CUSTOMER SATISFACTION IN THE RAILWAYS

Transcription

1 CUSTOMER SATISFACTION IN THE RAILWAYS Paper presented at the 9 th Annual Sessions of the Chartered Institute of Transport (Sri Lanka) Amal S. Kumarage Ph.D., MCIT Senior Lecturer, Head Transport Engineering Division, Dept. of Civil Engineering, University of Moratuwa, Moratuwa B.M.I.C.H., Colombo 12 th October, 1996

2 1.INTRODUCTION The demand for railway as in any other mode of transport is a derived demand. That is, journeys are not undertaken for its own end - they are almost always tied up with the demand for food, clothing, employment, recreation, social interaction and so forth. In the early days of transport development, only one or two modes of transport existed for any particular journey. In such a situation, a prospective journey was considered, by its perceived cost, which included safety, fare and time, perhaps in that order. The perils of early sea journeys are well known. Land transport was equally treacherous and unsafe from accidents and bandits. The advent of the railways in the 19 th century provided the desired modal attributes of combining safety, speed and cost. The Railway Era was characterised by track expansion, nation building and stead ridership through till the depression of the 1930's and World War II. Lack of re-investment and the growing auto industry resulted in gradual relegation of the railway in most countries. The primary reason has been the inflexibility of the railway to meet changing consumer demand for both freight and passenger transport. A secondary and perhaps more unfortunate reason has been the response of railway authorities who have refused to make the railway more market oriented. Sri Lanka Railways, wrapped up in bureaucracy of a Government Department, has yet to demonstrate market - responsive rail transport even after 50 years, a period during which its compounded (freight & passenger) transport share has dropped to below 10 percent. 2.IMPLICATIONS OF CHOICE Today our largely market driven economies are run on consumer preference and heavily dependant on packaging and advertising that creates new markets by highlighting attributes sought by an efferversant world. The `instant' and `disposable' product refinement has shown how much the market is willing to pay for that extra-bit of convenience. Decade after decade, added satisfaction has been available to road transport by greater accessibility, faster speeds, comfort, safety and a number of vehicular variations such as motor-cycles, three-wheelers to suit affordability and vehicle size. Comparatively, the railway has been virtually a static entity. In this respect, the railway has proved to be unsatisfactory to its changing customer demands. The railway in most countries looses to road competition in the short-haul and air competition in the long-haul. Its best performances are in the three to five hour ranges and in commuter haulage. Even then, the compounded modal share may be only 25 percent which in todays' multi-modal transport market may be considered a satisfactory modal contribution. Thus the SLR should be looking at doubling its share by catering to the customer satisfaction that is desired of the railways. 3.THE MECHANICS OF CONSUMER CHOICE IN TRANSPORT 1

3 Consumer Choice is best understood in its analysis of utility. Each mode of transport is assumed in its attributes of time, cost, comfort, safety etc. Omnipresence is zero impedance or when each of the undesirable attributes of transport is an absolute minimum. In reality, a consumer attempts at making a choice of a mode based on comparative judgement. Thurstone (1927) was the first to formulate individual consumer choice as such a discriminating process. This process is referred to as the utility maximisation theory or in its application in transport translated as dis-utility minimisation. Domencich and Mc Fadden (1975), Hensher and Johnson (1981) and several other researchers have studied the analysis of transport choice and how patronage varies with the attributes of the service provided, viz-a-viz the competing modes. Based on this, if we consider an individual facing alternatives m = 1, 2,... n with a vector of observed attributes X0. A budget constraint B0 can then be defined as being composed of the vectors X0 and S0 where S0, summarises the socio-economic characteristics of the individual. Therefore, B = X 1,X 2,X 3...X n,s U= f(x,s) U i = α 1 + β 1 t i + β 2 f i + β 3 w i + α 2 and the utility function U can be written as Mode choice models which are calibrated for Sri Lanka have shown utility functions of the type. Where and α1 is the 'captive' ridership for mode i ti is the travel time of mode i fi is the cost of travel by mode i wi is the out-of-vehicle travel time by mode i α2 is the constant indicating the unquantifiable attributes ß's the calibrated coefficients If two competing modes j and k have utilities Uj and Uk, accordingly, the modal share is equal if Uj = Uk. When Uj > Uk we may assume a higher modal share for mode l and so on. The estimated stochastic modal share could be given by a simple logit model: 2

