How can the industry lower its costs?

[blacknight]

It seems to work well for Merseyrail (and Abellio on the Continent). I've often thought it would be useful to be able to pop into a shop on a station and buy a magazine and my ticket at the same time. Though maybe that's just me.

Read the link & find the ticket office/shop on Merseyrail is actually operated by Merseyrail staff which I dont have a problem with.
What I am opposed to is the idea of tennant like BK McD or Costa selling tickets which then introduces a 2 tier wage stucture for sale of rail tickets on stations.
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What if a member of station staff is the only person on site and the free range NR bods are nowhere to be seen?.

Train stands & waits the arrival of NR staff as there have been instances where TOC's have dismissed station staff for going on to the rails.
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Look at LUL as an example, Station Supervisors are responsible for customer service and safety critical duties. If need be a supervisor can get down on the track, clip and scotch points, remove debris from track, put out fires etc. Sometimes with traction current remaining on. Station assistants can also carry out some of these tasks. Why? because they are well trained and carry licenses for such duties. Most other TOC's will not have their station staff responsible for any such practical duties, because they will not spend the money to train staff up to this high standard[B][/B].

Theres the problem job could be run more effectively but for the cost of training & the station boundary as now been shortened to length of the platforms, heaven forbid you want to use barrow crossing.

 

[Starmill]

You clearly understand economics. It may surprise you to know that there are people in Rail who also understand it, and have done for years. That's why there is the Passenger Demand Forecasting Handbook, which is chock full of data about what changes to rail services and how they affect demand. And yes, people in rail are also aware that rail is part of transport and they know that (for instance) the price of fuel affects the likelihood of using a train rather than a car. And they know that this propensity is different for a journey from Manchester to London than it is from Coventry to Birmingham.

All of this has been known since the days of BR, and yet decisions have been made that fly in the face of your conclusions. That's because these conclusions are not forgone, despite the impression that you try to give. As an economist you must know, for example, of diseconomies of scale. BR suffered from them, and NR suffer from them still. There is no clear cut and obvious answer to bringing down costs.

Haha, unfortunately, I'm not an economist, I'm just a student, trying to apply the theory from text books to real life. Sadly, very little ever turns out the way the theories actually predict, so I doubt it matters.

But it does raise some interesting points; yes, diseconomies of scale are a problem. But the only way to solve that little quandary is to move production to the most productively efficient level, where average costs are lowest. Where's that? Who knows. And how on earth could we find out? And if it were found that the most productively efficient number of passenger kilometers to provide was half of what we currently have, what should be done about it?

Internationally, I've heard that we have outstanding amounts of data about the movements of our population, by rail and otherwise, but my point was, its much easier (although I doubt many firms on the planet would be able to with any real conviction) to measure manufacturing output, and find the minimum efficient scale say, than services.

 

[HH]

Actually you don't need to work out what the optimum number of passenger Km is; what you need to work out is what the optimal organisational setup is. Unfortunately that is no small task. And even if you achieved it, it would have changed within a relatively short time.

So, instead we have to merely settle on trying to improve in every area that we can identify inefficiency and waste. We could start with the government...

 

[455driver]

If need be a supervisor can get down on the track, clip and scotch points, remove debris from track, put out fires etc. Sometimes with traction current remaining on. Station assistants can also carry out some of these tasks. Why? because they are well trained and carry licenses for such duties. Most other TOC's will not have their station staff responsible for any such practical duties, because they will not spend the money to train staff up to this high standard.

So the staff member goes down, clips the points but it isnt just a motor problem and the train derails, who picks the tab up for that?
NR staff would have seen the problem with the point and acted accordingly, platform staff are not.
Who pays to train (and maintain the competencies of) the platform staff.

The underground is one big company, the National network is made up of 30ish different companies all playing the blame game and there is a whole (expensive) industry batting delay minutes around trying to make sure they dont stick to your company.

