Delivering business transformation, crafting business strategy, Visioning the market, EBITDA, Growing profit, Reducing costs, Go-to-market strategy, Differentiation strategy, Cost leadership, Perfect competition, Building distinct capabilities, Building business capabilities, Building Management capabilities, Lasting change management

June 27, 2018

Solve traffic congestion? – less trains, less buses, invest in vision

1.1       Mobility market model with lower structural cost? —

The “federal planbureau” released a study on July 17th, 2008 indicating that both the passengers- and ton-kilometers will aggressively grow with respectively 20% and 68% between 2008 and 2030. About 80% of the passenger transport is done by car, while goods are transported by van and truck for about 71%. As a result the expectations are that a distance of 50 kilometers will require 29% or 32 minutes more of our time on the road. The Brussels employers organisation has calculated the yearly loss in Brussels due to congestion at half a billion € per year. Pushing part of this transport to other modi – such as train, water and bus – seems logic.

Belgium has an extensive railway infrastructure with over 3500 kilometers of railways of which more than 80% is electrified. Yet, even with yearly subventions of over 1 billion € it seems extremely difficult to achieve break-even with 11 billion passenger-kilometers being railed. In fact to make the railcompany a financial viable company it would require more than 0,5 billion € of growth in bottom-line, requiring a 50% growth of passengers’ income and a 25% decrease in operational cost – provided the 1 billion € subventions are kept constant. The ton-kilometers run by train suffer as well from bottom-line although fairly well connected to the harbours but not optimally connected with the hinterland.

About 1,2 billion € is yearly subsidized to run over 15 billion passager-kilometers by bus. Yet we see that less than 15% of the cost is being covered by the passenger.

Roads are being subsidized for about 4,1 Billion € per year to support cars, vans and trucks. Also here we see that the utilisation of this transportation means is in the low percentages, as cars are nearly always parked or are solo-driving in more than 50% of the time.

The overall subventions of over 6,5 billion € do not seem to bring economical and ecological sustainable solutions solving the mobility issues.

Should we reallocate the budget and push traffic off the road onto the train, as well as solo-driving towards car/bus-pooling? Would it be possible to rethink a new mobility market model which has less structural costs and meets high mobility of passengers and goods?



1.2        Shuttling volume on central railroad between hubs —

More than 50% of passenger-kilometers are run on less than 35% of the railway infrastructure (which we can call the “central railroad”). These kilometers are primarily concentrated between Brugghe – Ghent – Aalst – Brussels, Namur – Brussels and Antwerp – Mechelen – Brussels, Charleroi – Brussels. Each of the cities on this “central railroad” are important hubs experiencing more than 60% growth in demand by 2030.

The remaining 50% passenger-kilometers are spread over a “decentral railroad” about double the length of the “central railroad”, serving about 90% of the total amount of cities and villages interconnected by rails. The growth in demand on the decentral railroad by 2030 is half compared to the demand in the hubs mentioned above.

The Belgian government dictates that daily a minimum amount of train-kilometers is run, with a minimum frequency and punctuality in serving all defined stations and stoppoints. Based on this, the railway company derives a set of daily repetitive trajectories meeting these complex expectations, while trying to optimise the ratio of commercial versus total train-kilometers.

Because of these specifications, we see that such trajectories know high(er) yields when trains run from work to home at the evening peak (3 – 7 pm) or from home to work at the morning peak (6 – 9 am), while the yield drops fiercly at all other moments. Of course this results in an overall yield being extremely low (less than 25% occupation).

Suppose, instead of current trajectories, the government requests a high frequent shuttle between Brussels and the main hubs, driving back and forth, being adjusted in length of the train and in frequency of shuttle service (requiring an investment to park overcapacity during trough-periods near hubs). The operational cost would drop significantly, as not only the ratio commercial versus total train-kilometers would significantly increase, but also the yield would reach 50+%.

1.3       Funneling demand with feeders to hubs —

As said, the “decentral railroad” is facing the same demand as the “central railroad” but over double territory and with only half growth potential. Most of the day the demand is much less than 80 passengers per train. The closed bedding of the railway could be converted to run “lower cost” light-rails or more preferably busses. Cost can even be stripped more, as closed beddings could be run without driver or commercial personnel in the near future.

On these feeder-lines to the hubs, more stoppoints could be introduced compared to the current demands of government, as light-rails or busses secure a high average speed even when stopping more frequently. Hub service will need to be aligned with the pattern of demand to allow a 50+% yield (requiring an investment to park overcapacity during trough-periods near hubs).

Local parkings, SMEs and local authority functions could be concentrated around the most important stoppoints, keeping congestion in city centers low, and helping to funnel more transportation demand towards the feeders. On top bus-lines parallel to feeder-lines should be merged.

Bus trajectories which are not economically viable should be abandoned and replaced by more individualised transport such as bike, feet or (self-driving) car.

1.4      Mobility offered —

The average door-to-door speed over a distance of 60 km could be targeted at 60 km/h, being a weighted blend of 70% of 100km/h on the train, 10% of 60 km/h on the metro, 10% of 40 km/h on the bus, 5% of 15 km/h on the bike, and 10 minutes waiting time to switch modi. This would require investments to make sure the switch between modi at the hubs can be done in few minutes.

The passengers should experience a multi-channel selling of a multi-modi mobility pass, where different tariffs are applied depending on the time-of-use, the modus of use and blend of modi used. Given the high(er) frequency of service at peak moments of the day he will experience a relaxed punctual door-to-door service keeping the cars of the road, or promoting car-pooling.

This experience will help to increase the yield of public door-to-door transportation as well as to give the highway back to longer distance transportation (with journeys of 60+km).

1.5       Excess infrastructure —

Not all railway infrastructure will be serving as shuttle or feeder beddings. One could opt to open up (part of) the beddings for cars, vans or trucks.

Those part of railway infrastructure having no economical importance could be turned into a recreational green zone promoting biking, walking, hiking.

1.6      The way forward —

A top down 20-year plan should be created under the governance of a national mobility department. Cities will have to install multi-modal hubs, parkings, stoppoints, SME-zones. Public transportation companies will have to buy new assets to run the feeders and shuttles, while divesting in current transportation infrastructure and rolling assets.

As the overall effect will be that yields rise up to 50+%, demand will grow with more than 50%, the rolling assets will sweat much more than today. On top the overall pressure on the highway and the cities will decrease as a natural shift in modi will occur.

Smart allocation of 6,5 billion € subventions to seamless multi-modi friendly infrastructure, and stimuli to concentrate demand around feeders and hubs will lead towards less trains – less busses – less cars, and leveraged public infrastructure due to less rolling assets with higher yield per modus.

Go back