Rail companies that specialize in passenger or freight business will face significant challenges and opportunities in the months and years ahead.
The passenger market players are facing rising competition with traditional and non-traditional transport modes, especially in the low-cost segment with flexible offerings. At the same time, freight carriers face continued market fragmentation, price pressure, and the need for ongoing infrastructure upgrades. The winners will be companies that can step up performance, control costs, engage and cement the loyalty of their customers, foster digital innovation, and exceed their customers’ expectations.
The 2015 European Railway Performance Index draws a close link between railway performance and public cost. Specifically, countries that derive the most value from public spending on railway systems also allocate the highest percentage of subsidies to infrastructure managers. But increased public spending alone isn’t enough to achieve top railway performance. Other essentials include:
By obtaining a better understanding of the most effective and transparent models for allocating public subsidies, players can gain valuable insights into what drives European railway performance.
Although not a magic bullet for boosting railway performance, an effective model for allocating subsidies between infrastructure managers and train-operating companies can complement traditional performance-optimization levers.
Read the articleThe advent of autonomous vehicles (AVs) could well affect passenger rail travel as profoundly as did the automobile 125 years ago. BCG urges rail executives to begin strategizing today about how best to confront this looming revolution in passenger transport.
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