Search
  • Aivaras Liutvinas

After pandemic - in railways industries

Updated: Apr 29


Today our clients and all world are facing unseen circumstances and we are prepared to help them, with our CargoRail solution. Also, we are eager to fulfill new requirements in CargoRail, which will solve future business challenges.

Our driving force – valuable partnership. For more than 20 years we are working together with clients from railways industries, and providing solutions ahead of time, to solve business impediments or new challenges. That’s why now we are starting a situation analysis and prognosis cycle, to identify tomorrow's business need, and together with you prepare for the future.

Pandemic and isolation brought us to new ways of working, communication, and even leisure. But it marked the economy with slowed economic activity and increased layoffs. We carefully analyzed all incoming data from news sites, analysts, and consultants, to project how our customers and we should transform, to be competitive in future markets. We would like to share what we have gathered, and hopefully get some feedback from you!


General situation

As almost everybody agrees today, every country will be in recession. We are making an educated guess, that economies will shrink by severe scenario, developed by Copenhagen Economics (picture below). As a side note, we are evaluating the impact from governments and the EU, but for now, we believe all initiatives will help only not to deepen the recession, but it’s highly unlikely they will bring back economic activities to a level before the pandemic.

Illustrative path of recovery in the three scenarios
Figure 1. https://www.copenhageneconomics.com/publications/publication/economic-consequences-of-the-covid-19-pandemic

Even than governments or the EU will inject needed funds to compensate companies for stopped economic activities and job losses, economics will not bounce back rapidly, because:

  • By today’s news, not all sanctions will be lifted at day 0, and it would take months to lift all sanctions and to get back to normal.

  • Citizens will be cautious to spend due to increasing job loss and slowing down the economy that will initiate a self-proclaiming cycle of economic downturn.

  • Companies not getting enough orders will decrease their capacities and workforce, adding additional fuel to the economic downturn cycle.

  • Banks and other financial institutions are more careful in lending or investing today, they will be even more careful later, then the recession will hit harder.

But good signs are coming from government initiatives, for example, Japan initiated moving all their production back to Japan[1]. We see the same signs are from the USA. Potentially Europe could follow[2].


Railways freight sector situation

Due to this dramatic shift in spending patterns, the railways freight sector must adapt fast, to work efficiently and profitable.

We divided the freight transportation process into process steps and identified optimization and risk management opportunities in each of them:

  • Contracts and price calculations

  • Orders management and operations planning

  • Shunting operations management

  • Train operations management

  • Waybills and other documentation management

  • Taxes for services calculation and billing

In the next posts, we will analyze every process step in more detail, and show how companies with our solution CargoRail can act now and have less impact from the economic downturn.

If you can please give us feedback if we are lacking some critical parts, or we missed and not correctly identified change opportunities.


[1] https://www-bloomberg-com.cdn.ampproject.org/v/s/www.bloomberg.com/amp/news/articles/2020-04-08/japan-to-fund-firms-to-shift-production-out-of-china?usqp=mq331AQFKAGwASA%3D&amp_js_v=0.1#aoh=15865446875838&referrer=https%3A%2F%2Fwww.google.com&amp_tf=From%20%251%24s&ampshare=https%3A%2F%2Fwww.bloomberg.com%2Fnews%2Farticles%2F2020-04-08%2Fjapan-to-fund-firms-to-shift-production-out-of-china


[2] https://www.reuters.com/article/china-health-france/update-1-france-urges-business-to-rethink-supply-chains-as-coronavirus-hits-asia-idUSL8N2AL3KZ

23 views0 comments