China

The world is going digital—time for the rail industry to jump on board

Over the last five decades, Rail transport has faced major headwinds. The transformation of global supply chains has made the logistics business more challenging than ever, with increasing pressure to deliver fast and flexible services at a lower cost. In that quickly-evolving context, freight rail is grappling with fierce competition from road transport—a trend that will only intensify under the effect of disruptive technologies like autonomous trucks and on-demand mobility services. In addition, railways around the world have been hit by significant government budget cuts, limiting their ability to invest in infrastructure or maintain high service standards. Stiff competition from roads, which have the door-to-door delivery advantage have offered added pain.

At the same time, railways are in the midst of a profound transformation, driven by emerging digital technologies like 5G, big data, the Internet of Things, automation, artificial intelligence, and blockchain. On a recent study tour in China, I had the chance to learn more about these developments, and to reflect on how digitization may help the rail industry reinvent itself.

As one of the key foundations for manufacturing, trade and growth, logistics is a strategic component of every economy. The sector can also contribute significantly to job creation. For example, in the UK, logistics is a $120billion industry that employs about 8% of the workforce. In India, it is a $160billion industry accounting for 22 million jobs, with employment growing 8% annually.

In 2016 and 2018, the World Bank’s Logistics Performance Index found that many developing countries face a significant skills gap in the logistics sector, especially at the managerial level. Similarly, several studies conducted in emerging economies such as China, India, and South Africa report shortages of supply chain talent.

In that context, emerging economies must tackle two critical challenges in order to develop a competitive logistics sector:

How can governments plug the skills gap in logistics?

How can the sector cope with the rapid changes brought about by technology, such as warehouse automation “freight uberization” or online platforms matching demand and supply, and their impact on the labor market?

Let’s look at three countries that consistently rank high in various global logistics rankings—Germany, the Netherlands, and Singapore—to see how they manage these challenges.

Dockless bikes typically sport bright colors that make them easy to identify.
Photo: Montgomery County/Flickr

How can we harness the digital economy to make mobility more sustainable? This question was the main focus of this year’s Transforming Transportation conference, which brought together some of most creative and innovative thinkers in the world of mobility. One of them was Davis Wang, CEO of Mobike, a Chinese startup that pioneered the development of dockless bike-sharing and is now present in more than 200 cities across 12 countries. In his remarks, Wang raised a number of interesting points and inspired me to continue the conversation on the future of dockless bike-share systems and their potential as a new form of urban transport.

What exactly is dockless bike-sharing (DBS)?

Introduced in Beijing just under two years ago, dockless bike-share has been spreading rapidly across the world, with Mobike and three other companies entering the Washington, D.C. market in September 2017.

As their name indicates, the main feature that distinguishes “dockless” or “free-floating” systems from traditional bike-share is that riders can pick up and drop off the bicycles anywhere on the street rather than at a fixed station.

This is made possible by a small connected device fitted on each bike that allows users to locate and unlock the nearest bike with their smartphone in a matter of seconds—yet another new derivative of the “internet of things” revolution!

Will technology be the savior of urban mobility?

Urbanization and rising incomes have been driving rapid motorization across Asia, Africa, and Latin America. While cities are currently home to 50% of the global population, that proportion is expected to increase to 70% by 2050. At the same time, business-as-usual trends suggest we could see an additional 1 billon cars by 2050, most of which will have to squeeze into the already crowded streets of Indian, Chinese, and African cities.

If no action is taken, these cars threaten literally to choke tomorrow’s cities, bringing with them a host of negative consequences that would seriously undermine the overall benefits of urbanization: lowered productivity from constant congestion; local pollution and rising carbon emissions; road traffic deaths and injuries; rising inequity and social division.

However, after a century of relatively small incremental progress, disruptive changes in the world of automotive technology could have fundamental implications for sustainability.

What are these megatrends, and how can they reshape the future of urban mobility?

To learn more about the future of sustainable mobility, don't miss Transforming Transportation 2017 on January 12-13. Click here to watch the event live and submit your questions to our experts.

Transport currently accounts for 23% of energy-related carbon emissions--equivalent to 7.3 gigatons of CO2 globally in 2013—and, unfortunately, ranks among the fastest growing sources of such emissions.

If we’re serious about bucking the trend and reducing the environmental footprint of the sector, we first need to understand where transport emissions come from, and how they will evolve. If you take out the 1 GT of CO2 emissions released by the aviation and maritime industry for international transport, about 6 GT of transport emissions are classified as “domestically generated.” Today, the share of domestically generated emissions is split pretty much evenly between developed and developing countries: high-income OECD countries account for about 3 GT, while non-OECD countries are responsible for another 3 GT.

However, under a business-as-usual scenario, this breakdown is expected to change dramatically. Without bold action to make transport greener, emissions from emerging markets are poised to grow threefold by 2050, and would then make some 75% of the global total. Domestically generated emissions from OECD countries, in comparison, should rise by a more modest 17%.

The share of each mode in overall transport emissions also differs depending on which part of the world you’re looking at: while 2/3 of emissions in OECD countries are from cars, freight and particularly trucking is currently more important in the context of emerging markets. Trucks actually generate over 40% of transport emissions in China, India Latin America and Africa.

On Monday, China officially launched the Asian Infrastructure Investment Bank (AIIB) in a ceremony with representatives from the bank's 57 founding-member countries. AIIB will have a capital base of US$100 billion, three-quarters of which come from within Asia.

