Rail freight needs to adopt a similar approach to the commercial airline industry if it’s to fully recover from the 2009 crisis, an industry expert has said.
The claims follow figures released by SCI Transport showing that European rail freight companies are continuing to record weak margins despite growing transport volumes.
Anand Medapali, vice president of JDA Revenue Management, believes there needs to be a culture change within the industry and a shift away from the current ‘reactive’ business model adopted by rail freight companies.
Demand forecasting software developed by JDA helped transform the fortunes of the East Coast Main Line after it returned to public ownership in 2009.
Medapali said he believed the industry was now on the “cusp of a significant discovery”.
He added: “This is the business problem that they have, they have massive investment in rolling stock, the rail tracks in Europe are owned by the government and what they typically do today, and I’m not saying everyone does this, they look at it and see how many wagon loads and how much rolling stock do I need and ask themselves ‘do I have enough capacity’ and they ask that question because they expect freight will show up.”
Figures produced by the European Commission have shown continued growth in rail freight since 2009, with an estimated 389 billion tonne-kilometres in 2010, a rise of 7.9 per cent compared with the previous year.
In 2011, around 18 billion euros was generated in European rail freight revenue.
Great Post Marc. I agree with Anand…there must be a change of strategy and internal culture among railway companies to brighten their future growth. Cultural change and its importance in today’s world has rarely been highlighted and very few businesses are aware about it . Way to go Marc…:)