Article
citation information:
Niedzielski, P., Zioło, M.,
Dyl, K. Wholesale
tariffs in transport as a tool for innovation in the area of tariff and
ticket integration of rail carriers. Scientific
Journal of Silesian University of Technology. Series Transport. 2020, 108, 183-199. ISSN: 0209-3324. DOI: https://doi.org/10.20858/sjsutst.2020.108.15.
Piotr
NIEDZIELSKI[1],
Magdalena ZIOŁO[2],
Krzysztof DYL[3]
WHOLESALE
TARIFFS IN TRANSPORT AS A TOOL FOR INNOVATION IN THE AREA OF TARIFF AND TICKET
INTEGRATION OF RAIL CARRIERS
Summary. The purpose of this article is to identify the
possibility of using the concept of wholesale tariffs as a tool for tariff and
ticket integration of rail carriers, with a view to improving
cost-effectiveness and the reduction of procedural barriers for customers
resulting from lack of tariff integration of rail carriers in Poland. This
article aims to raise the awareness of the concept of wholesale tariffs, which
are successfully used as a tool for tariff integration and competitiveness in
the telecommunications market, and to initiate discussions among professionals
and researchers in the transport sector. The following test methods were used:
synectics, literature review, analysis and synthesis, induction and deduction,
and documentation study. The analyses conducted showed the role of market
regulators in improving cooperation between rail carriers to develop a better
transport offer for rail passenger transport in Poland and, consequently, to
increase the share of passenger transport in this transport sector. Similarly,
it indicated that the concept of wholesale tariffs may also be a revenue
(yield) management tool for rail carriers.
Keywords: transport tariffs, tariff and ticket
integration, innovation in services, revenue (yield) management
1. INTRODUCTION
The market orientation of rail transport in
Poland, which took place following the transition after 1989, led to a number
of changes of different nature. One major change is that there are currently 18
carriers in the Polish market for rail passenger transport services. The main
objective of these changes was to introduce a competitive mechanism between
carriers, which was supposed to result in positive outcomes for
consumers/passengers. Unfortunately, negative effects have resulted from the
lack of coordination and cooperation between carriers. One of the negative
effects in the case of travels using the transport services of different rail
carriers is the need to ‘break’ the tariffs and carry out transport
operations using several tickets issued for each carrier separately. The need
to return tickets and to purchase new tickets, if necessary to change the
carrier, for example, in the event of disruptions to the train traffic, is also
relevant in this context. A solution to this problem is the tariff integration
between certain carriers, mostly in the area of metropolitan or agglomeration
transport.
The share of the abovementioned 18 rail
carriers (situation in 2017, in 2018 there were 14 licensed carriers[4]) in the
Polish market varies and is illustrated in Tab. 1.
Tab. 1
Shares of licensed rail passenger carriers in the
rail passenger market in Poland in terms of number of passengers
|
Carrier |
2015 |
2016 |
2017 |
2018 |
|
Przewozy Regionalne |
27.4% |
27.2% |
26.3% |
26.2% |
|
Koleje Mazowieckie |
22.6% |
20.8% |
20.4% |
19.2% |
|
PKP Intercity |
11.1% |
13.2% |
14.1% |
14.9% |
|
PKP SKM |
14.0% |
14.3% |
13.9% |
13.6% |
|
SKM Warszawa |
9.0% |
8.1% |
7.6% |
6.1% |
|
Koleje Śląskie |
5.7% |
5.2% |
5.2% |
5.5% |
|
Koleje Dolnośląskie |
1.9% |
2.5% |
3.1% |
3.8% |
|
Koleje Wielkopolskie |
2.6% |
2.8% |
2.7% |
3.5% |
|
WKD |
2.7% |
2.4% |
2.6% |
2.8% |
|
Koleje Małopolskie |
0.6% |
1.6% |
1.9% |
2.1% |
|
ŁKA |
0.6% |
0.9% |
1.3% |
1.5% |
|
Arriva RP |
1.5% |
0.8% |
0.80% |
0.7% |
|
UBB |
0.2% |
0.2% |
0.2% |
0.2% |
|
Others |
0.02% |
0.03% |
0.02% |
0.02% |
Source: report on the functioning of the rail
transport market in 2018. The Office of Rail Transport,
Warsaw 2019, p. 26, available at: https:
//utk.gov.pl/pl/raporty-i-analizy/analizy-i-monitoring/statystyka-przewozow-pa/13956,Dane-podstawowe.html
In addition to competition in the provision of services in the rail
passenger segment, which is desirable by consumers, there are also negative
effects on the end customer/passenger. One of these is no option (or limited
options) to travel based on a single ticket on the route served by several
carriers. More so, it is a problem for travellers that tickets of other
carriers are not accepted when travelling on the train of a different carrier
than originally planned by the traveller, who therefore purchased a train
