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Trends such as regulation, sustainability, demographics (growing traffic and ageing population), economics (limited public funding and price sensitivity), mobility and IT innovations are affecting the rail industry, particularly in the European marketplace. As a result, every aspect of the value chain—from passenger service to the back-end organization—is changing.
While operational excellence remains crucial, redefining the client needs and services is key for creating competitive differentiation. Also, other industries including retail, banking and airlines can provide innovative examples that railways could copy.
These mega trends should change the rail industry’s rules of the game in 2020:
Differentiation will play an important role in the face of tough competition.
The carbon footprint of the industry will determine its sustainability.
High unemployment rates and impending financial crisis will make passengers price sensitive. Hence, promotions and low-cost options will become popular.
Scarce public funding will force railways to look for alternative sources of financing.
Speed, mobility and access to better information will be key factors in determining success.
Smarter transportation systems that leverage technology will become increasingly popular.
While these trends should affect the rail industry’s operations, rail players should consider some areas of innovation to be part of the new order:
Companies can lease carriage and wagon equipment rather than purchase them.
Maintenance could be outsourced to other players in order to free up capital.
To increase profitability for stations, rail operators should seek new streams of revenues as well as adopt a franchisee model.
Crew and Fleet Management
Resource smoothing will become a strategic capability for rail operators. Contract labour can be used to leverage cost during seasonal increase and decline of demand.
Railways will need to improve on-board customer service to enforce loyalty and to differentiate from competition. Crew training and detailed customer. knowledge will be crucial leveraging factors.
Stations of the Future
Reducing carbon footprint through use of clean energy and reuse of energy will be high on the agenda of rail operators. Solar energy and body heat harvesting are some ways in which the carbon footprint can be reduced in the future.
Security will be a cause of concern due to increased traffic. Technologies like biometric identification can be used to make rail transport safer.
Redefining Client Services
Geo marketing tools could help to facilitate access to platforms by guiding passengers on their smartphones.
Maintaining connectivity and interaction during a journey can help in enhancing customer experience.
Use of augmented reality to display information about destinations can help provide an improved onboard service.
January 4, 2012
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