In the beginning, ITS research, development, and investment focused on urban automobile transportation and a totally
public organisational structure and management. It has now evolved to include all types and levels of transportation, persons
as well as freight, for which private industries offer a variety of extended, adapted and targeted services. Tremendous
challenges and opportunities exist for ITS research, development, and business, particularly so in the area of freight transportation
that, until recently, appeared relatively less prominently on the agenda of ITS stakeholders. Indeed, the development
of Freight ITS and the evolution of the freight-transportation industry are closely related, particularly relative to the use
of information and decision technologies in response to the tremendous shift in commercial and industrial practices of the
last decade. This is in stark contrast to most other ITS areas, where the needs of people mobility in congested urban centers
constitute the overwhelming driving force.
While it is certainly too early to make a definitive assessment of the effectiveness of ITS, it is not to take stock of what has
been achieved and, more importantly, to think about what could be achieved in the near future. In our opinion, ITS developments
have been up to now largely hardware-driven, and have led to the introduction of many sophisticated technologies
in the transportation arena. We are thus now, among other things, in the position to collect enormous amounts of data about
the current state and the operations of transportation systems, and to transmit rapidly these data, in one form or the other, to
transportation authorities, carriers, and travellers. Two critical questions remain though: are all of these data transformed
into useful information? And, is this information properly exploited? The correct answer to both of these questions is clearly
negative. The reason for this situation is that the development of the software component of ITS, models, decision-support
systems, and so on, has been dramatically lagging behind that of its hardware component. In many cases, very detailed data
are still processed and acted upon by the human operators with very few decision-support tools, if at all. In a sense, we are
now faced with a challenge similar to the one that led to the initial development of ITS, that is, to make the best, the most
intelligent usage possible of all that wonderful hardware that is being deployed. We believe that transportation planning and
management disciplines, and in particular operations research, have a key role to play with respect to this challenge.
Challenges for the freight-transportation industry result from the major changes affecting supply chains and logistical
processes in trade and commerce. The first factor is the strong impetus toward inventory reduction that led to the ‘‘Justin-
Time” procurement practices and, more recently, to just-in-time replenishments of goods in the retail industry. The globalization
and liberalization of markets and the creation of free trade zones constitute the second major changing factor. The
restructuring of manufacturing and distribution channels worldwide has accompanied the globalization of the economy.
Production units are re-located, and the components required for the final assembly of complex industrial products are often
brought in from many distant locations. Continuously increasing volumes of industrial, commercial, and consumer goods are
imported into Europe and North America and transported over long distances from the so-called emerging-economy countries,
e.g., China, India, and Brazil. All the while, trans-national centralized warehousing facilities and value-added distribution
centers are changing the flow of goods almost everywhere.
The development of Internet-based electronic business is also strongly contributing to the transformation of the freighttransportation
industry. The main external factors driving this transformation are the modifications to the logistic chains and
practices of major industries and economic sectors, the proliferation of electronic spaces (websites) where shippers and carriers
may meet and close deals, and the continuously increasing volume of individual consumer e-commerce activities. These
changes have certainly resulted in higher demand for transportation. They have also increased the requirements for freighttransportation
services in terms of enhanced customer value: reduce transportation and distribution costs, while responding
to the customer needs in terms of delivery time and reliability. Moreover, events such as 9/11, the war on terrorism, and the
war on drugs have created potential impediments to the flow of goods due to safety and security threats that can only be
mitigated through the use of technology and increased efficiency.
Last but not the least, environmental and energy concerns are taking center stage. Indeed, the transportation sector is
responsible of a significant amount of greenhouse gas emissions: 13% of all emissions of greenhouse gases and 23% of world
CO2 emissions from fossil fuel combustion (ITF, 2008). The last measure stands at 30% in countries of the Organisation for
Economic Co-operation and Development (ITF, 2008) and was 27% in the United States in 2003 (EPA, 2006). It is estimated
that the freight transportation contributes roughly a third of the CO2 emissions of the world transport sector (ITF, 2008). This
distribution is uneven, however, being worse in large cities, for example. Thus, a report by the Organisation for Economic Cooperation
and Development (OECD, 2003) assigns 43% of sulphur and 61% of particulate matter emissions in London to
freight transportation, while for nitrogen oxides emissions, the figures are 28% for London, 50% for Prague, and 77% for Tokyo.
