Africa has the potential to maximise its income potential from rail transport, by looking to other income revenue streams not traditionally associated with the industry. Gaurav Agarwal, director of the Ministry of Railways in India, explained how five rail activities that have been adopted in India could boost income for the African rail industry significantly.
Agarwal encouraged Africa to restrategise how they inform their decisions for accumulating the necessary revenue to boost their rail industry profits.
“We need to move from the traditional revenue streams, and focus on the fundamental goals of a business. Most people think revenue is the ultimate goal, but it is in fact the profit. To increase the profit, either increase the revenue, or reduce the costs. This should be the fundamental concept, to sustain any business,” he said
Activities to increase revenue streams
Agarway expressed the need to see railway stations not only as “a place for trains”, but for various business activities; highlighting the need to use stations as retail hubs, and places of leisure, to increase the industry’s revenue streams.
He also mentioned that the industry should introduce more ticketing options. He said by limiting the ticketing options for rail, the industry turns away a lot of revenue simply by not providing the convenience of multimodal ticketing services.
“Stations should incorporate a variety of ticketing and payment methods, otherwise, you are at risk of turning away valuable income form the industry,” he said.
Argarway believes that the rail industry could also benefit from using railway stations and commuter trains as places to market and advertise products.
“There should be efforts from operators, and commercial industries to collaborate and create partnerships that would be beneficial to the rail industry. Visible advertising of products and services can be displayed on the trains, and on the railway buildings. That’s another revenue stream,” he said.
Lastly Argarway concluded by emphasising the need for creating new opportunities to save costs for the industry. He explained the benefits of double stacking containers as a way to decrease fuel costs, and time spent transporting goods. He added however, for double stacking of containers to be successful two conditions had to be met,
- that the train routes were non-electrified, and
- that the freight carried was light weight
He concluded by emphasising the need for innovation in the industry, in order to create new opportunities where the industry strives to tap into new freight customers, and increase the freight base.
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