bringing the debate to its conclusion, Ferguson said: “If this was a board meeting and we’d discussed all of these ideas then there’s one acronym that we’d have to end with – JDI or ‘Just do it’.
If Scotland was our business and we were responsible for making it successful then we wouldn’t just talk about it but we’d get on and do it. That’s what we need; we need Scotland’s leaders to get on and do it rather than just have people sitting around talking about it.”
Optimising transport and logistics infrastructure
Route Monkey Ltd brought together relevant stakeholders from Scotland’s energy, mobility and transport industries, as well as NGOs working in these sectors for this BQ Live Debate.
The issue before them was how technology available today could help create an optimised transport and logistics infrastructure, serving everyone from individual travellers and commuters through to multinational freight companies. The convergence of smart phone technology, Big Data and the Internet of Things is creating exciting new opportunities to optimise “mobility” – the movement of people and goods. Connectivity can enable us to revolutionise transport, from apps providing personal mobility on demand for individual travellers, through to freight sharing platforms that will ensure trucks and vans never run empty again.
Investment and collaborative working to build these systems could deliver enormous economic, societal and environmental benefits to Scotland, providing a blueprint for other nations, cities and regions to follow.