 

[Lewisham2221]

Scrap all the parliamentary type services or actually put some effort in attempting to make them viable. These things alone must be costing the industry a fortune. To take a couple of my local examples:

London Midland partially subsidises the X1 bus service that serves as the 'rail' service linking Stoke-Wedgewood-Barlaston-Stone-Stafford. We shall assume that Barlaston to Birmingham would be a reasonable 'example' journey. The SDS for this journey is £18.80 - http://brfares.com/#faredetail?orig=BRT&dest=BHM&grpd=0418&rlc= &rte=0&ldn=0&tkt=SDS . The SDS from Stafford to Birmingham is £10.20 - http://brfares.com/#faredetail?orig=STA&dest=BHM&grpd=0418&rlc= &rte=0&ldn=0&tkt=SDS , the bus fare on the X1 from Barlaston to Stafford is between £2 - £3 (I haven't used the service for a while, an all day ticket is only £3.90 in any case). I can imagine how many Barlaston to Birmingham tickets are(n't) being sold! Yet, despite the lack of revenue, money must still be spent on station maintenance and the subsidy of the 'replacement' bus service.

London Midland also partially subsidises the 490 bus, running from Stafford-Norton Bridge-Stone. A large proportion of the users of this service are elderly and disabled and thus entitled to free bus travel. There's obviously nowhere at Norton Bridge to purchase a rail ticket, and a very small number of people travelling from Norton Bridge anyway, the village (hamlet?) is rather on the small side... Yet London Midland still pay towards the running costs of this service. The company I used to work for used to operate this service and I could count on one hand the number of people that boarded the bus with a rail ticket. Some days could count that number with one finger. Other days, I needed somebody to count. Something tells me that the £1.10 rail fare wasn't covering it's costs. Despite this, I received a telephone call one day from the chap at the county council. London Midland had asked us to give them a quote for running a Bank Holiday service on the route. So we did. I forget the exact figure, but it was somewhere between £250 and £350 per Bank Holiday, IIRC. LM agreed to this, and thus we were awarded the contract to run the Bank Holiday service too. I understand that this was funded entirely by LM - the county council aren't in the habit of funding BH services on routes that require subsidy to run M-F daytimes. Again, despite spending ~£300 on a bus service, I can imagine what revenue LM gained from it. Zilch. Zero. Nothing. At a push, £1.10. http://brfares.com/#faredetail?orig=NTB&dest=STA&rlc= &rte=0&ldn=0&tkt=SDS

We may only be talking small sums of money here (I will admit to not having a clue as to how much is spent 'maintaining' Wedgewood, Barlaston and Norton Bridge stations), but surely, whatever the expenditure is, the money could be far, far better spent elsewhere on the network. Yes, there may be red tape, and a lot of it, but keeping stations 'open' just to throw money away surely can't be benefitting anyone?

 

[gimmea50anyday]

Teesside airport. Built too far away from terminal, served by one train a week, yet daily racks up a leccy bill having the platform lights switched on...

And arriva have axed the bus link from Darlington! yup, we really know how to integrate transport in this country.....

 

[Tomnick]

So the staff member goes down, clips the points but it isnt just a motor problem and the train derails, who picks the tab up for that?
NR staff would have seen the problem with the point and acted accordingly, platform staff are not.

I'm not sure - I didn't think MOMs are trained to look for anything other than obvious damage or obstructions when attending a points failure. It's unlikely that the scenario you describe would arise unless the points had been run-through, and someone usually realises when that happens (or is about to happen!); the Rule Book then places restrictions on how the points can be used until they've been properly inspected by the S&T. I don't know who'd pay for the training - it's in everyone's best interests really though, so it'd be nice to think that they could come to an agreement of some sort!

 

[HH]

...the National network is made up of 30ish different companies all playing the blame game and there is a whole (expensive) industry batting delay minutes around trying to make sure they dont stick to your company.

Some companies are already trying to change this; I hope it will go further. Currently the biggest single obstacle to this appears to be NR's legal department, who seem to do nothing other than think up reasons why NR can't work with TOCs to cut costs.

 

[Pumbaa]

Some companies are already trying to change this; I hope it will go further. Currently the biggest single obstacle to this appears to be NR's legal department, who seem to do nothing other than think up reasons why NR can't work with TOCs to cut costs.

