Tuesday, March 22, 2016

Rail needs a step change in performance

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RAIL has huge potential for growth, but all too often it fails to realise this due to high costs, poor service quality which make it unattractive, or lack of marketing. Rail needs to address these deficiencies and make the most of its strengths, and it needs to do so quickly before autonomous-driving road vehicles make life even harder.

These were some of the clear messages to emerge from the International Railway Summit staged by IRJ and Irits in Vienna in February. Mr Jean-Pierre Loubinoux, director general of the International Union of Railways (UIC), wants rail to become the backbone of the transport system, and highlighted the potential for rail up to 2030 where freight traffic could grow eight-fold and passenger 12-fold.

Loubinoux pointed out that another 2 billion people in the world will become urbanised, which he described as "the biggest movement of people in human history." In addition, the world's population is forecast to grow by another 2 billion and there are 2 billion people on earth who have no access to any form of transport.

Rail generally does well in cities with high market shares as it is able to play to its strengths and benefit from increasing investment. As Mr Alain Flausch, secretary general of the International Association of Public Transport (UITP), pointed out there were 160 metros in operation worldwide in 2015 and another 2700km of new lines are under construction. Flausch also highlighted the growing interest in light rail around the world. While 41 LRT systems opened between 1985 and 2000, 70 new systems opened between 2000 and 2015.

Full automation of metros is steadily increasing with 674km covering 48 lines currently operating without drivers. However, while metros already have the ability to operate trains automatically we now need to extend this technology to main line railways where initiatives to reduce costs and increase competitiveness are sorely needed.

It is salutary to note that rail currently only has 1% of the $US 600bn Asia - Europe freight market despite its considerable transit time advantage compared with sea - with rail's higher price being the main deterrent. As Ms Maria Leenen, CEO of the German market study specialist SCI Verkehr, observed, rail's market share of the European Union freight market has fallen by 1% since 2001 to 18% in 2014, and while tonne-km rallied after 2008-09 crash it is still below the 2007 peak, while the huge drop in the price of oil is starting to make road transport more attractive again.

Several European railways are concerned about the rapid expansion of long-distance bus services. This may be so, but buses still only account for a tiny share of the market and rail needs to fight back by highlighting its ability to offer higher comfort, better reliability and shorter journey times. Replacing trains with buses is not a solution as it will only further undermine the viability of railways.

Leenen believes that management of productivity and quality must become core activities within railways, and that there is the potential to improve railway productivity by 30%. This was backed up by Flausch: "We need to create a feeling of urgency within organisations to change - they feel they are there forever," he says. "We brought in marketing people in the 2000s, now we need good financial people."

Dr Johann Pluy, general manager of railway systems with Austrian Federal Railways (ÖBB) Infrastructure, believes railways need to use their fixed-cost infrastructure more efficiently. "Our time to market is much too long," Pluy says. "We need to shift the balance from civil engineering to include train control and innovation - interlockings and train control are too expensive. We need more innovation - railways don't take advantage of the technical progress being made in other industries fast enough, and our use of mobile communications is not very intelligent. We need competitive infrastructure costs, and to learn how to cope with less subsidy - subsidies make us lazy and slow."

Mr Andy Doherty, chairman of the European Rail Research Advisory Council (Errac), believes that the Shift2Rail research initiative will go a long way towards reducing costs by challenging current thinking in many areas. "We need to convince society that there is a benefit from investing in rail," Doherty told delegates. "We need to build on rail's advantages and eliminate the George Stephenson-era things which don't work well. We need to think about convoying of trains to increase capacity, and use mechatronics for bogies so that they react better to the track. Signalling is designed around the lowest performance of a train on a line, so we need to get away from this. I want people to open their eyes to new possibilities and to be more adventurous."

This is the sort of thinking which railways need to embrace if they are to achieve a real step change in performance to make railways more competitive. The industry's survival depends upon it.

David Briginshaw

David Briginshaw joined IRJ in 1982 as associate editor, and was appointed editor-in-chief in 2001. He has travelled the world extensively interviewing many of the CEOs and senior managers of the world's railways and transit systems which has given him an in-depth knowledge of the global railway industry.