What are significant cost saving ideas for Railway Companies

What are significant cost saving ideas for Railway Companies (transportation industry)?

Solution

World over the railways have played a critical role in mass transportation, carrying high volumes of goods and for meeting essential social needs of the society at large. Railways in many countries have become deregulated and are left to the competitive forces of the market to pave their way to success and in others especially emerging economies and developing countries are still state owned. Even when state owned the governments have realized that to have a sustainable and safe operating system it is necessary to run these efficiently as would be done by private operators.

In the US studies have shown that post deregulation and mergers of railroad companies - these have experienced significant cost savings in their operations. Deregulation primarily allowed the operators to set rates per the market forces and were supported by more conducive procedures for mergers and route abandonment policies.

Indian Railways is one of the largest railway networks in the world. In an age of market forces and sustainability, though government owned their focus is to use their assets for meeting the objectives of mass transportation and carriage of high volumes of goods efficiently and safely. Other modes of transportation in an era of competiton that we live in ensure that the railways use the state of the art technology to cater to customer needs, operations and in maintaining their rolling stocks. The Indian Railways is the largest consumer of electricity in the country - nearly US $ 2 billion annually and that has an annual growth in consumption of around 5%. The railways have focused to make significant savings by using solar and wind energy - up to around 10% of their annual requirement. The equipment for the same would be home grown in line with the government policy of \"Make in India.\" They envisage by this and through better competitive tendering processes to buy a part of their energy requirement would also contribute significantly to the cost saving drive they have undertaken presently.

World over developed countries and developing countries are striving to run this major form of transportation network using the state of the art technologies for better operations and maintenance capabilities and focusing from a business perspective to ensure the entities are business friendly systems, sustainable over the long haul.

Major focus has been to colloborate with partners to create synergies and have innovative ideas to have better strategies and systems for their efficient and reliable operations.