Infrastructure is a growing need for Asia,
and collaboration is critical to filling
gaps. Photo: World Bank

At the inaugural ceremony in the Great Hall of the People, Chinese President Xi Jinping reaffirmed the new institution's mission, saying that "Our motivation [for setting up the bank] was mainly to meet the need for infrastructure development in Asia and also satisfy the wishes of all countries to deepen their co-operation."

Indeed, the AIIB is a major piece of China's regional infrastructure plan, which aims to address the huge needs for expanding rail, road and maritime transport links between China, central Asia, the Middle East and Europe. But the AIIB should also represent a huge opportunity for cooperation not only between countries in the region but also with other multilateral development banks.

Our experience working on transport mega-projects co-financed by several multilateral development banks (MDBs) already shows that this collaboration is much needed and critical for the success and viability of mega-projects. The most recent experience with the Quito Metro Line One Project, for example, shows that the co-financing banks – World Bank, Inter-American Development Bank, Andean Development Corporation and European Investment Bank – brought not only their financial muscle but also their rich and diverse global knowledge and experience. Incidentally, because of the Quito Metro project, all the MDBs involved in the project were dubbed as the “musketeers, ” precisely due to the high degree of collaboration and team work that is making this project a success.

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Ensuring that urban roads are designed to be accessible to all users — particularly to users with mobility challenges — has long been a cornerstone of the World Bank’s urban transport strategy. But even if making urban roads more accessible involves relatively simple interventions such as building functioning sidewalks with tactile markings and curbside ramps, consistent implementation has not been easy.

Although the incremental costs associated with such upgrades are fairly negligible, attention to detail is paramount. That is not always easy, and the attached picture (at right) taken during an implementation support mission some years ago illustrates this challenge quite well — this ramp is not aligned with sidewalk and too narrow for a wheelchairs to actually use.

Within that context, a project that took us to a series of medium-sized cities in North East China turned into one of the most memorable experiences of our careers. The Liaoning Medium Cities Infrastructure Project focused on rehabilitating and improving urban roads in five medium-sized cities of the industrial province of Liaoning. While on paper all the final designs complied with official accessibility requirements, the finished product often looked like the attached picture, with just enough askew to render the infrastructure unusable to many users. As the Bank team, we were struggling to get our counterparts within the city government to appreciate the issue. When we pointed out and followed up on particular issues, they would often see us as being nitpicky and somewhat out-of-touch with the gritty realities of construction in local conditions.

My last project in China before transferring to Europe and Central Asia in 2008 was the Yichang-Badong (Yiba) expressway. This was a US$ 2.2 billion expressway through very challenging terrain, including the ‘Three Gorges National Park’.

It was massive—as evidenced by the following:

172 km of expressways and 35.4 km of inter-connecting roads
148 bridges for a total length of 70 km
75 tunnels for a total length of 61 km
3.75 million m3 of earthworks
US$ 12.6 million/km

Faced with these challenges, including the longest tunnel of 7.5 km, the Hubei provincial government was concerned about the potential negative environmental impact of the project. These concerns were echoed by some at the Bank who I recall saying ‘why on earth would you want to put an expressway through a national park?’

The answer was quite simple. The expressway was going ahead with or without the World Bank’s involvement. The Hubei government wanted the Bank to assist them in making the project an example of how to construct an expressway through an environmentally sensitive area with minimal impacts. Management fully supported this and I was tasked with helping realize this vision, although unfortunately I was not involved with the implementation.

Follow the authors on Twitter: @shomik_raj and @cataochoa

Taxis plying the streets of Lima, Peru / Photo: Martin Garcia

Smartphone apps are bringing massive changes to the taxi industry in ways that urban transport has not seen in a long while. From the US to China and Latin America (Bogota, Mexico), taxi alternative services have attained an impressive level of penetration in a short amount of time, often with great controversy. Indeed, many cities across the world are struggling with what to make of these services and how to regulate them.

While we have not been significantly involved with such services thus far, a recently appointed mobility secretary in a big Latin American city has asked us for support on developing an approach to the shared taxi industry, as part of a "Smart Mobility" strategy for the city. In that context, we wanted to start a conversation on optimal strategies for cities to be able to welcome and foster such innovations, while still capitalizing on the opportunity to create value for its citizens.

World Bank Sr. Infrastructure Specialist Gerald Ollivier interacts with passengers on the new Wuzhou-Nanning rail line

During a supervision mission in May, our team had the chance to hear from railway users about the many ways in which the new rail line between Wuzhou and Nanning is already having an impact on their lives. Compared to the relatively theoretical ways in which we often assess and talk about railway impact (think "agglomeration benefits" or "improved connectivity and accessibility"), I found this experience refreshing and gratifying. For many, the opening of a new railway line brings about a host of opportunities, whether it is new jobs, the possibility of meeting more clients or meeting existing clients more frequently, a chance to visit relatives located far away, or maybe even an opportunity to do a bit of tourism.

The first half of the NanGuang railway line opened in mid April 2014. It is one of the six railway projects currently supported by the World Bank in China. It connects the city of Wuzhou to Nanning, two cities located 240 km apart, in the relatively poor autonomous region of Guangxi. The train, a brand new Electric Motorized Unit (see picture below), is clean and modern. It cuts across a highly mountainous terrain, zooming at about 200 kph through many tunnels and bridges.