Redding, California, Sept. 15, 2021 (GLOBE NEWSWIRE) — According to a new market research report titled “Smart Transportation Market by Transportation Mode, Product Type, Application (Mobility as a Service, Route Information, Route Guidance, Public Transport, Transit Hubs, Connected Cars), and Region — Global Forecast to 2028,” published by Meticulous Research®, the smart transportation market is expected to grow at a CAGR of 17.5% from 2021 to 2028 to reach $33.6 billion by 2028.
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According to the US Department of Transportation, “Intelligent Transportation Systems (ITS) apply a variety of technologies to monitor, evaluate, and manage transportation systems to enhance efficiency and safety.” Smart transportation can be defined as an advanced technology application that aims to provide innovative services associated with different modes of transport and traffic management that allow users to effectively utilize the modern transportation system.
Smart transportation systems facilitate better informed, safer, more coordinated, and smarter use of transport networks. These systems use advanced information and communication technologies applied to vehicles and transport infrastructure to help improve traffic management, minimize congestion, improve safety, reduce the impact of maintenance activities, and ultimately provide a more intelligent use of transport networks. Smart transportation is an integral part of modern-day smart city projects and hence, are gaining much-required traction in recent years, propelling the overall market growth.
The growth of this market is attributed to the government initiatives towards reducing greenhouse gas emissions, rising urbanization, increasing demand for efficient transportation, and technological advancements to enhance customer experience. In addition, the emergence of autonomous vehicles, increasing investments in smart city projects, and decline in vehicle ownership with the advancement of MaaS offers significant growth opportunities for the smart transportation market. However, the lack of standardized and uniform technology obstructs the growth of this market to some extent.
The Impact of COVID-19 on the Smart Transportation Market
In the first quarter of 2020, the world was hit by a COVID-19 pandemic. The outbreak was declared as a global pandemic by WHO, as it has spread in many countries across the globe and raised the number of cases multi-folds in few weeks. The COVID-19 pandemic has adversely hit many economies around the globe. The combat measures like complete lockdown and quarantine to fight against COVID-19 have put a strong adverse impact on many businesses across the globe, including the smart transportation market.
The effects of COVID-19 are being felt across the transportation sector. From maritime transportation to airlines, all modes of transportation felt the brunt of the pandemic. Travel restrictions were put in place to minimize the spread of the virus, which hindered the capability of companies to transport passengers from different places. As a result, transportation revenues dropped significantly, resulting in the deduction of wages and transport companies shutting their operation because of bankruptcy.
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To control the spread of COVID-19, countries placed restrictions on domestic transit and/or closed border crossings for road freight transport services. The maritime industry has largely proved resilient to the COVID-19 outbreak. Despite the crises, a vast majority of ports have succeeded in staying open to cargo operations. However, most of them remained closed for passenger traffic. Despite disruptions at ports, the shipping industry has largely continued to operate worldwide, facilitating essential supplies and medicines.
Transportation was among the most affected sectors globally. Transportation companies and governments faced several challenges to gain the customers’ trust back in them and safeguard their safety and security. Since the transport industry is among the most vulnerable and affected industries during the pandemic, it is anticipated that it will recover with a considerable growth rate over the forecasted period. Since transport is the most decisive cornerstone for a city’s functionality, development, and prosperity, revolutionizing transport transforms the concept of the city. Urban structure and transport system developments are closely connected, as evidenced by theories like the urban land rent theory and location theory, which conceptualize the connection between transport and urban land use.
Rising urbanization and demand for efficient transportation expected to drive the smart transportation market
Presently, more than half of the world’s population lives in urban areas. The migration of human resource towards cities is expected to continue at an even faster pace over the next few decades. By 2050, the global population is projected to reach around 9.8 billion, and it is estimated that more than twice as many people in the world will be living in urban (6.7 billion) than in rural settings (3.1 billion). Mobility provision and its impact on urban development can be significantly improved by employing intelligent transport systems in general and automated transport in particular. Also, as the cities grow in dimension, people will move to shop and access other social needs/wants, which often cause unavoidable congestion.
The challenge of congestion is a perennial issue for cities worldwide and is consistently getting more complex with every passing year. The increasing population in cities is straining urban transportation systems. People who live and work across major cities of the world are faced with increasing levels of congestion, delays, total travel time, costs, frustration, accidents, and loss of life. According to the INRIX (2018) Global Traffic Scorecard that analyzed congestion and mobility trends for over 200 cities across 38 countries, over half of the cities registered over 100 hours lost in congestion per driver per year. For instance, Americans lost 99 hours a year due to congestion, costing nearly USD 88 billion in 2019, an average of USD 1,377 per year.
