Railways are 'inferior' in the transport market share: Why?

Weaknesses in infrastructure, service quality, travel time, and high ticket prices are causing railways to lose out to aviation and road transport.

While aviation has been growing rapidly and low-cost airlines have attracted a large number of passengers in recent times, railways still have difficulty attracting passengers despite improvements and investments in replacing train car interiors...

Railways are losing ground to their brothers, aviation and road.

Why are passengers not interested in railways? Weaknesses in infrastructure, service quality, travel time, and ticket prices that are not competitive enough are causing the railway industry to lose ground to aviation and road transport. In addition, the thinking about railway development strategies is following a rut. In other words, the railway industry is still "marking time" and is satisfied with what it has done.

At the conference to deploy the 2017 production and business plan of Vietnam Railway Corporation held on the afternoon of January 5, Deputy Minister of Transport Nguyen Ngoc Dong pointed out a series of shortcomings and said: Railways need to change to "lose steam" compared to other types of transport.

Losing absolute "customer" market share

On train SE19 departing Hanoi station at 8:10 pm every day, the highest ticket price for an air-conditioned sleeper is 559,000 VND. A soft air-conditioned seat is 354,000 VND.

According to frequent train passengers, in addition to high ticket prices, the railway industry has invested and changed in recent times but still cannot meet their needs.

Although over the past time, the Vietnam Railway industry has made many efforts to change.

Mr. Nguyen Duc Hung in Dong Hoi, Quang Binh, 68 years old, said that when he was still working, the means of transport he chose number 1 was the train, because of its safety while the travel time was equal to that of the road (about 11-12 hours). In particular, in recent times, the railway industry has made significant changes in service quality and train speed.

However, according to Mr. Hung, now traveling by train is only the second or third choice after air travel and sleeper buses.

“Now, air travel only costs a few hundred thousand and is fast, while by train it still takes a whole night to get to Hanoi or from Hanoi to Quang Binh. If you take a sleeper bus, they will come to pick you up at your house, it is cheaper than the train and you will also be served food,” Mr. Hung analyzed.

In reality, for distances under 300km, passengers still often choose to travel by train even though the ticket price is not cheap compared to other types of travel.

However, with the distance from Hanoi to Ho Chi Minh City, each sleeper on the train costs nearly 1,400,000 VND and takes more than 1.5 days to travel, then you can understand why people now switch to low-cost airlines, because the travel time is only within 4 hours.

“Airlines constantly have 'tricks' to reduce promotional ticket prices on flights. Sometimes, the ticket price is only a few tens of thousands/way, if you include system fees, airport security, payment fees (about 200-300,000 VND/flight), the round-trip ticket price for the flight falls to less than 1 million VND. Meanwhile, a soft seat air-conditioned train ticket costs 700,000-800,000 VND, a sleeper ticket costs around 2,000,000 VND. Therefore, passengers will be wise when choosing to travel by air,” a passenger analyzed.

Struggling to "renew an old shirt"

In recent times, the railway industry has undergone many changes, from service to equipment on trains...

Many people, when entering the station, are surprised to see the signs, the boarding and disembarking areas are raised to the same level as the train floor, making boarding very easy and safe. On the train, the blankets and pillows are clean, the staff are enthusiastic, the food service is complete and the departure and return are basically on time according to the schedule. It is true that the railway industry has been changing its "overly old coat" to accelerate development.

After "4 requests, 4 always", the railway is trying to regain market share in short-distance passenger transport of 300-500 km, which is the industry's advantage.

After "4 requests, 4 always", the railway is trying to regain market share in short-distance passenger transport of 300-500 km, which is the industry's advantage.

“After many years of returning to take the train, I find the service on the train to be relatively good, but the facilities on the train may be satisfactory on some trains but not on others,” said Mr. Nguyen Van Thanh in Quang Binh.

According to the train staff, although the interior equipment has been replaced with new ones, the shells of these train cars were manufactured too long ago and are old, so convenience and cleaning will be very difficult, despite their best efforts.

Mr. Nguyen Hong Son - Train leader SE19 - of the Hanoi Railway Attendants Group said: "We also work very hard and diligently to clean, but in reality it cannot be as clean as a new one, that is the current limitation of the railway industry. Currently, the toilets on the train, although the equipment has been changed, the bad smell has not been completely treated."

According to Vietnam Railway Corporation, the railway profit in 2015 was only 65 billion VND and in 2016 it is expected to increase to 69 billion VND. In particular, Saigon Railway Transport Company - the main unit of the railway industry, but the profit in 2015 was only 5 billion VND and the target for 2016 is to increase to 10 billion VND. Compared to the scale of production, this is a very modest number.

Mr. Tran The Hung - Head of Business Planning Department - Vietnam Railway Corporation said that in the past few years, the passenger transport output of the railway industry has tended to decrease (from 2013 to present) including the distance of 300-500km which is the current optimal distance of passenger transport.

Through analysis, Mr. Hung said that in recent years, the country's economy has been developing, in which the investment of the State and society in road and air transport infrastructure has increased very strongly and created the attraction of car transport services from provinces to national highways as well as domestic air transport for people's travel needs.

Mr. Hung admitted that the advantages of railways in transporting goods and passengers over long distances and with high safety, but the level of convenience for people has not been met, leading to "customers" turning their backs on railways.

“The policy of socializing railways has been implemented for 10 years, but it is only in small packages, mainly investing in upgrading and renovating means of transport, specifically carriages. Currently, state capital investment in railways is very difficult in the general conditions for public investment is very difficult,” Mr. Hung analyzed.

Must change to adapt

According to Mr. Hung, in the coming time, to increase the competitiveness of Vietnam Railways, it is necessary to focus on the strength of railway transport, which is to exploit and serve passengers with a distance of 300-500km. This is the optimal distance for using railway transport today to meet the great travel needs of the people and to remove traffic congestion on the route on peak days.

An expert in the field of transportation analyzed that the railway infrastructure is generally backward. The current railway has no double track, mainly single track with 1 meter gauge (1,000mm, more than 85%), so the throughput capacity and transport capacity are low when no route exceeds 25 pairs of trains/day and night. Meanwhile, for developed countries, the throughput capacity on a single track can reach 40-45 pairs of trains/day and night and on a double track is 200-240 pairs of trains/day and night.

However, this expert also analyzed that when competitors "activate", the railway must change itself to survive.

Knowing that the market will regulate everything, but if the quality is not improved and the price is not reduced, the railway will not be able to attract customers, especially "reclaim" the passenger market share at the distances that are its advantage. Although the railway and the entire transport sector are trying to use administrative measures to regulate the market./.

According to VOV