The long and winding road

These are testing times for the transport and distribution sector.

While service this year hasn’t been disrupted by the heavy snowfalls of previous years, customers of rail providers and distribution companies have still found plenty to complain about.

Royal Mail Group, for example, has been experiencing glitches with its website that began before Christmas and have continued into the New Year.

Computerworld UK reports that the problem began when the company migrated online data onto new servers, causing some customers to be overcharged.

Certain services, such as the Royal Mail SmartStamp and Online Postage applications, were “knocked offline over the busy Christmas period”.

Perhaps more worrying for the company is the fact that, according to the Financial Times, TNT, the Royal Mail’s biggest private sector competitor, is planning to go “head-to-head” with its rival, launching its own delivery service for bulk and direct mail.

TNT has piloted the service in Liverpool, and plans to extend it to other parts of the country later this year. If successful, the move will break Royal Mail’s near monopoly of the “final mile” of delivery to homes and offices, the paper reports.

The FT believes that the increased competition will be another headache for Royal Mail, which is due to be privatised in 2013.

Network Railalso has plenty to be concerned about.

The company, which has already pleaded guilty to safety failings over the death of two girls at a level crossing in 2005, is facing criminal prosecution for the 2007 Virgin Trains rail crash at Grayrigg, which killed one person and left another 88 injured.

The FT says that the Office of Rail Regulation, which has begun criminal proceedings, believes that Network Rail has committed a serious breach of health and safety law.

If found guilty, the company could face a fine of £20,000 in the magistrates’ court.

Rail users are increasingly unhappywith the cost of their journeys.

A report in the FT says that fares are rising faster than salaries and that a survey by Passenger Focus found that “the proportion of people satisfied with their rail expenditure fell from 49 to 46 per cent” over a six-month period.

Passenger Focus’s chief executive, Anthony Smith, said, “Train companies and Network Rail must keep up a relentless attention on getting trains on time.”

Satisfaction with individual providers varied: Grand Central, run by Arriva, won the highest rating, while customers of First Capital Connect, run by FirstGroup, were among the least satisfied.

Network Railis also fighting a battle against metal theft, according to the FT. MPs have published a report showing that metal theft on the railways led to 35,000 journeys being delayed or cancelled last year, at a cost of £16m to Network Rail.

“Thieves cashing in on soaring commodity prices – fuelled by demand for metal in emerging economies such as China and Brazil – have created an explosion in thefts over the past 12 months,” the paper says.

These worries haven’t stopped Network Rail from taking a positive outlook for the future, however.

The FT reports that it is in talks with Stagecoach, the operator of South West Trains, to form a joint management team for the franchise, in what the paper describes as “the biggest step towards integrated running of track and trains since the roles were split when British Rail was privatised in the mid-1990s.”

This, and other planned alliances with other train operators, “aim to increase efficiency in the system by means of streamlined decision making, co-ordinated investment planning and aligned incentives,” the paper says.

There is also potentially good news for Network Rail customers from CIO, which reports that the company is to upgrade its entire Cisco switch and router estate across 450 sites.

The multimillion pound, three-year contract has been awarded to O2 Unify for the upgrade.

Although the main aim of the upgrade is to reduce costs, a better telecommunications infrastructure could also improve the efficiency of information services to customers.

FirstGroup is making slow progress in its attempt to reduce its debts. According to the FT, the company is having difficulty selling off its non-core businesses, which the company is blaming on a “weak economy and buyers’ nervousness over regulatory approval.”

Transport providers can expect more challenges in the coming years.

The FT reports on the government’s reform of the UK rail franchising regime, which aims “to attract big foreign operators as part of a shake-up of the UK rail industry.”

In the next three years, more than half of the UK’s 19 franchises will come up for renewal.

Four companies competing to run the west coast mainline have been asked to submit a cost-cutting programme as part of their bid.

Two UK companies, FirstGroup and Virgin Trains, will be pitched against two subsidiaries of foreign state rail groups: Keolis, part of SNCF in France, and Abellio, an arm of Nederlandse Spoorwegen, the Dutch operator.

The franchise, which will run from December 2012 for up to 15 years, is “the first full one to be let since the government promised a shake-up of the rail industry after the McNulty report,” the paper says.

Meanwhile, according to a brief report in CIO, the UK company Arriva is believed to be in talks with SNCF with the aim of negotiating a merger with Keolis ¬– though it’s not clear if, or how, this will affect the Keolis’s status as a foreign operator in bidding for the west coast franchise.

Finally, CIO reports that new business uses continue to be found for the iPad.

After a successful trial in August, British Airways is distributing 2,000 iPads with its new Enhanced Service Platform to senior crew members across its route network.

The new application,designed to improve customer service, will “replace long scrolls of paper that list the passengers on board and provide information such as airline club status, ticket class and special dietary requirements, if any,” the magazine says.

The IT function has been soliciting suggestions for improvements from crew members: “One such improvement now allows crews to tell if there are several employees from the same company on a flight, even if they aren’t sitting together.”

Pic: Lachlancc2.0