ticket of a specific carrier. This is often the case in the event of
disruptions to train traffic as a result of incidents. The proposed concept of
wholesale tariffs has its roots in telecommunications services and forms part
of organisational and management innovations[5]. The
tariff scheme in transport involves billing charges to end-users (passengers)
and has the form of retail tariffs. The introduction of mandatory wholesale
tariffs for payments between carriers may be one of the tools for the
introduction of a single ticket (a number of other activities exist in this
area, for example, e-ticket, electronic purses, etc.), as well as a solution to
the problems identified above (travel based on a single ticket without the need
to “break” the tariff when several carriers are involved, reducing
the nuisance of transport disruptions through the possibility to travel based
on a ticket issued by a different carrier, etc.). Similarly, the concept of
wholesale tariffs for rail passenger services can become a transport policy
tool and a management tool for stakeholders in this service segment[6].
2. TRANSPORT TARIFF
AS A TOOL FOR PRICE CALCULATION AND COMPETITIVENESS
The transport service, rail inclusive, has a certain value. The concept
of value in economic sciences is widely described; there are a number of
approaches to its identification, including the determination of the transport
service value. On the other hand, prices in transport, fulfil different
functions, the essential ones include:
• revenue generating,
• calculation,
• incentive,
• market equilibrium.
In the
management theories, the following price functions are identified[7]:
·
information
·
redistributive
·
stimulation
(incentive)
·
aggregation
There is, in general, no difference between the indicated price
functions in economic terms or in management terms, since the definition of the
functions in question shows how this function is carried out. An example is an
information function, known also as an information and incentive function in
literature. The price as a parameter makes it possible to determine sales
revenues and encourages specific behaviour of market players/parties. It
informs the buyer how its financial capacity will decrease (demand) in the
event of purchase, while the seller is informed on how its revenue will
increase when the transaction takes place. Thus, the function defined in this
way is included in the profit function, and partially in a calculation
function. Very often, this function (information and incentive) is associated
with the end customer (retail tariff – B2C). In the case of wholesale
tariffs, this function will apply to carriers (B2B), and it can be an
interesting tool to stimulate the competitiveness of rail passenger services as
a whole segment, for example, in comparison with personal motor vehicles. The
corresponding wholesale tariffs in telecommunications are a tool for the market
play of individual operators, including virtual operators[8].
Each of the functions is relevant. However, it should be stressed that
price shaping in the economy is a mechanism to regulate the development of
production and to ensure economic and market equilibrium[9]. The price for a product or service may be
determined based on a number of ways, considering a broad range of
determinants. The tariff-based price settling method is applied for mass and
repetitive acts of purchase and sale[10]. Transport services are mass in
nature, as there are both clients (passengers) represented in large numbers on
the demand side, as well as transport modes and carriers represented in large
numbers on the supply side. The tariff-based prices thus simplify the
conclusion of transactions between the service providers (carriers) and the
recipients (passengers).
Therefore, the tariff is one of the price shaping tools for transport
services. The word “tariff” is derived from Arabic, in which the
word “tarif” means an announcement or a notice. The tariff is
generally associated with systematically arranged lists of prices for goods and
services. The tariff is defined as a price list together with the conditions of
use of these prices, made public in a relevant form[11]. The tariff tool is often used to
calculate prices for services such as telecommunications, electricity supply,
gas supply and a number of other services, including transport services.
Tariff schemes are now often internal in nature because they do not have
to be approved by any state authority. The need to approve selected tariffs is,
in turn, one of the tools of the country’s economic and social policy.