I'd say though that they're not 'deliberately' trying to create obstacles though. The relationship between ORR and NR isn't cosy at the best of times, and the legislation with which NR was brought into existence is a) a mess and b) not at all suited to the operation we're running today. Part of NR's remit is ensuring it is compliant, and that's what the legal bods are doing. They then have to ask ORR to sort it out if they want it changed.

Sadly they didn't seem to have much foresight back then, or things would be a whole lot easier.

 

[HH]

I'd say though that they're not 'deliberately' trying to create obstacles though. The relationship between ORR and NR isn't cosy at the best of times, and the legislation with which NR was brought into existence is a) a mess and b) not at all suited to the operation we're running today. Part of NR's remit is ensuring it is compliant, and that's what the legal bods are doing. They then have to ask ORR to sort it out if they want it changed.

Sadly they didn't seem to have much foresight back then, or things would be a whole lot easier.

I realise that there are issues, what I don't like is that it seems to them there's nothing but obstacles. No thoughts on what might be done to overcome them, given the general willingness (on all sides) to move forward on this.

 

[455driver]

it's in everyone's best interests really though, so it'd be nice to think that they could come to an agreement of some sort!

No it isnt.

Why would the TOCs want to get the trains moving?
While they are sat there they are racking up a nice bill to be sent to NR for the delay minutes, it isnt like they are running a service for the public is it, they are running a service to make money and there is a lot of money to be made out of delays.

 

[gimmea50anyday]

Maybe get rid of the 30 or so operating companies all vying to make a profit along with the 100 contractor or service industries all also making a profit out of the subsidy and farebox and perhaps manage with say just 5 regional contracts. Eliminating delay retribution and concentrate on actually providing the service with regional control covering all services in the area not just by individual toc...

Oh, of course we tried that one already. Think it was called British Rail or something like that.....

 

[Tomnick]

No it isnt.

Why would the TOCs want to get the trains moving?
While they are sat there they are racking up a nice bill to be sent to NR for the delay minutes, it isnt like they are running a service for the public is it, they are running a service to make money and there is a lot of money to be made out of delays.

That's a fair point - I suppose I ought to stop trying to apply common sense immediately! It's a sad situations when TOCs are better off incurring heavy delays than trying to work towards resolving the situation.

 

[Oswyntail]

That's a fair point - I suppose I ought to stop trying to apply common sense immediately! It's a sad situations when TOCs are better off incurring heavy delays than trying to work towards resolving the situation.

No it isn't - a healthy dose of cynicism is fair enough, but that is distinctly unhealthy. Unless and until the majority of services are sufficiently delayed to cover the costs from compensation, the TOCs rely on customer perception and experience, just like any other commercial enterprise. Is there any evidence whatsoever to suggest TOCs are "better off"?

 

[Clip]

No it isnt.

Why would the TOCs want to get the trains moving?
While they are sat there they are racking up a nice bill to be sent to NR for the delay minutes, it isnt like they are running a service for the public is it, they are running a service to make money and there is a lot of money to be made out of delays.

Ooohhh you old cynic you

 

[Tomnick]

No it isn't - a healthy dose of cynicism is fair enough, but that is distinctly unhealthy. Unless and until the majority of services are sufficiently delayed to cover the costs from compensation, the TOCs rely on customer perception and experience, just like any other commercial enterprise. Is there any evidence whatsoever to suggest TOCs are "better off"?

In the short term, I can well believe that they're better off with all those delay minutes. Indeed, I once read that the business case for one of the larger FOCs relied on a healthy amount of delays! The longer term view isn't so easily quantified; though I agree that it's important, I doubt the accountants really consider it.

 

[455driver]

Ooohhh you old cynic you

I have to work under these conditions and it really {deleted} me off when a sensible idea is proposed by the people on the ground and it gets thrown in the too difficult pile without any consideration.

Although a few ideas have got past the bean counters (or probably they were kept well away) and some sensible things have taken place using that "where there is no rule forbidding an action it may be carried out using your training" (or however it is written).
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That's a fair point - I suppose I ought to stop trying to apply common sense immediately! It's a sad situations when TOCs are better off incurring heavy delays than trying to work towards resolving the situation.

