Wednesday, 24 October 2012

The Industry Disconnect

The race towards containerisation by those rail operators that eventually became today's PN and QRN was to bring efficiency and modality to the industry. Rather than serving customers individually - no matter how many daily carloads they produced - all of their freight could be collected by road and delivered to a container terminal somewhere in the nearest city. Suddenly those turnouts and sidings were no longer needed. Money was saved. It was a win win, right? This isn't going to be a post advocating putting sidings back into every shed and factory and having shunting locos and crews idling day and night to move a couple of carloads - that horse has long bolted. What I'm going to say is that containerisation has produced a grievous disconnect between operators and industry.

For one, trucking that container to and from a rail terminal is frequently the most expensive component of that container's journey. A few too many kilometres or too many truck moves and suddenly that container is cheaper to move the whole way by road. It's a simple rule; once something is on a truck, it's all too easy for it to stay there.

Domestic containers also meant industry no longer needed to have rail access - which means rail options quickly become some ephemeral nether world to the logistics managers trying to get their product from one place to another. The last thirty years has seen hundreds of road-only served industrial estates spring up around the country, all of which are one hundred percent reliant on road options. So this is where containers fail again; they reduce the visibility of rail to industry.

Meanwhile, that 20 or 40-foot container fixes the parameter of those who use them. Rail lost many industries to road during the containerisation process, simply because the container was not a one-size-fits-all. Those businesses that needed specialised rail equipment were simply left to the trucking industry if containers didn't suit them - which is hardly a positive way of generating business rapport. Rail operators became all too used to giving up profitable freight flows just because it didn't suit their transport model anymore - and this in turn feeds into the simple of factor of them-and-us. Containers mean industry and rail operators can cluster around their factories and terminals completely oblivious to the needs of the other. They become completely disconnected, physically and metaphorically. There is no longer any one-on-one contact between rail operators and industry, there is no longer a presence of either in each other's operating world.

So how do we get around this? The easiest would be for rail operators to increase their presence within their potential customer base by using the human factor. More proactive communication and face-to-face contact would be start. Determining better ways of handling and growing each other's business would be even better. In the future rail operators should look upon future terminal developments as including shared space with greenfield industries rather than relying on the current truck to terminal model. And then there's the alternative, where sidings remain, to move containers via rail to business rather than road. I realise those last few kilometres by rail could also be an expensive component of the overall task, but it is up to rail operators to find savings in using lower-cost higher-efficiency local rail service models where labour and motive power costs can be minimised. It might surprise large rail operators just how little more time and effort could go into moving that container from A to B by rail...and more importantly, just how much more traffic such a move might generate. The container is here to stay, so lets use it better.


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