With regard to public transport in cities and agglomerations, shaping the
prices for public mass transport services is part of the city’s policy
implemented by the relevant authorities.
Thus, the concept of a “transport tariff” has, in practice,
a different scope of meaning/interpretation, from very narrow to very broad
one. In the narrow sense, transport tariffs are associated with a table of
transport service charges[12]. In the broader sense, “(...) the
transport tariff is understood as the list of rates (unit prices) for the
provision of certain transport services (carriage and forwarding) officially
made public, as well as a set of rules defining the conditions for the
application of these rates and the way of calculating charges for each
transport service based on those rules[13].” In the broadest sense,
transport tariff means not only a table of charges together with the rules for
calculating them but also a set of rules and regulations governing the
performance of certain transport services (carriage and forwarding). The scope
of the tariffs currently in force has been largely influenced by civil law
relations and economic relations as regards the provision of transport
services, or in broader terms, transport, logistics and insurance services.
Thus, the concept of a “tariff” is often understood in a very
narrow and common sense[14] to be associated with the price list itself.
In
literature, three types of price calculation methods can be distinguished[15]:
·
cost method
(service provider-oriented),
·
demand
method (consumer-oriented),
·
imitation
method (competitor-oriented).
These approaches can be
distinguished to some extent in the tariff development schemes which have been
established in Polish literature. In addition, it should be noted that technical
and technological developments, in particular in IT and telecommunications,
also force/lead developments in the ways of using tariff as a charging tool for
services, including for transport services. Therefore, tariffs may be
constructed in different ways, depending on the needs and specificities of the
particular transport activity, as well as charging/calculation and collecting
technologies.
The current market for mass passenger transport, including rail
passenger transport, is characterised by a relatively large number of licensed
carriers operating in the Polish market,[16] and consequently, a large number of
tariff arrangements. The tariff offers of rail passenger carriers have become a
marketing tool with the purpose of trying to meet the expectations of many
customers as possible in an optimum way and making the offer of a particular
carrier more competitive in view of the changes in customers’ needs and
requirements, as well as their increasing choice of individual means of
transport, or of other competing modes of transport (for example, bus transport
– Flixbus and other carriers). This is illustrated in Tab. 2, which shows
that taking 2000 as the base year (in the 90s, the decrease in the
competitiveness of rail passenger transport was greater than in the 21st
century), the drop in number the of passengers reached almost 30% (2010), and
the drop in transport output expressed as passenger-kilometre reached the level
of 35% (2014).
Tab. 2
Rail
passenger services in Poland
|
Years |
number of
passengers in |
Transport
output |
average distance |
% of passengers Year/year |
% of passengers 200 = 100 % |
% output year/year |
% output 2000 = 100 % |
|
2000 |
360,7 |
24 092 |
66.8 |
100 % |
100 % |
100 % |
100 % |
|
2001 |
332,2 |
22 469 |
67.6 |
92.10 % |
92.10 % |
93.26 % |
93.26 % |
|
2002 |
304,1 |
20 749 |
68.2 |
91.54 % |
84.31 % |
92.35 % |
86.12 % |
|
2003 |
282,5 |
19 382 |
68.6 |
92.90 % |
78.32 % |
93.41 % |
80.45 % |
|
2004 |
271,2 |
18 305 |
67.5 |
96.00 % |
75.19 % |
94.44 % |
75.98 % |
|
2005 |
257,6 |
17 815 |
69.2 |
94.99 % |
71.42 % |
97.32 % |
73.95 % |
|
2006 |
262,6 |
18 299 |
69.7 |
101.94 % |
72.80 % |
102.72 % |
75.95 % |
|
2007 |
278,8 |
19 495 |
69.9 |
106.17 % |
77.29 % |
106.54 % |
80.92 % |
|
2008 |
292,7 |
20 263 |
69.2 |
104.99 % |
81.15 % |
103.94 % |
84.11 % |
|
2009 |
284,1 |
18 692 |
65.8 |
97.06 % |
78.76 % |
92.25 % |
77.59 % |
|
2010 |
262,3 |
17 918 |
68.3 |
92.33 % |
72.72 % |
95.86 % |
74.37 % |
|
2011 |
264,5 |
18 169 |
68.7 |
