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Using analytics to get European rail maintenance on track

Company: McKinsey & Company, Inc. Prague

By harnessing data and analytics, European rail-infrastructure operators can deliver better performance at a lower cost.

By harnessing data and analytics, European rail-infrastructure operators can deliver better performance at a lower cost. The volume of European rail traffic is growing rapidly, making it ever-more important that tracks, signals, and bridges are safe and reliable. The costs of infrastructure maintenance and renewal already exceed €25 billion a year across Europe, and they are rising. Despite this spending, operators are struggling to adequately maintain their assets—resulting in unacceptably frequent delays and cancellations and low levels of satisfaction among rail users.

But there is hope on the horizon. Thanks to the increasing availability and sophistication of advanced analytics, operators have a significant opportunity to create solutions to long-standing maintenance challenges. Harnessing data and analytics could help European rail-infrastructure operators target their maintenance spending more productively.

A pilot study of track segments suggests that operators could reduce maintenance expenditure by up to 30 percent on selected tracks—without compromising current levels of network stability—by reducing overinvestment in less-critical segments. Alternatively, they could improve the stability of their networks at no additional cost by reallocating expenditure to the most critical track segments.

In this article, we highlight the challenges operators face in optimizing maintenance spend amid mounting demand. We also outline a new approach that will enable operators to realize the full potential of analytics solutions and deliver better results for less cost.

Accelerating demand for rail

Rail keeps Europe rolling. Across the European Union, railways transport some nine billion passengers each year—along with 1.6 billion tons of freight.1 And the importance of rail transport continues to grow as networks are modernized, demand increases, and people and governments recognize the advantages of rail over road in terms of speed, safety, and environmental impact.

Europe’s high-speed-rail network has more than doubled in length since 2003, totaling more than 8,400 line kilometers. The volume of passenger traffic has been rising steadily, reaching 450 billion passenger kilometers in 2016—up from 364 billion in 2005.2

The rise of rail is good news for railway-infrastructure operators—but it also increases the pressure to make operations more productive. Rising railway traffic means that infrastructure needs to be in better shape than ever, making maintenance a crucial ingredient in Europe’s mobility, today and in the future. Operators are struggling to find the right balance among lower costs, operational capacity, and necessary maintenance.

A few key figures underline the extent of the challenge. According to a 2018 Eurobarometer survey, only 59 percent of Europeans are satisfied with the punctuality and reliability of passenger trains, and only 66 percent are satisfied with the frequency of trains. On average, one in ten European local and regional passenger train journeys is delayed. Around 2 percent of long-distance, local, and regional journeys are canceled.3

More information here.

Tags: Finance | Transport |

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