Essay by Dr. Heiko Fischer, Chairman of the Executive Board of VTG Aktiengesellschaft


Smooth, friction-free transport chains are essential in a globalised world – especially when the volume of international freight transport is growing. Yet while road haulage performance continues to increase, rail freight transport has been stagnating for years. In 2016, Germany’s Federal Statistical Office put the rail freight figure for Germany at 116 billion tonne-kilometres – a mere 18-percent share of the overall market, and only slightly up on 2010.

Be that as it may, I firmly believe that rail has the potential to become one of the key solutions for the freight transport of the future. A glance at the environmental performance data alone provides weighty arguments for a strong rail sector: Compared to road haulage, rail transport slashes CO2 emissions by 80 percent per tonne and kilometre.* A single goods train has a loading capacity equivalent to about 30 or 40 trucks. This fact alone, however, is far from enough to make rail attractive in the long term. The pivotal issue is the need to find sustainable and economical transport solutions that make a compelling case for themselves in competition with other alternatives. And that is where digitalisation comes in as the key to unlock the potential of rail. In other areas, digital services have long since become part for the course and are routinely improving efficiency and transparency. So it is high time for rail to catch up – if it doesn’t want to be left behind by road transport.


Digitalisation of the VTG fleet

As one of the leading railcar leasing and rail logistics companies in Europe, VTG AG feels a strong sense of responsibility on this matter. We want to reinforce rail and make it the backbone of smart and sustainable logistics. We want it to be more competitive. And the way to do so is, very clearly, to commit to digitalisation. That is why, over the past year, we have hammered out a comprehensive digitalisation strategy and laid the foundation for new services in this industry. Over the next four years, we will fit a telematics system to our entire continental European fleet, which is a huge step towards making both VTG and the whole industry more competitive. The digitalised freight cars are the cornerstone of the new VTG Connect service.


Useful functions for more efficient rail transport

This digital technology establishes connectivity between customer, railcar and freight consignment. It also provides a series of functions to optimize the logistics process and make the entire supply chain more transparent. The solar-powered telematic boxes affixed to each railcar can in future supply users with information about their railcar in real time: Where is the freight car? What is the estimated time of arrival? What is the outdoor temperature at the railcar’s current location? VTG Connect provides real-time answers to these and many more questions. Tracking and tracing functionality draws on satellite positioning to keep a close watch on the exact intensity of use and the mileage clocked up by every single railcar. This information in turn facilitates more efficient railcar scheduling, reducing both idle and round-trip times and thereby raising productivity.

At the same time, VTG Connect moves us a major step further in the direction of predictive maintenance. A precise knowledge of railcar mileage will in future enable maintenance and servicing work to be planned and performed exactly when it is really needed.

Going forward, a wide range of other services could be added. Temperature and fill-level sensors could, for example, be hooked up to continually document the status of the freight consignment. The work of the wagon technician too could be made more efficient. For instance, the condition of the brakes could be monitored using special sensors, and the data could be examined using digital analytics.


The future of rail is digital

As a company, we have made a start with VTG Connect. We have taken an important step towards digitalisation. The industry itself is taking action, but the political community must now also get on board. Digitalisation opens up vast potential for optimization not only at the level of the railcar, but for rail as a medium. The automated production of route plans could improve the use of track capacity, for example. Digital monitoring technologies can play a part in identifying and remedying damage at an early stage. That would cut costs, especially as it would allow rail capacity to be increased. Yet this is the responsibility of all the actors involved: All relevant stakeholders must pull together to chart a resolute course for the digital rail freight transport of the future.

* Association of German Transport Companies (VDV)