Chapter 3 - part 1 Flashcards
Transportation categorised into two groups:
- Infrastructure - facilitates transport, usually govt
- Operations - management of transport, usually private
Rail unique as both usually provided by same entity
How should rail be run and how is it run?
Should be viewed as a service and run as a profit seeking business otherwise situations like PRASA occur. Is seen as a utility and follows political obligation to provide transport at lowest fee/
What are the three sections by which railway costing is categorised?
- Infrastructure network costs
- Train operations
- Corporate overheads
Discuss some infrastructure network costs:
- Capital and maintenance for tracks
- Engineering structures like bridges and tunnels
- Signaling
- Communication systems
- Power supply
- Terminals
70% fixed, 30% variable - varies with traffic use
Define economies of density
Cost savings resulting from spatial proximity of suppliers or providers. The higher the population density, the lower the costs of infrastructure required
Discuss some train operating costs:
- Diesel/electricity
- Locomotive depreciation
- Locomotive maintenance
- Driving crew and on-board crew
- Rolling stock depreciation
- Rolling stock maintenance
- Terminal operations
- Commercial costs
Most variable/traffic usage dependant
Discuss the three strategies that can shift cost/output curve downward for operating costs:
- Greater utility of freight/pax wagons (full loads)
- More time in service (greater hours)
- Larger services (capacity increase)
Define corporate overhead costs:
All overheads that are essential but not directly related to the service - executive management, finance, legal, security
How to lower corporate overhead costs
- Leaner management
- Decentralised decision making
- gradually change the system
Railway cost structures are at their most highly competitive when railways can:
- Operate large trains
- Full loads
- Heavily used network (EOD)
- Lean management