As for your "common sense" idea, dear oh dear!

which is why this privatised circus doesnt work, too much vested interest in not getting the trains moving.
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In the short term, I can well believe that they're better off with all those delay minutes. Indeed, I once read that the business case for one of the larger FOCs relied on a healthy amount of delays! The longer term view isn't so easily quantified; though I agree that it's important, I doubt the accountants really consider it.

TOCs are only in it for the short term!
Why should they look long term when they only have a 7 year franchise?

Oh just to balance my (rather negative) posts, there are a few rays of co-operation being seen lately, I am keeping my fingers crossed that I am not seeing things!

 

[HH]

In the short term, I can well believe that they're better off with all those delay minutes. Indeed, I once read that the business case for one of the larger FOCs relied on a healthy amount of delays! The longer term view isn't so easily quantified; though I agree that it's important, I doubt the accountants really consider it.

It's a short-sighted approach. Firstly you lose revenue, and part of that revenue stays lost, particularly on InterCity services. Secondly you have to pre-qualify for the franchise next time round. Have crap performance and you don't even get to re-bid.

But even without these solid financial reasons (which the good accountants are fully aware of), TOC people take pride in their work and they don't want badly performing services. I've seen it from the inside in several TOCs and they've all done their absolute best to improve performance, within the constraints they have to work under. They genuinely want to improve performance.

I've not always been convinced that NR have had the same objective - they want to reduce the minutes attributed to them (I think the bonuses depended on it), which is a little different.

 

[Tomnick]

I've no doubt that the majority of TOC staff on the ground and in Control want to keep the job moving as best they can, just as their counterparts in Network Rail want to. It's the constraints that you mention that frustrate both sides, and I'm sure the TOCs (at some level) have as much of an eye on the delay minutes! It nicely links back to the proposal being discussed though - surely more flexibility provided by some TOC staff being competent to carry out certain duties leads to less delay minutes which, in the long term (accepting still that many don't, or can't, see the long term view), is to everyone's benefit?

 

[HH]

I've no doubt that the majority of TOC staff on the ground and in Control want to keep the job moving as best they can, just as their counterparts in Network Rail want to. It's the constraints that you mention that frustrate both sides, and I'm sure the TOCs (at some level) have as much of an eye on the delay minutes! It nicely links back to the proposal being discussed though - surely more flexibility provided by some TOC staff being competent to carry out certain duties leads to less delay minutes which, in the long term (accepting still that many don't, or can't, see the long term view), is to everyone's benefit?

It is and there really are steps being made. It will take time though. I don't think NR's change (back) to Regions helps here - even within NR they are complaining of a rapid switch to "empire building". Those at the top in NR are going to have to be very firm with some of the Regions.

 

[tbtc]

That's a fair point - I suppose I ought to stop trying to apply common sense immediately! It's a sad situations when TOCs are better off incurring heavy delays than trying to work towards resolving the situation.

Does anyone remember the story about GNER's finances suffering when Railtrack improved the ECML (so that the delay repayments to the TOC that they had been banking on came down considerably)?

Or urban myth?

 

[NSEFAN]

GNER's problems were caused by the parent company (Sea Containers) going bust, no?

 

[HH]

Does anyone remember the story about GNER's finances suffering when Railtrack improved the ECML (so that the delay repayments to the TOC that they had been banking on came down considerably)?

Or urban myth?

No, it will be true. Schedule 8 is a broken mechanism which over-compensates in the short term and under-compensates in the long. Everyone who understands it realises this.

 

[Pumbaa]

Does anyone remember the story about GNER's finances suffering when Railtrack improved the ECML (so that the delay repayments to the TOC that they had been banking on came down considerably)?

Or urban myth?

No, it will be true. Schedule 8 is a broken mechanism which over-compensates in the short term and under-compensates in the long. Everyone who understands it realises this.

It is very much true, but truer still, a conflated match of the two. S8 payments dried up as a result of NR getting it's arse in gear, which they were relying on for props as there was no cash in the bank from parent company, as the parent company was in deep doodoo. Without either they couldn't survive. Unfortunate timing really.