These contributions are growing and are expected to continue to grow with the increase in the freight-transportation activity
and the corresponding consumption of fossil fuels. The impact on the freight transportation and logistics sector comes both
from the initiatives to control, hopefully reduce, emissions and environmental impacts (e.g., vehicle emission legislation and
environmental and congestion road pricing) and from the increases in the cost of energy.
These factors have put, and continue to put, tremendous pressure on the freight carriers and the managers of intermodal
facilities to reduce and control costs, to plan and operate efficient, timely, and reliable services, and to react rapidly to new
customer requests, emerging or shifting business opportunities, and changes in the economic and regulatory environment.
The freight-transportation industry bases a significant part of the answer it offers to these challenges on information and
decision technologies: two-way communication, location and tracking devices, electronic data interchange, advanced planning
and operation decision-support systems, and so on. Intelligent Transportation Systems integrate and enhance these
technologies within the firm, as well as through the linkages and exchanges between the firm and its environment (customers,
partners, regulators, etc.). Moreover, the volatility of the stock exchange notwithstanding the trend of e-business devel-opment and utilization is clear and strong. This signals to transportation firms, as to other economic agents, that significant
opportunities exist in terms of larger and stronger business partnerships, more streamlined, rapid, and demand-responsive
decision processes, improved operations and service levels, enhanced customer satisfaction and, ultimately, profitability. To
reap the benefits of these opportunities, freight carriers may take advantage of the convergence of ITS and e-business technologies
and the possibility of integrated, advanced operations research-based planning and operation decision-support
systems.
In the beginning, ITS research, development, and investment focused on urban automobile transportation and a totallypublic organisational structure and management. It has now evolved to include all types and levels of transportation, personsas well as freight, for which private industries offer a variety of extended, adapted and targeted services. Tremendouschallenges and opportunities exist for ITS research, development, and business, particularly so in the area of freight transportationthat, until recently, appeared relatively less prominently on the agenda of ITS stakeholders. Indeed, the developmentof Freight ITS and the evolution of the freight-transportation industry are closely related, particularly relative to the useof information and decision technologies in response to the tremendous shift in commercial and industrial practices of thelast decade. This is in stark contrast to most other ITS areas, where the needs of people mobility in congested urban centersconstitute the overwhelming driving force.While it is certainly too early to make a definitive assessment of the effectiveness of ITS, it is not to take stock of what hasbeen achieved and, more importantly, to think about what could be achieved in the near future. In our opinion, ITS developmentshave been up to now largely hardware-driven, and have led to the introduction of many sophisticated technologiesin the transportation arena. We are thus now, among other things, in the position to collect enormous amounts of data aboutthe current state and the operations of transportation systems, and to transmit rapidly these data, in one form or the other, totransportation authorities, carriers, and travellers. Two critical questions remain though: are all of these data transformedinto useful information? And, is this information properly exploited? The correct answer to both of these questions is clearlynegative. The reason for this situation is that the development of the software component of ITS, models, decision-supportsystems, and so on, has been dramatically lagging behind that of its hardware component. In many cases, very detailed dataare still processed and acted upon by the human operators with very few decision-support tools, if at all. In a sense, we arenow faced with a challenge similar to the one that led to the initial development of ITS, that is, to make the best, the mostintelligent usage possible of all that wonderful hardware that is being deployed. We believe that transportation planning andmanagement disciplines, and in particular operations research, have a key role to play with respect to this challenge.Challenges for the freight-transportation industry result from the major changes affecting supply chains and logisticalprocesses in trade and commerce. The first factor is the strong impetus toward inventory reduction that led to the ‘‘Justin-Time” procurement practices and, more recently, to