Improved customer focus to accelerate international rail travel | Berenschot.com

Improved customer focus to accelerate international rail travel

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Rails of international train cross each other

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Date

05 May 2022

Reading time

4 minutes

Making structural improvements in international rail travel in Europe requires a comprehensive all-encompassing vision and effective policy that is applied in all member states. The implementation of such a policy will take some time; in the short term, however, there are also opportunities for improving existing cross-border rail links.

The main thing is to coordinate these opportunities and to focus on the options that will persuade travellers to travel abroad by train rather than by car or plane. What are the necessary conditions to start achieving this in the short term?

Night trains as a case study

Night trains have undergone a real renaissance in Europe, after apparently running into the buffers more than five years ago. The Caledonian Sleeper, the London to Scotland night train, is an excellent example of such a night train 2.0: in 2021 it was hailed by the Financial Times as the best sleeper service in Europe. With this train service as an example of a customer-focussed concept that works, at the end of April Berenschot hosted an event to discuss the opportunities for further improving cross-border rail links in the short term. Together with a panel of experts, we investigated how the sector can better shape commercial services to meet and exceed travellers’ expectations.

Sprinkling with glitter

Kaj Mook, Senior managing consultant at Berenschot, spoke about improving international passenger services. He stated that in the improvement of rail services the focus is often long- term which makes for limited progress in developments that are required in the here and now. He added that that’s not because of a lack of opportunity: there is plenty of value to be gained for customers in the short term: a clear understanding of what customers want, followed by tailoring and optimising the service offer to meet those needs. Although current assets and services might be a bit out-dated, adding a careful and consistent ‘sprinkling of glitter’ to the product could make a difference in many areas. For sleeper trains that could be things as hotel-style bed linen and an outstanding breakfast. Yet, this not only applies to the train and the service on board, but also to ticket booking.

Although current assets and services might be a bit out-dated, adding a careful and consistent ‘sprinkling of glitter’ to the product could make a difference in many areas.

The steps towards an even more customer-driven service were further debated in a panel discussion with Karen Letten (European Rail Market Leader at Steer), Kurt Bauer (Head of Long Distance Passenger Services and New Rail Business at ÖBB) and Matt Roche (formerly responsible for Commercial Development at the Serco Caledonian Sleeper franchise ) . This resulted in the following three specific conditions necessary for improvement:

1. Long term certainty about network availability

To be able to expand the rail transport offering, in terms of both quality and quantity, carriers must have a guarantee of attractive routes for a longer period of time. A dedicated timetable for international services, the ability to operate a train at the desired time over the best route, is a key element in the offer made to the customer. Currently, these routes are generally re-allocated on an annual basis, making continuity of services an uncertain factor. If operators were to have more certainty about the timetable they can operate (and thus how they can deploy their rolling stock), this would create a more solid basis for the continued development of the service offer while reducing the level of business risk associated with the necessary investments.

2. More attractive financing opportunities.

Financing would still be an area of concern even if more certainty surrounding the timetable were to reduce the risk of investing in the operation of international trains. The acquisition of new or existing stock is costly, involves long lead times and entails considerable residual-value risks. There are also considerable differences in the creditworthiness of railway companies. This combination leads to greater financing costs or even being unable to obtain funding, which limits the opportunities to invest in a better service and customer offer. (Supra-)national governments could lend a hand in this context, either by cofinancing or by providing guarantees.

3. Effective joint rail lobby

The railway sector could take a more active stance by together organising an effective lobby with an emphasis on capitalising on the opportunities that the European rail network already offers for achieving the goals of the European Green Deal. Influence over future policy will provide a basis for making the above investments by both established parties and new market entrants. At the moment the railway sector is much less effective than other sectors in promoting its interests and influencing new legislation in a way that will help to create the right conditions. The railway sector could look to the example already set by competing modes of transport in Brussels. It’s high time to put aside differences and focus emphatically on the common interest of a vital European railway sector.

Would you like any further information? Please contact Tim Geraerdts or Kaj Mook.

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