WITH THE launch of the summer timetable on June 15, NSB abandoned the three marketing brands that it had launched in 1999 - Signatur for long-distance services, Agenda for medium-distance inter-city and Puls for local suburban trains. In future, all operations will revert to the core NSB branding.
The change is just one aspect of a wide-ranging improvement plan designed to ensure that NSB will be able to compete effectively and win future tenders for passenger operations. The two main foci are to improve customer satisfaction and to increase performance by ’thinking profit in everything we do’. Within these two main headings NSB has identified 10 areas for improvement (right), which cover around 30 separate projects of varying sizes.
Over the past two years, NSB has cut its operating costs by NKr300m, and reduced the number of employees by 200 - mostly through a 30% cut in administrative staff. However, falling traffic levels mean that it has been less successful in meeting a targeted NKr200m increase in revenue. Punctuality in 2003 is running at close to best-ever levels, despite a shaky start, and customer satisfaction has started to rise.
NSB’s passenger traffic has been declining slowly since a record in 2000, which was almost 30% higher than the figure recorded two years earlier (Table I). There was inevitably some fallout from the problems in 2000 (p646), but independent research commissioned by NSB suggests that most of the drop has been caused by macroeconomic factors. A downturn in the national economy resulted in a 4% fall in Oslo suburban traffic, accounting for two-thirds of the total loss.
There has also been substantial investment in new roads, and falling oil prices have reduced the cost of private car use in real terms. Express bus operations have been deregulated in the past two years, and together with the advent of low-cost airlines on domestic routes this has hit NSB’s long-distance traffic badly. NSB Communications Manager Audun Tjomsland says the impact of Norwegian Air’s low fares is particularly noticeable on routes from Oslo to Trondheim, Bergen and Stavanger (Table II), but rail traffic is up stongly on the Oslo - Kristiansand route where there is no cheap air competition.
NSB recognises that its own performance has been unsatisfactory in terms of punctuality and passenger information, which has been reflected in low customer satisfaction. In part, the operator believes there has been a lack of political interest in railways, resulting in a much lower level of investment per route-km than other Scandinavian countries. As a result, Norway now has the highest proportion of single-track railway of any European operator.
According to Tjomsland, NSB’s customer satisfaction also was hit by self-inflicted problems. The now-abandoned branding policy led to confusion. ’The brands were supposed to indicate the level and quality of on-train service, but in the public’s view we ended up running different types of train carrying the same branding.’ There were also operating inefficiencies, in that the branded trainsets could not be easily swapped around to cover failures.
Local traffic was badly hit by a decision to cut back on ticket-issuing staff at stations in favour of central booking through a telephone call centre. With JBV responsible for running the stations, NSB could not justify providing staff simply to sell tickets at smaller stations, and cut back from 143 locations in 1996 to just 90. And at some of these sales have been subcontracted to the station newsagent chain Narvesen.
Postal delivery limitations effectively imposed a 48h cut-off for booking via the call centre. When combined with a related decision to impose compulsory reservations on all Signatur trains, which devastated short-hop traffic on the long-distance routes, the policy backfired badly.
Faced with growing competition from air and express bus for the principal end-to-end flows, NSB now recognises that it needs to encourage intermediate journeys on its main lines as well as regional routes. The requirement for advanced reservations was withdrawn on June 15, and passengers joining from unstaffed intermediate stations can once again buy their tickets from a conductor on the train.
Rolling stock strategy
One area excluded from the improvement plan is the purchase of new rolling stock. Over the past five years NSB has ordered four classes of electric and diesel multiple-unit at a total cost of Nkr5bn. In the absence of capital grants, these have been financed by commercial loans, which will be paid off from future revenues and subsidy payments. But no further stock will be ordered until the position over competition and tendering becomes clearer.
Introduction of the new trains has not gone as smoothly as NSB hoped. Most successful have been the 15 Class 93 Talent DMUs built by Bombardier for regional routes. The 15 Class 73 Signatur 200 km/h EMUs, the five similar Class 73B sets fitted out for Agenda duties, and the non-tilting Flytoget Class 71 sets are restricted to 160 km/h following problems with a broken axle in 2000. All the Class 71s have now been cleared for 210 km/h running again after being fitted with new bogies, and the Class 73 and 73B sets will follow.
Delivery of the Class 72 suburban EMUs from AnsaldoBreda (RG 2.01 p113) is currently running two years behind schedule, in part due to the failure of a subcontractor. The first of the 36 sets finally entered service in August 2002, and so far NSB has 11 in traffic - seven on the Stavanger - Jaeren route and four in Oslo, where they will be maintained by Mantena at a new depot in Drammen.
There is no established market for second-hand rolling stock in Norway, although technical compatibility may allow new entrants to use equipment from Sweden. NSB has put the ownership of its existing passenger fleet into a separate business unit within the holding company, able to lease stock to other operators competing against its own passenger business.
Six surplus Class El16 electric locos have recently been sold to Tågkompaniet, which still has the concession for the Sundsvall - Östersund route in Sweden. Ownership of the Class 71 airport express EMUs was vested in Flytoget, and was transferred with the other assets when the subsidiary became independent. CargoNet owns its wagon fleet and freight locos directly.
Looking ahead, NSB is considering whether to start bidding for concessions to operate services elsewhere. This is implicit in the new corporate vision: ’to be the customer’s favourite, and the most innovative transport operator in the Nordic countries’. But Tjomsland admits that ’we need to get our own house in order first, and get used to working in a competitive environment.’
International expansion will depend on whether any attractive tenders are invited, but he does not expect NSB to become a major player outside Norway ’for the foreseeable future’. ’If NSB does decide to expand into foreign markets, it will probably be in alliance with other operators,’ he suggests. For example, the Linx joint venture running inter-city services between Oslo, Stockholm, G