Making Rail Work
What are the realities of making rail freight work?
Like all logistics companies, rail freight operating companies are independent, privately owned companies whose responsibility is to shareholders and parent companies. Unlike franchised passenger services, freight operating companies have no public service obligation.
Profitability comes through maximising the utilisation of assets and this is demonstrated through the desire by operating companies to run full length trains where possible to maximise efficiency from locomotives, fixed operational and infrastructure costs.
On a different scale, road freight, sea freight and air freight operators face the same requirements - the need to fill capacity on individual services to maximise efficiency. Traditionally full train business has come from single customers and single commodities. However multi-customer services achieving the same objective are increasingly common, marketed either by the freight operator or third party companies.
How do I integrate rail into my supply chain?
Unless the consignor and consignee are both rail connected there has to be an interface between rail and road, commonly known as transshipment.
Success depends on quick, efficient and cost-effective handling of either intermodal equipment or palletised goods. Cross-docking is a desirable concept familiar to logistics operators and customers, designed to avoid slack and dead time in the supply chain, meaning leaner, more responsive and cost efficient operations. The transshipment of goods from rail to road need be no more complex or daunting than this commonly used process if planned and managed to be integral to the operation.
A more strategic approach to integrate rail into the supply chain is to consider locating warehousing or other processing functions at rail-connected locations. These centres avoid the additional cost of road movement from railhead to warehouse, generating efficiencies in the rail connected supply chain. Naturally these centres should not be a compromise over road only distribution centres so geographic location and excellent road network access is paramount. There is an increasing number of new freight villages being developed for own account operation plus a good selection of private terminal operators able to offer serviced solutions.
Where do rail companies operate?
Freight operating companies are national businesses and as such can service any part of the operational rail network. Actual services and geographic coverage provided by individual companies do vary, based on the requirements of their customer base.
|