100.84 % |
73.33 % |
101.40 % |
75.42 % |
|
2012 |
274,4 |
17 866 |
65.1 |
103.74 % |
76.07 % |
98.33 % |
74.16 % |
|
2013 |
270,4 |
16 797 |
62.1 |
98.54 % |
74.97 % |
94.02 % |
69.72 % |
|
2014 |
269,1 |
16 071 |
59.7 |
99.52 % |
74.60 % |
95.68 % |
66.71 % |
|
2015 |
280,3 |
17 443 |
62.2 |
104.16 % |
77.71 % |
108.54 % |
72.40 % |
|
2016 |
292,6 |
19 181 |
65.6 |
104.39 % |
81.12 % |
109.96 % |
79.62 % |
|
2017 |
303,6 |
20 321 |
66.9 |
103.76 % |
84.17 % |
105.94 % |
84.35 % |
Source: authors’ study based on UTK data available at: https: //utk.gov.pl/pl/raporty-i-analizy/analizy-i-monitoring/statystyka-przewozow-pa/13956,Dane-podstawowe.html
An important determinant to stop and reverse a negative trend for the
rail transport to lose its competitiveness in passenger services was to invest
in suprastructure (purchase of modern rolling stock) and in infrastructure
(paradoxically, during modernisation, the quality of service is decreasing due
to limitations and longer travelling time).
New emerging tariff arrangements are intended to allow different tariff
rates to be applied depending on the segment of customers, the length of the
journey, the choice of the distribution channel and a number of other factors.
The implementation of the identified arrangements is currently facilitated
mainly due to the highly developed ICT system[17], which makes it significantly
easier to manage the ticket tariffs in a dynamic way, by the user as well[18].
3. PUBLIC MASS TRANSPORT
TARIFF SCHEMES AS A REVENUE (YIELD) MANAGEMENT TOOL
It should be noted
that prices for transport services in the passenger transport sector are
subject to partial regulation in view of the state’s social and economic
policy, for example, by means of discounts and accessibility arrangements.
Therefore, tariff schemes continue to constitute a general way of setting
prices and presenting them to users. This phenomenon affects directly not only
transport carriers, but usually, transport organisers, that is, local
government authorities, and in particular, the municipalities. The
municipalities, which are responsible for the organisation and financing of
public mass transport, which increasingly have the possibility to use the
tariff scheme understood as a price list for services provided to improve the
pricing system for services rendered to their customers, in particular
residents and visitors/tourists, taking into account the objectives of
municipal policy in different areas, can be a good example. It is in these
schemes that the issue of tariff and ticket integration is most advanced. The
tariff scheme has become a tool to improve the sales and distribution process
of the services provided. It should also be pointed out that an important tool
for shaping competitiveness in transport is to maximise the economies of scale
and network effects by transport carriers[19].
Economies of scale occur when the increase in the volume of transport output is
accompanied by a decrease in the average cost of production. There are several
types of economies of scale in transport[20]:
·
resulting from the
size/capacity of the transport vehicle
(economies of vehicle size),
·
resulting from the
size of the transport carrier, measured by the size of the fleet (transport
fleet) at the disposal of the carrier (economies of fleet size),
·
resulting from the
size of the carrier’s transport network (economies of network size),
·
resulting from the
extension and modernisation of transport infrastructure.
Tariff and ticket
integration of rail passenger transport using the concept of wholesale tariffs
forms part of economies of scale resulting from the size of the carrier’s
transport network (economies of network
size), while stressing that it is necessary to increase coordination of
timetables between carriers[21].
Technological
developments, including in IT and telecommunications, which allow the
processing of significant amounts of data and the automation of customer
service at the stage of contracting and billing, make it possible to observe
the use of tariffs for transport services:
•
as an important
marketing tool,
•
to shape
competitiveness,
•
to make the offer
of a particular carrier more attractive,
•
to make public
transport more appealing;
•
as a policy
component of sustainable development.