Smart transportation utilizes information technology and artificial intelligence to efficiently manage and coordinate urban transportation systems. Artificial intelligence (AI) is a powerful concept still in its infancy that has the potential, if utilized responsibly, to provide a vehicle for positive change that could promote sustainable transitions to a more resource-efficient livability paradigm. AI interventions have potential applications for the vehicle, the infrastructure, the driver, or transport user, particularly for how these interact dynamically to deliver a transport service that promotes user empowerment and supports human-machine interactions. The provision of mobility solutions for battling congestion, pollution, and environmental degradation through AI technology that is capable of providing better, faster, cleaner, and cheaper ways to move around is the pillar, together with telecommunication and energy applications, of what we call smart cities and the way forward for urban science.
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Many cities are already adopting major smart transportation infrastructure. For instance, Seoul promoted smart public transport and raised their mass transit ridership from 30% to 70%. Implementation of programs such as advanced intelligent transportation systems, bus management systems, and GPS has helped the city mitigate the age-old problem of traffic management. In another instance, Germany invested EUR 9 billion to deploy and promote e-carsharing and EV fleets to counter traffic issues in Berlin.
To provide efficient analysis, Meticulous Research® has segmented this market based on transportation mode (roadways, railways, airways, and maritime), product type (solution (smart ticketing & toll, parking management, traffic management, passenger information, freight information, telematics, and others)) & (services (consulting, deployment & integration, support & maintenance), application (mobility as a service, route information and route guidance, public transport, transit hubs, connected cars, and others), and geography (Asia-Pacific, Europe, North America, Latin America, and the Middle East & Africa).
Based on transportation mode, the roadways segment is estimated to account for the largest share of the overall smart transportation market in 2021. The large share of this segment is attributed to the growing focus on developing better and sustainable roadways, government initiatives for promoting smart public road transportation, increasing demand for safer roads, and better traffic management to avoid congestion. In addition, the growing emphasis on the adoption of smart cities and green public transport is also contributing to the market growth. However, the railways segment is expected to grow at the highest CAGR during the forecast period due to the growing inter or intra country cargo transportation and increasing demand for smart railway solutions with enhanced safety, reliability, and operational efficiency.
Based on product type, the solutions segment is estimated to account for the largest share of the overall smart transportation market in 2021. Increasing concerns toward public safety, growing traffic congestion problems, favorable government initiatives for effective traffic management, increasing adoption of eco-friendly automobile technologies, and rising investment in smart city projects are expected to drive the growth of smart transportation solutions. However, the services segment is expected to grow at a higher CAGR during the forecast period.
Based on application, the route information and route guidance segment is estimated to account for the largest share of the overall smart transportation market in 2021. Increasing demand to monitor various modes of transportation, controlling traffic congestion, and increasing road accidents are the major factors driving the demand for the segment. Besides, the connected cars segment is expected to grow at the fastest CAGR during the forecast period. The rise in consumer demand for connectivity solutions and the surge in need for constant connectivity are the key factors contributing to market growth.
Geographically, Europe is expected to command the largest share of the global smart transportation market in 2021. Consistently growing government investments in improving the region’s urban transport and traffic system, especially in the U.K and France, helped the region emerge as the leading global smart transportation market. Moreover, increasing cross-border trade also supported the traffic in the region, promoting the demand for smart transportation in the European economies. Besides, the Asia-Pacific region is projected to grow at the highest CAGR in the forecasted period. Progressive investments by countries such as India, Japan, and China in megacities to modernize their transportation networks for facilitating enhanced trade exchanges and multiple smart city projects across Asia-Pacific are helping the region grow faster.
The key players operating in the global smart transportation market are Thales Group (France), Huawei Technologies Co., Ltd. (China), Siemens AG (Germany), IBM Corporation (U.S.), Cisco Systems, Inc. (U.S.), SAP SE (Germany), Cubic Corporation (U.S.), Alstom (France), Bentley Systems, Inc. (U.S.), Toshiba Corporation (Japan), Harris Corporation (U.S.), Saab AB (Sweden), Veson Nautical (U.S.), BASS Software Ltd. (Norway), Indra Sistemas (Spain) and among others.
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Scope of the Report
Smart Transportation Market, by Transportation Mode
Smart Transportation Market, by Product Type
- Smart Ticketing & Toll
- Parking Management
- Traffic Management
- Passenger Information
- Freight Information
- Deployment and Integration
- Support and Maintenance
Smart Transportation Market, by Application
- Mobility as a Service
- Route Information and Route Guidance
- Public Transport
- Transit Hubs
- Connected Cars
Smart Transportation Market, by Geography
- North America
- Rest of Europe
- Rest of Asia-Pacific
- Latin America
- Rest of Latin America
- The Middle East and Africa
- Rest of MEA
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