Globalization, urbanization, population growth and technological innovation. Each of these challenges push today's transportation providers to be innovative. IBM can help build a smarter planet with smarter transportation.

1. Let’s Build a Smarter Planet: Transportation V12

5. Drivers of change Exploding populations, urbanization, globalization and technology are driving change, which creates unique challenges and opportunities for transportation providers. It took all of history for human population to reach 2 billion, and only one generation to more than triple to nearly 7 billion. 2 billion / 7 billion International trade in manufactured goods increased more than 100 times (from $95 billion to $12 trillion) in the 50 years following 1955. >100x growth In 2010 there are 476 urban areas with at least 1 million people. That’s an increase of 573% from 1950 when there were 83. Over half the world’s population now lives in urban areas. 476 cities over 1 million Today, there are over 4 billion mobile phone users, and over 1 billion internet users, growing rapidly to 2 billion. 4 billion / 1 billion

6. The need for progress is clear. Traffic congestion costs the European Union over 1% of GDP, or over 100 billion Euros per year. 100 billion Euros Capacity and congestion By 2020 there may be global demand for 7 billion air passenger trips. Yet airports and airlines will only have capacity for 6 billion. (Organization for Economic Cooperation and Development) 7 billion / 6 billion The world will spend about $30 trillion over the next two decades on new roads and similar projects according to CIBC economist Benjamin Tal. $30 trillion 30,000 people from 47 countries downloaded an airline’s new smartphone application in the first 6 days. 30,000 in 6 days Empowered customers 60% of consumer sentiment around the U.S. air travel industry is negative, and there are 19% fewer brand-loyal travelers in 2008 than in 2006—a recipe for commoditization. 60% and -19% 59% of on-line consumer purchases in China are influenced by user generated content. 59% purchase influence

7. The need for progress is clear. U.S. road traffic congestion during 2007 wasted 2.8 billion gallons of fuel and 4.2 billion hours. Total cost of wasted fuel and time was $87.2 billion. 2.8 billion gallons 4.2 billion hours Efficient, green operations Airlines worldwide generate 3% of all greenhouse gas emissions. Some say that because aircraft operate in the upper atmosphere, the impact may be equivalent to 13% of emissions from all sources. 3% or 13% The U.S. Department of Transportation reports over 41,000 road fatalities every year from 1995 to 2007. >41 thousand lives Safety and security Airlines spend $5.9 billion per year on security (IATA). Airports spend >60% of their operating cost on safety and security (ACI). $5.9 billion >60% of operating cost

8. The opportunity for progress is clear. A European city reduced traffic by up to 18%, and increased use of public transit by 80,000 passengers per day. Citizens voted to support the project. 18% less traffic Airline industry environmental targets: 1.5% average annual improvement in fuel efficiency from 2009 to 2020. Cap aviation CO 2 emissions from 2020 onwards (carbon neutral growth). 50% reduction in CO 2 emitted by 2050 relative to 2005. 1.5% per year 50% by 2050 One ton of rail freight can be moved 423 miles using one gallon of fuel, and a single freight train can replace 280 trucks, reducing fuel use, congestion and emissions. 423 miles using 1 gallon A container port in the UK reduced equipment breakdowns by 10%. 10% fewer breakdowns A European airport reduced mishandled baggage by 60% using an innovative RFID-based solution. 60% fewer delayed bags An Asian high-speed railway achieves 99.15% on-time performance. 99.15% on time

10. The world is becoming smaller and flatter, and also smarter.

12. Success will depend on deeper, more holistic and informed planning, collaboration and execution. Transportation providers will need to become smarter. PREDICT DEMAND AND OPTIMIZE CAPACITY AND ASSETS Predict demand, align transportation assets and infrastructure deployment and continuously adapt operations. DRAMATICALLY IMPROVE THE END-TO-END TRAVELER OR CUSTOMER EXPERIENCE Understand customer needs and provide information and services to meet those needs in the manner preferred. TRANSPORTATION PROVIDERS IMPROVE OPERATIONAL EFFICIENCY WHILE REDUCING ENVIRONMENTAL IMPACT Continuously balance cost and environmental impact of scarce resource use while exploring new operational alternatives. ASSURE SAFETY AND SECURITY Leverage new sources of information and new ways of using that information to improve security and safety.

13. They will do so by becoming instrumented, interconnected and intelligent.

14. The transistor was invented 60 years ago… Today, there are 1 billion transistors for each person on earth. 1 billion people are connected to the internet… Soon growing to 2 billion people. Over 4 billion mobile phone subscribers by the end of 2009… By 2010, there will be 30 billion RFID tags embedded into our world.

22. An opportunity to think and act in new ways. Improve operational efficiency while reducing environmental impact. Dramatically improve the end-to-end traveler or customer experience. Predict demand and optimize capacity and assets. + + = Assure safety and security.

24. Smart transportation: Predict demand and optimize transportation capacity and assets. Stockholm—IBM solutions improved congestion and quality of life reducing peak period traffic by 18%. Use of public transit increased by 80,000 passengers per day. CO 2 emissions from vehicles were reduced by 14%. Increased revenue is channeled back into improving public transportation. Queensland Motorways reduced road congestion during peak hours, improved Brisbane commuter experience and supports local economic prosperity by avoiding traffic snarls in commercial areas. A large railway in Asia uses an automated crew scheduling system that evaluates the skills and location of available employees in real time to assign staff to scheduled trains. Employees receive their assignments via cell phone text messages, and log in to work using biometric scanners, ensuring positive identification and access control. The system provides management with real time information about available staff and forward-looking intelligence to optimize resource allocation, reducing staff shortages and overtime expense. Netherlands Railways uses ILOG software to weigh 56,000 variables including passenger demand and available assets to assemble and schedule over 5,000 trains per day, realizing a 6% savings in operating efficiency and saving $28.5M per year. Also improved on-time performance by 2%, helping capture an additional $57M in fares.