In constructing the
billing systems, including for transport services, an approach based on revenue
(yield) management (management of income, management of profits) is
increasingly used – maximising revenues from the sales of services
offered (for example, ticket sales, hotel sales), by making optimal use of the
resources available, at the highest possible unit price of the service, by
determining an optimal price for the transport service that the customer is
able to pay, using the transport vehicle’s capacity to a maximum extent[22].
The concept of YM
(Yield Management) can also be defined as actions taken to control prices and
capabilities in providing services to increase revenues. This is done by
differentiating the prices for the same services for different customer
segments with different price sensitivity and different profitability. In
addition, it is important to stress the lack of possibility to produce services
for stock as well as the simultaneity of production and consumption of the
services, which requires maintaining a certain high capacity that ensures that
services can be provided at peak demand period. Thus, YM, due to price
elasticity, allows to adapt, by means of the price, the demand to the actual
capacity for providing services (market function) and to maximise the use of
the service capacity (rationalisation function), including to customers with
less financial potential. It should be noted that the application of YM
requires certain conditions to be fulfilled, that is[23]:
·
market segmentation
of customers with different price elasticity,
·
no option to resell
or transfer the service between the customers in the same segment or in
different segments
·
the presence of a
market failure mechanism (for example, asymmetry of information).
This concept was
originally designed and implemented in air transport[24]
and, due to positive financial effects achieved[25],
it was quickly adopted in other areas, such as hotel services, car rental, etc.
Revenue (yield) management, owing to technological developments in the area of
telecommunications, the internet, Big Data, and the growing importance of
marketing, including building customer loyalty, is rapidly developing. Important
to observe is the service sectors that implement the concept for price settling
to improve the level of efficiency of the resources held. The concept of yield
management and, as a result, the maximisation of revenue, is implemented based
on managing two key components, that is, the price (price strategy) and the
control of the availability of resources (for example, the occupation of seats
in vehicles, hotels, etc.).
Passenger rail
carriers use to a certain, though limited degree, YM experiences from other
service sectors. It should be noted that the classic approach in the service
sector in this regard was the “last minute” rule, namely the sale
of “goods” (seats in a transport vehicle by the carrier, slots on a
tour by the tour operator, rooms in a hotel). This approach led potential
customers to put off their purchase until the last minute, which in turn
resulted in losses for the service provider and some dissatisfaction with
customers who bought the service earlier at the “full cost”. This
approach was caused by the rationality of the service providers, based on the
principle of “perishable goods” (empty seats in a transport vehicle
or empty rooms in a hotel on the date of travel are “perished
goods”; the closer the time of departure the more perishable the good).
Taking efficiency in the use of available resources as a guiding principle,
which manifests in 100% of the seats sold on a given vehicle or 100% of rooms
booked in a hotel, carriers were ready to sell seats on the same day for any
amount. Such a strategy (“last minute”) at the beginning had a
certain financial impact on service providers, but later on became
counter-productive in terms of attitudes of customers, who increasingly
abstained from early purchases, making it necessary to sell an increasing
number of “spare seats”, which in turn encouraged customers (new
customers) to plan their purchase at the “last minute”. Now the
“first minute” rule is in place, with more discounts offered to
those who buy the service in advance[26].
As the pool of services is decreasing, the discounts are decreasing (prices are
increasing) and, for example, last seats in a transport vehicle are sold at
high prices, as they are likely to have a higher usage value for the customers
than for the rest who have made their transactions earlier at lower prices.
This (“first minute”) strategy makes it possible to optimise the
revenue from the sales of services using service capacity, for example, the
level of occupancy of the transport vehicle.