 

[Clip]

I have to work under these conditions and it really {deleted} me off when a sensible idea is proposed by the people on the ground and it gets thrown in the too difficult pile without any consideration.

Although a few ideas have got past the bean counters (or probably they were kept well away) and some sensible things have taken place using that "where there is no rule forbidding an action it may be carried out using your training" (or however it is written).

Oh I know its a pain in the neck when you have a good idea that doesnt get taken on. Mind you some ideas that get taken on then get berated by others - platform 9 3/4 trolley anyone

 

[Domeyhead]

"........which is why this privatised circus doesnt work, too much vested interest in not getting the trains moving....."

I absolutely agree with you that the current model has huge flaws and that one of the problems of UK industry is that is more prepared to exploit loopholes for short term benefit than to collaborate on long term remediation. I'm with you on that.
But I do not accept this rose tinted inference that somehow the so called Public Service on the old BR represented a golden age, because that absolutely was not true and there was even less incentivisation then than there is now. BR before privatisation had too many demotivated disenchanted staff, run down stations and rolling stock which were dirty and poor, amenities were poor, innovation where it existed was engineering led, not customer led. Yes there were a huge number of good men working for BR, in both staff and management who kept a service going in difficult conditions and got no thanks and little recognition, but the one and only problem for the passenger on today's railway is cost. Punctuality and service frequency are much better than the 1980s.
Apart from the loss of one or two very minor BR services (Red Star parcels, Motorail etc etc it is cost ( and perhaps ticketing complexity) that marks today's passenger experience as as significantly inferior to the 1980s product.
Remember this thread should consider the passenger's experience, not just the staff's. In your posts I'm not sure you have ever mentioned the passenger even once.

 

[chuckles1066]

I have posted here on (probably far too) many occasions......stop fare dodging such as the sort that goes on at Filton AbbeyWood.

You're missing hundreds of individual ticket revenues per day and that's just a single station.

I don't know how else I can put it - black and white line drawings maybe?

 

[Dave1987]

Passengers my slate privatisation because they are told by the media and a few national newspapers in particular that TOC's are making huge profits for their shareholders and its a line Bob Crow is particularly keen on using. But privatisation has huge benefits for the passenger. TOC's are obliged to keep to their franchise commitments or suffer financial penalty, they have to keep their ppm up, and a lot offer compensation if you are significantly delayed. Who says if the railways was renationalised that this wouldn't get worse? The grass is always greener on the other side, I think the fundamental facts are that the railway infrastructure and new trains cost huge sums of money. One thing that the country is distinctly lacking in at the moment. I think there should be more chiltern style long franchises to give companies a reason to put decent amounts of their own money into making improvements. That's the key for making the railway a more enjoyable experience for the passenger.

 

[blacknight]

Passengers my slate privatisation because they are told by the media and a few national newspapers in particular that TOC's are making huge profits for their shareholders and its a line Bob Crow is particularly keen on using. But privatisation has huge benefits for the passenger. TOC's are obliged to keep to their franchise commitments or suffer financial penalty, they have to keep their ppm up, and a lot offer compensation if you are significantly delayed.

Financial Penalties?Like National Express did when they handed in the the keys to DfT for ECML franchise, which now strangely under nonimal state control is making direct payments to DfT of millions of £££s after running costs are deducted & only shareholder is the tax payer.

 

[HH]

Financial Penalties?Like National Express did when they handed in the the keys to DfT for ECML franchise, which now strangely under nonimal state control is making direct payments to DfT of millions of £££s after running costs are deducted & only shareholder is the tax payer.

*sighs* You're muddling several things here. The penalties mentioned here are applicable to all TOCs if they fail to achieve certain targets, or do not deliver commitments on time.

The penalty NX paid to DfT when it handed the keys back wasn't a penalty at all, it's the bond they put up when they took on the franchise, and was there for just such an eventuality.

NX were paying £m to the DfT at the time they handed the keys back. It's just that the £s they'd promised to pay were too high for them to keep paying - far higher than EC are currently paying.

To sum up, your comment is wrong on several fronts.