just-in-time replenishments of goods in the retail industry. The globalizationand liberalization of markets and the creation of free trade zones constitute the second major changing factor. Therestructuring of manufacturing and distribution channels worldwide has accompanied the globalization of the economy.Production units are re-located, and the components required for the final assembly of complex industrial products are oftenbrought in from many distant locations. Continuously increasing volumes of industrial, commercial, and consumer goods areimported into Europe and North America and transported over long distances from the so-called emerging-economy countries,e.g., China, India, and Brazil. All the while, trans-national centralized warehousing facilities and value-added distributioncenters are changing the flow of goods almost everywhere.The development of Internet-based electronic business is also strongly contributing to the transformation of the freighttransportationindustry. The main external factors driving this transformation are the modifications to the logistic chains andpractices of major industries and economic sectors, the proliferation of electronic spaces (websites) where shippers and carriersmay meet and close deals, and the continuously increasing volume of individual consumer e-commerce activities. Thesechanges have certainly resulted in higher demand for transportation. They have also increased the requirements for freighttransportationservices in terms of enhanced customer value: reduce transportation and distribution costs, while respondingto the customer needs in terms of delivery time and reliability. Moreover, events such as 9/11, the war on terrorism, and thewar on drugs have created potential impediments to the flow of goods due to safety and security threats that can only bemitigated through the use of technology and increased efficiency.Last but not the least, environmental and energy concerns are taking center stage. Indeed, the transportation sector isresponsible of a significant amount of greenhouse gas emissions: 13% of all emissions of greenhouse gases and 23% of worldCO2 emissions from fossil fuel combustion (ITF, 2008). The last measure stands at 30% in countries of the Organisation forEconomic Co-operation and Development (ITF, 2008) and was 27% in the United States in 2003 (EPA, 2006). It is estimatedthat the freight transportation contributes roughly a third of the CO2 emissions of the world transport sector (ITF, 2008). Thisdistribution is uneven, however, being worse in large cities, for example. Thus, a report by the Organisation for Economic Cooperationand Development (OECD, 2003) assigns 43% of sulphur and 61% of particulate matter emissions in London tofreight transportation, while for nitrogen oxides emissions, the figures are 28% for London, 50% for Prague, and 77% for Tokyo.These contributions are growing and are expected to continue to grow with the increase in the freight-transportation activityand the corresponding consumption of fossil fuels. The impact on the freight transportation and logistics sector comes bothfrom the initiatives to control, hopefully reduce, emissions and environmental impacts (e.g., vehicle emission legislation andenvironmental and congestion road pricing) and from the increases in the cost of energy.These factors have put, and continue to put, tremendous pressure on the freight carriers and the managers of intermodalfacilities to reduce and control costs, to plan and operate efficient, timely, and reliable services, and to react rapidly to newcustomer requests, emerging or shifting business opportunities, and changes in the economic and regulatory environment.The freight-transportation industry bases a significant part of the answer it offers to these challenges on information anddecision technologies: two-way communication, location and tracking devices, electronic data interchange, advanced planningand operation decision-support systems, and so on. Intelligent Transportation Systems integrate and enhance thesetechnologies within the firm, as well as through the linkages and exchanges between the firm and its environment (customers,partners, regulators, etc.). Moreover, the volatility of the stock exchange notwithstanding the trend of e-business devel-opment and utilization is clear and strong. This signals to transportation firms, as to other economic agents, that significantopportunities exist in terms of larger and stronger business partnerships, more streamlined, rapid, and demand-responsive
decision processes, improved operations and service levels, enhanced customer satisfaction and, ultimately, profitability. To
reap the benefits of these opportunities, freight carriers may take advantage of the convergence of ITS and e-business technologies
and the possibility of integrated, advanced operations research-based planning and operation decision-support
systems.
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