How to Stop a Train from Derailing

Human error is a terrifying thing.

Each and every year, thousands of U.S. citizens die as a direct result of sheer biological incompetence, or simple mistakes, if you will.

This includes hundreds of unintentional firearm discharges, nearly 100,000 medical mishaps, 30,000 accidental falls, 34,000 motor vehicle accidents, and 39,000 accidental poisoning cases, just to name a few.

In fact, unintentional injuries are the fourth-leading cause of death in the U.S., trailing behind only heart disease, cancer, and lower respiratory diseases.

Sadly, if there’s one thing humans have been consistently good at throughout history, it’s getting ourselves (and the people around us) killed. Fortunately enough, though, we do have the technology to put an end to that.

Stopping Tragedy in its Tracks

On Tuesday, this fact was especially apparent when an Amtrak train came barreling through a sharp curve traveling at 106 miles an hour.

The train was going too fast — more than twice as fast as it should have been — and it derailed, killing at least seven unsuspecting travelers and injuring hundreds.

It’s an incredibly tragic story, especially considering it could have been completely prevented if not for the over-reliance on human control.

You see, there’s a set of technology out there that could have easily prevented this week’s Amtrak disaster. It’s called positive train control, or PTC.

In short, PTC is a collection of technologies that supports the automated control and wireless monitoring of train movements. By creating what some have called “the connected rail,” the idea is that we could realistically detect accidents before they happen.

Here’s what National Transportation Safety Board member Robert Sumwalt told reporters Wednesday regarding PTC:

Based on what we know right now, we feel that had such a system been installed in this section of track, this accident would not have occurred.

In response to several fatal train accidents in the early 2000s, Congress passed the Rail Safety Improvement Act of 2008, mandating the deployment of PTC. However, the vast majority of trains in the U.S. are still not equipped.

One reason for this is that the time line was too long, with deadline extensions being proposed through 2020. Another is that Congress, despite mandating this new tech, never even bothered to fund the technology.

Political discourse aside, the key takeaway here is that much of the transportation and infrastructure in the U.S. — and across the globe — is still highly imperfect. Not until we take full advantage of technology will we be able to stop tragedy in its tracks.

And as New York Rep. Steve Israel points out, “It’s not just our trains. It is our bridges that are failing. It is our highways that are congested and riddled with potholes. It is our runways, our airports… We are divesting from America.”

Machines That Talk

Now, in regards to government, Senator Israel may have a point, but when you look at the private sector, there’s actually not much divesting going on at all.

You see, PTC is actually just one component of a much, much larger industry — one that’s already seeing billions of dollars in investments from technology companies across the globe.

In fact, this industry is estimated to have an economic impact as high as $19 trillion by 2020. Google is in on it. Tesla is in on it. So are countless other tech pioneers looking to change the world.

If you’re still not quite sure what I’m referring to, I’m talking about the Internet of Things, which — mark my words — will be the single-biggest technological revolution in the history of mankind. Connecting people with the Internet was one thing, but connected machines are an entirely different story.

When machines talk, they make appropriate decisions in fractions of a second. When people talk, you’re lucky if they make a decision at all.

This is why machine-to-machine (M2M) communication is so incredibly valuable — it cuts out the shortcomings of human nature. It removes bias, laziness, lack of attention, emotion, pride, and all that other junk that has no place in the world of actually getting things done efficiently.

In regards to transportation, the specific area for investors to pay attention to is telematics, which involves the tracking and diagnostics of vehicle fleets. This includes trains but extends to planes, automobiles, and drones as well.

Within less than five years from today, Gartner expects a quarter billion connected vehicles worldwide. For perspective, that’s almost the entire body of cars and trucks on U.S. roads today (253 million). This surge of connected vehicles will be a benefit not only to our safety but to our wallets as well.

For one, insurance companies will soon provide incentives for safe driving using M2M communication. For instance, by 2020, the SAS estimates that over 25% of all U.S. auto insurance premium revenues will be generated via telematics. As for Europe — the world’s largest auto-insurance market — the projections are even higher at nearly 40%.

Then, of course, there’s the investment opportunity that comes with this emerging industry. Publicly traded telematics companies currently add up to just over $24 billion in capitalization today. Yet annual revenue for this group of companies is expected to reach $20 billion, according to Juniper Research — not a bad forward multiple at all.

If any of this happens to peak your interest, make sure to keep an eye out in the coming weeks and months. Our top telematics play will be included in a breaking presentation we’re working on regarding a piece of technology we call “The Hawkinson Cipher.”

But more on that another day.

Until next time,

Jason Stutman

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