Friday, August 16, 2013

Mercedes on Country Roads...

Polish Rails: Deficiency can Breed Opportunity

With the high speed access of the internet and all the business done on it one would think that real world transport of actual materials would be dead.  However, one couldn't be farther from the truth.  Whatever you do online, you still need physical objects to help you with your daily needs.  Therefore, the business of moving objects and people is still a very significant sector of the general business environment.  For a country that is predominately flat, one might think it is a easy thing here in Poland. 

A new Toy

That is why one should take the roll-out of the Pendolino trains by the PKP Intercity earlier this week with a huge grain of salt.  PKP advertises that it will get you from Krakow to Warsaw in less than 2.5 hours, 2 hours and 40 minutes from Warsaw to Gdansk, and 3 hours and 30 minutes from Warsaw to Wroclaw.  The current travel time from Krakow to Warsaw is about 3.0 hours on an Intercity Express train with a cost of about 128 PLN or about $40 one way.   The three hour journey time is if everything runs like clockwork.  The fact is that within Poland, the PKP is known for delays and a rather unpleasant experience.  If you ask the man on the street about his experience with PKP, most people will respond with a sigh of discomfort.    While the Pendolino manufactured in Italy can reach the speed of 250 Km/h,   the maximum speed allowed on Polish tracks is 160 Km/h.  

What the media overlooked

While most attention is focused on journeys between Warsaw and other major Polish cities, some should also be paid on journeys between these "auxillary" cities.  For example, the current journey time on the train between Krakow and Wroclaw, two major cities in southern Poland, is about 5.0 hours at the cost of about 50 PLN or $16.  It is much faster to go by bus where it travels on the newly built A4 superhighway.  The journey time takes about a little over 3.0 hours with a cost of about 20 PLN or $6.00.  The reason being that the rail tracks between these two cities cannot handle the speeds that a new train is capable of travelling.  The tracks between Krakow and Katowice is especially bad.  They were built over unstable grounds (due to mining).  In the past, before I discovered the bus possibility, the speed of the train on this leg of the journey was such that I could probably have biked faster than the train.  It also has been said that in the 1920's the train journey took less time. 

Competition for PKP

These days there is much competition for PKP.  There are the regional buses, the PKS, which offer direct service between cities and towns which are relatively close to each other.  There are also privately operated bus lines offering service between major cities.  The most notable is PolskiBus.  They travel on major highways and offer nice comfortable seating with air conditioning and Wi-Fi.  The cost depending on when you book can be incrediblly inexpensive.   A similar journey on the train with comparable comfort is on an Intercity train often costing at least 100 PLN more, and they don't have Wi-Fi. 

What about Cargo?

These days most cargo like furniture and FMCG are transported on trucks between major cities as well as smaller towns.  With major service providers available like DHL, UPS, some private couriers, and Poczta Polska  competiton can get quite intense.  It is enough to give those logistics experts lots of work.  However, there are still much business for the PKP Cargo.  Most raw material such as coal, dry grains, and liquid goods are still transported by rail.  With a bedroom window that faces a train track, I bear first-hand witness to what travels them.  We are in the 21st century, but their operation is still trapped in the time where they use paper and pencil.  For a cargo train car, the information of the cargo and destination is printed on a piece of paper and stored in a open cage-like clipboard attached on the side of the train car open to the elements.  Furtheremore, train cars with cargo have been know to get lost.  Tracking for these cars have been almost non-existent.  With a revenue of over 4.6 billion PLN in 2012, I think major upgrades are long overdue.  Gentlemen, I have four letters for you RFID!    

Gimme a P!   Gimme a K! ......

PKP have made great strides in making the travelling experience of their passengers better.  As a result of their 'ROBI SIĘ!' initiative, main train stations in cities like Katowice, Krakow and Wroclaw have been given much needed renovations and currently work is being done in Poznan and some other cities.    While the Pendolino is a nice new toy to have in your fleet and makes for good publicity and getting international attention.   However, before buying such a nice piece of technology, wouldn't it make sense to have the infrastructure that can really show people what your toy can really do?  There is still much work to be done but I will give you an A for effort. 

A Doctor's Prescription: Lots of Opportunities for Startups

  • An effective e-ticketing system, look at what Ceske Drahy did for their e-shop.
  • Attaching RFID to cargo cars and scanners in each main station for effective tracking of cargo plus the necessary software and hardware to get it done. 
  • Let Deutsche Bahn or SBB from Switzerland take over the operations of the company.

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