4. AN OVERVIEW OF THE
WHOLESALE TARIFFS CONCEPT – THEORETICAL CASE STUDY
The concept of wholesale tariffs is linked to the
wholesale market and most often associated with commodity exchanges, for
example, in agriculture. In this context, the wholesale market is “the
market for the purchase of large lots of goods from manufacturers, changes in
the volume of the lots sold and the assortment of goods (sorting, packaging,
composing the assortment of goods) followed by resale to retail stores”[27]. In
considerations of the wholesale transport tariffs, the corresponding
arrangements in the telecommunications services market are taken as a reference
point (benchmark). The “wholesale market (or wholesale capacity) in the
telecommunications sector can be defined as the market where the purchase and
sale of telecommunications resources (such as line capacity, bandwidth, lease
of infrastructure, the PSTN and IP rental) take place in wholesale volumes. The
buyer purchases the services in question to further resell them to the final
recipients (telecommunications operator, an enterprise) or to create new
value-added services. Today, looking at the wholesale telecommunications
markets around the world, the following main institutional arrangements can be
distinguished:
-
carriers’
carrier,
-
online exchange,
minutes/bandwidth exchanges,
-
clearing house.[28]
The concept of wholesale tariffs in telecommunications
is linked to the function of a “clearing house” and serves as the
basis for reciprocal billing between the operators for calls made by their
subscribers. This is shown in Fig. 1.
Due to the fact that there are many telecommunications
operators and different ownership situations of the telecommunications
infrastructure used for connecting the subscribers, there may be many
combinations. This is illustrated in the subsequent illustrative figures.
In the above situation, Subscriber A pays the blue
(host) operator for the service. The blue operator does not pay the wholesale
charge as it owns the whole infrastructure.
Another version of a potential call between
subscribers is shown in Fig. 3.
In this situation, Subscriber A pays the blue
(host) operator for the service. The blue operator pays the green operator for
the use of the infrastructure based on the wholesale price list.
Fig. 1. Wholesale rate as a function of a
“clearing house”
Source: authors’ study
Subscriber A telecommunications
infrastructure
Subscriber B
of the blue operator of
the blue operator
Fig, 2.
Telephone call between two subscribers of the blue operator,
made using the blue operator’s infrastructure
Source: authors’ study
Subscriber A
telecommunications infrastructure
Subscriber B
of the blue operator of the green operator
Fig. 3. Telephone call between two
subscribers of the blue and the green operator using the green operator’s
infrastructure
Source: authors’ study
Another version of a potential call between
subscribers.
Subscriber
A
telecommunications infrastructure Subscriber B
of
the blue operator
of the green operator
Fig. 4. Telephone call from subscriber A of
the blue operator who makes the call to subscriber B of the green operator,
using the blue operator’s infrastructure
Source: authors’ study
In the above situation, Subscriber A pays the blue
(host) operator for the service. The blue operator does not pay the wholesale
charge as it owns the whole infrastructure.
Another version of a potential call between
subscribers is shown in the following Figure.
Subscriber A
telecommunications infrastructure Subscriber B
of the blue operator
of the green operator
Fig. 5. Telephone call from subscriber A of
the blue operator who makes the call to subscriber B of the green operator, in
part using the green operator’s infrastructure
and the blue operator’s infrastructure (host to subscriber A)
Source: authors study
In this situation, Subscriber A pays the blue
(host) operator for the service and the blue operator pays the green operator
for the infrastructure used.
The above figures in a simple and clear manner,
present the idea of wholesale tariffs in telecommunications. The concept of
wholesale tariffs in telecommunications is designed to facilitate payments between
operators.
The idea of wholesale tariffs for rail passenger
carriers will also be applied in a simplified manner. It should be stated that
access to rail infrastructure is necessary in the rail services market
(purchase of train routes from an infrastructure operator, for example, PKP
PLK). There are specific rules in this area and access for both passenger and
freight rail carriers is likewise charged based on the tariff system[29].
The following considerations do not apply to the provision of rail infrastructure,
but to the billing system for passenger transport services provided by
different operators based on a single ticket[30].
As an assumption/simplification, it can be adopted
that trains launched or planned to be launched have a specific capacity (for
example, number of seats), and the purpose of the carrier is to sell the
maximum number of tickets so as to reach 100% occupancy[31].
The level of occupancy does not affect the costs incurred by the carrier (the
carrier is required to operate the scheduled train whether or not it has sold
the tickets for that train). Each ticket sold reduces the total costs of
launching the train and the ticket price does not have to correspond to the
unit cost of the seat on the train.
