2018 Integrated Report – On track towards a better Railway

Targets and strategy

Trend efforts include change in the environment

We monitor changes in our environment and use them to develop strategies, new business models and innovative products and services. We also identify future requirements based upon specific visions that consolidate assumptions about future developments that are directly relevant to DB Group.

In the year under review, we expanded our Network of the Future – which is made up of market, strategy, person­­nel, sales and technology experts – and continued to promote cooperation within this network. We have carried out a systematic trend analysis and assessment in the fields of markets, society, technology and politics, and amalgamated them to produce a consistent and comprehensive view of the future. This analysis focuses on how future developments will impact on DB Group’s business operations or on our markets and the urgency of these effects. The individ­­ual topics are highly interconnected and constantly changing.

In the year under review, our trend monitoring focused upon four themes. In all these areas, it is particularly im­por­t­­ant that we take the correct approach now to ensure that our business is fit for the future.

Digitalization and automation

New digital technologies and intelligent, learning IT systems are enabling the full digitalization of many sectors. This process is being facilitated, in particular, by the automation of a number of work stages. However, tasks that call for intelligence and creativity cannot be automated. In these fields, human beings are increasingly being assisted by new systems based upon artificial intelligence such as self-driving cars or digital assistants, that can learn independently and respond to unforeseen situations.

In railway operations, too, digitalization and automation are opening up promising opportunities for development. Digital interlockings and the European Train Control System (ETCS), as well as the associated digital applications for rail operations, are allowing us to alleviate the quality problems caused by outdated systems and im­­pend­­ing personnel shortages, reduce operating costs and expand network capacity in the long term.

On-demand offerings

Digitalization is changing people’s expectations regarding consumption. Products and services need to be available immediately and at any time, that is on demand. Increasingly, this is resulting in same-day or even same-hour deliveries, which tend to be supplied as smaller, more frequent shipments. This calls for new logistical concepts and delivery methods such as drones, delivery robots or cargo bikes.

In individual mobility, too, there is a clear trend towards offerings that are available in real time. In the foreseeable future, we will start seeing autonomous vehicles that adapt dynamically and efficiently to passenger demand rather than buses with fixed routes and timetables. Public passenger transport will thus be extended to include individual public transport.

Against this backdrop, DB Group is positioning itself both as a platform provider and an operator, firstly enabling third parties – that is public transport authorities and trans­­port companies – to offer on-demand transport in their own name and gradually integrate autonomous driving on the road into public transport, and secondly operating our own on-demand mobility services that serve as a feeder for rail passenger transport.

Smart and sustainable cities

Because people generally like urban living and because both job opportunities and services tend to be better in towns and cities, it is predicted that the proportion of people living in urban environments will rise to almost 85% by 2050. At the same time, mobility requirements for both people and goods are growing, posing challenges for cities and conurbations.

Cities are responding to these changes firstly by im­pos­­ing regulations such as bans on diesel vehicles and, secondly, by promoting innovative solutions that aim to promote efficiency, technological progress and social and ecological improvements in urban life. They often do this in collaboration with partners from industry. We support cities especially with our product development organization Smart Cities. We are working on topics such as coworking spaces in stations and a comprehensive data analysis platform to optimize urban products and services and identify new business potential.

Digital platforms

Digital platforms are becomingly increasing commonplace and they are revolutionizing spheres of life and business such as logistics, purchasing and communication. Such platforms offer participants a digital network structure that makes it easy to exchange information and services, meaning that their benefits and attractiveness increase with the number of users.

Conventional business models are increasingly being driven out by Internet platforms such as Amazon, Zalando or Booking.com, and social networks such as Facebook and Instagram have spawned completely new needs and markets. The companies behind these platforms systematically collect and exploit user data so that they can offer services or products faster, more cheaply and with greater flexibility and choice. In the logistics sector, in particular, networking via digital platforms allows customers and suppliers to find each other more quickly, thereby optimizing the provision of transport services.

We, too, are active in the platform business and are devel­­oping digital platforms such as Box2Rail (for the easy and transparent booking of rail transport) so that we can offer our customers and business partners new options relating to our product portfolio.