IoT deals in European transport are getting bigger

IoT deals in European transport are getting bigger

The transport and logistics sectors are probably some of the strongest when it comes to appetite for IoT solutions and willingness to invest. We can see a growing number of deals being inked lately on the back of IoT solutions and platforms. More importantly, these deals are now well beyond proof of concept (POC) stage and often assume IoT solution deployments over large fleets of vehicles.  Also, it is worth mentioning that IoT deals are picking up across all of the transport sectors including rail, air, road and water transport.


IoT developments across transport industry

Train operators are among the front runners and a series of announcements made over recent months suggest that the industry is betting on IoT and digital technology to drive new levels of efficiency, but also to overhaul its business models. Reducing unplanned downtime is one of major priorities as it also reduces delays and fines for delays charged by the authorities. Some of Europe’s largest operators have kicked-off their IoT initiatives together with global tech providers, like for example Trenitalia and SAP, SNCF and IBM, Deutsche Bahn and Siemens, as well as VR Group and SAS.

Similarly, IoT is well on track to streamline operations in the airline industry, as companies are aiming to reach the next level of efficiencies and improve the customer experience. EasyJet invested into IoT-enabled CuteCircuit uniforms to improve efficiency of its cabin crew, as well as engineers on the ground. KLM is using KPN’s LoRa network to connect mechanics’ equipment so they can easily find their tools, which has direct impact on plane repair times. Lufthansa uses IoT enabled intelligent mobility solution based on electronic tags to locate and track the luggage within the terminals buildings, which has direct impact on customer experience.

Road transport companies are even more advanced in IoT adoption, thanks to the maturity of telematics devices that enable streaming of vehicle data that in turn can be used to develop applications such as predictive maintenance, mileage optimisation, infotainment services, etc.

In addition to improvements to the bottom line, transport companies see IoT as the key to unlock the topline growth as well, by expanding existing or developing new business models. One of the best practices when it comes to IoT, is its use as the enabler of intelligent mobility solutions. For example, the car rental company Sixt which used to provide standard daily based car rentals, has now teamed up with BMW and Vodafone to provide the car sharing service DriveNow. Sixt now even offers its intelligent mobility platform to other companies in the market via the Sixt Mobility business unit.


Future outlook

There are several reasons why the transport sector is among the front runners in IoT adoption. One of them is definitely the very diverse competitive landscape in which we see a growing number of new players getting large multi-million investments to compete with incumbents in both passenger and freight transport. Hence, in order to stay competitive and relevant in the market, incumbents are investing in digital technologies and IoT.

Also, when it comes to implementation of IoT solutions, the transport industry is much more flexible than other industries such as manufacturing, as its operations are quite decentralised and without complex processes such as the ones in manufacturing environments.

The growing number of infrastructure projects such as development of new railways, for example Crossrail in London, as well as smart cities initiatives, will definitely boost demand for IoT solutions, as they can enable applications such as remote monitoring of assets and premises, and significantly increase operations in terms of passenger throughput as well as passenger safety and security.

Still, as one of the most important drivers of IoT adoption in the sector we see the need for innovation and development of new business models based on multi modal transportation and cross-vertical collaboration. Both of these could be enabled by IoT solutions that provide almost real-time insight into operations of venues and vehicles, and unlock completely new sources of passenger and operational data that can be monetized. The expectations of transport companies are high, and are nicely encapsulated by Michael O'Leary, CEO of Ryanair, who according to The Guardian, stated that he has a vision of Ryanair offering free tickets in next five to ten years, where flights will be full and revenue will be based on revenue sharing with airports.

Finally, in other vertical sectors where transport plays a significant role, for example in supply chain, we see increasing demand by retailers that are aiming to streamline the operations of their fleets and improve driver engagement. Two great examples are UK retailers Tesco and Morrisons, both of which equipped their trucks with Microlise telematics platforms to achieve this.

At PAC we believe that IoT has a momentum in transport and logistics industries and shows solid opportunities for growth in future. Based on our latest research from Digital CX & IoT Research Cluster,  the Smart Transport sector in Germany will have 22.2% CAGR between 2017 and 2021.

PAC is about to launch a major study on the pace of IoT adoption in transport and logistics industries aiming to understand its role in driving of digital transformation initiatives at leading European transport and logistics companies. We will survey 200 senior decision makers in air, rail and road transport companies, and discuss the current and future focus of their IoT initiatives as well as their IoT investment plans.

We have a final opportunity for additional sponsors to support this research. If you are interested, please contact Mathieu Page at