4 M l = exp U l Σ exp U l + exp U K Such a model is a proven tool of investigating the extent of the railway attributes that have resulted in the railway modal share being only 10 percent. More importantly, it is capable of assessing the extent of the consumer dis-satisfaction and the extent of any remedial measures necessary for providing the required satisfaction to obtain a target patronage level. 4.THE ATTRIBUTES OF CONSUMER CHOICE 4.1The ` `Captive' ' Dimension Some modes have a captive patronage. International travel is perhaps the only mode to be almost wholly captivated by airlines. Growing vehicle - ownership is anticipated in Sri Lanka into the foreseeable future, thus reducing the market segment captive to public transport. Thus, future rail policies must be aimed at progressively attracting the car-ownership travellers who will be much harder to satisfy in terms of providing the desired attributes. 4.2Travel Time It has been shown in Kumarage (1990) that travel time is one of the attributes with the largest sensitivity to customer attraction. The SLR is weakest in this particular attribute, as overall train speeds have remained constant viz-a-viz improving road speeds. The SLR does however have a speed advantage in the Greater Colombo area, which it should capitalise on. However, its long distance services should be competitive with proposed expressway speeds estimated at average of km/hr. Another form of increasing travel speeds is by increasing crossing stations and by carefully selecting stopping stations. Each station stop increases travel time by 1-2 minutes to all passengers in the train. It was shown in the study on off-peak train operations in Colombo (UOM, 1994) that stopping to pick-up/drop-off less than 20 passengers is a dis-service! 4.3Fare The railway costs the economy about four times the revenue collection. Cost is a function of productivity, overheads, scale of operation. Price is what the user has to pay. The inclusion of congestion and environmental benefits makes the different between price and cost small enough to persist with the railways. The cross-elasticity between a unit of time and fare now works out to about Rs. 10 per hour for urban passengers and Rs. 16 per hour for long-distance passengers. This highlights the potential recovery of the additional cost that may have to be incurred in providing higher speeds. Studies have shown (UOM, 1991) 3

5 that fare discounts have little effect on increased patronage. Fare subsidies may be continued as a social obligation. Fare differentials are however much more promising in providing a higher priced service for a trip with more desirable attributes. 4.4Quality of Service The quality of service is an increasingly felt attribute in consumer preference in transport choice. The airline industry is one of the most quality conscious transport sectors. Quality of service is measured by booking facilities, luggage facilities, interior design, protection from air, sound pollution and vibration, on-board service, convenience of transfers etc. These are attributes that customers are proven to be attracted to even after passing on the cost of such provisions. The SLR provides four classes of services as shown in the table. For a typical service, it can be seen that the fare differential between 2 nd class and 1 st class does not meet the additional quality desired, particularly since frequency also drops with fewer trains having 1 st class. Furthermore, the distinction between intercity and 1 st and 2 nd class also diminishes in the overall utility consideration. Class/Service Fare Rate Time Rate Seat Frequency Space per Guarantee Rate Seat 3 rd Class No nd Class No st Class Yes Intercity Yes Table 1 : Evaluation of SLR ` `Class' ' Attributes A strong - case may be made for abandoning this rigid `class-system' and having a two tier fare structure based on the following; Economy - Normal Fare Semi - Luxury - Double Fare with Seat Reservation Computerised booking facilities, ticketing `agents', re-furbishing, and quality based service attributes will be essential in competing with quality conscious road based transport. 4

6 4.5Access An inherent deficiency of any railway is in its accessibility. The railway is generally totally dependant on bus services, park and ride systems, walkways etc to provide as much access to train. From the mode choice models the value of access time was found to be about 50% in excess of the perceived cost of travel time. Thus, the highest priority should be given to the access parameter in improving the accessability to rail stations. 4.6Planning & Scheduling Transport routing and scheduling in Sri Lanka are deeply entrenched in tradition. Consequently, they have long since ceased to cater to origin-destination patterns of a growing city or developing country. Some of the most felt needs of the customers would be (a)lack of Directness in Routing. (b)non-uniform Headways (c)inability to provide a given reliability. (d)provide trip planning information. The study on off-peak train scheduling (UOM, 1994) has addressed all these issues. A sample routing for the Greater Colombo area is given in Figure 1, with a uniform headway rail operation headways as shown in Table 2. A sample information guide is also given for trip planning (Table 3). Reliability could be maintained by operating at a stand-by included level and by cancelling one train rather than delaying several. 5.CONCLUSION The railway is a viable transport mode into the next century. It should aim at a 20-25% share of the market. Corresponding investment is necessary for this purpose. However, investment must be carefully made into several key areas of speed, scheduling, routing, access, information, booking systems as shown in this paper. These are identified areas of proven customer preference in mode selection. The ability of the SLR to provide those operational features will result in the attraction of a satisfactory proportion of satisfied customers and thereby halt the present experience of the continuing migration of dis-satisfied customers. 5

7 Table 2 : Proposed Schedule with Existing Fast Passenger Service - Main Line 6

8 Figure 1 : Routing for Colombo 7

9 Table 3 : Sample Rail Information Guide 8

10 6.REFERENCES 1.Thurstone, L.L., (1927), A Law of Comparative Judgement, Psychological Review, Vol. 34, pp Domenchich, T.A. and D. McFadden, 1975, Urban Travel Demand: A Behavioural Analysis, North-Holland, Netherlands. 3.Henscher, D.A. and L.W. Johnson, (1981), Applied Discrete-Choice Modelling, John Witey & Sons, New York, U.S.A. 4.Kumarage, A.S., (1990), Intercity Travel Demand Modelling for Developing Countries, Ph.D. Thesis, University of Calgary, Canada. 5.University of Moratuwa, (1992), Analysis of Value of Travel Time Savings in Sri Lanka. 6.University of Moratuwa, (1991), Colombo City - Study of Travel Characteristics. 7.University of Moratuwa, (1994), Off-Peak Railway Service Improvements Study. 9