For the sake of simplification, the following
assumptions will be made: there are 3 rail carriers: the
red carrier, the blue carrier and the green carrier. These carriers offer their
services using part of the common rail network, directly competing for
customers, as well as have “exclusive” rights to provide services
on the part of the network (a natural monopoly can be assumed with other
carriers on these rail routes/sections of routes not being interested in
providing services or not having the capacity to provide transport services on
these sections of the rail network). Each of them offers tickets for their
services and can also sell tickets for services of another carrier, for example,
acting as an agent (which receives a commission on each ticket sold; this is an
established practice since a number of carriers have their points of sale
offering tickets of other rail carriers).
At present, the lack of wholesale tariffs allows
the carrier dealing with the travellers at the point of departure to sell them
two tickets for the journey between the departure station and the terminal
station, that is, the ticket for the blue carrier’s train and the ticket
for the red carrier’s train.
This is shown in Fig. 6 below.
When the passenger is travelling by two trains of
two different carriers (blue and red) based on two tickets (blue and red), the
blue carrier collects the fee for the blue ticket based on the blue
carrier’s fare and that fee fully remains at the blue carrier’s
disposal. The blue carrier collects the fee for the transport service provided
by the red carrier based on the red carrier’s fare and transmits it to
the red carrier, charging it a commission fee for intermediation at the time of
sale. The customer purchasing two tickets has to accept the fact that the
distance is “broken” into smaller sections (with no price reduction
obtained due to the length of the route as in the case of a kilometre-based
degressive tariff). In the event of a larger number of carriers, three in this
instance, the passenger receives three tickets and the tariff is
“broken”. This, to a certain extent, increases the costs of rail
transport and reduces its competitiveness over other modes of transport
alternative to travel the distance between the departure place/station and the
destination/terminal station.
Departure station Connecting
station Terminal
station
Fig. 6. The passenger is travelling by two
trains of two carriers (blue and red)
based on two tickets (blue and red)
Source: authors’ study
If we assume that a wholesale tariff allowing the
carriers to pay directly, for example, for passenger-km, has been agreed
between them, we have the following situation: the passenger purchases the
ticket at the departure station and is served by the blue carrier. The ticket
is bought in line with the fare and conditions of the blue carrier, including
for the train of the red carrier (since part of the journey will take place on
the red carrier’s train). The blue carrier, which collects the fee for
the whole journey, pays the red carrier on the basis of the wholesale tariff. A
similar situation will take place when the passenger is served/checked in by
the red carrier (for example, on the way back). This situation is illustrated
in Fig. 7 below.
Wholesale rate
Departure
station
Connecting
station Terminal
station
Fig. 7. The passenger is travelling by two
trains of two carriers (blue and red)
on the basis of one ticket of the blue carrier is valid for the entire journey
by rail (trains)
Source: authors’ study
More so, it is necessary to look at situations
where the passenger purchases a train ticket, for example, from the red
carrier, for the journey to be made on the trains of the red and the blue
carrier. Due to traffic disruptions (unforeseeable circumstances or objective
reasons), the passenger travels with the green and the blue carrier. This is
shown in Fig. 9 below.
Wholesale rate
Departure
station
Connecting
station Terminal
station
Fig. 8. The passenger is travelling by two
trains of two carriers (red and blue)
given that one ticket of the red carrier is valid for the entire journey by
rail (trains) – payments between carriers on the basis of a wholesale
tariff
Source: authors’ study
Departure
station Connecting
station Terminal
station
Fig. 9. The passenger is travelling by two
trains of two carriers (green and blue)
given that one ticket of the red carrier is valid for the entire journey by
rail (trains)
Source: authors’ study
This situation indicates that the retail charge was
collected by the red carrier who issued the ticket (originally for the journey
on the red carrier’s train, and subsequently, on the blue carrier’s
train). Due to unforeseeable circumstances (objective reasons), it was
necessary to travel on the green carrier’s, and then, on the blue
carrier’s train. The red carrier pays both the green and the blue carrier
on the basis of a wholesale tariff. Furthermore, the red carrier is required to
handle complaint procedures.
Thus, the concept of wholesale tariffs for payments
between carriers is based on the assumption that the ticket for the journey on
the trains of different carriers is issued by the carrier dealing with the
passenger at the time of ticket purchase. This may be at the time of check-in
at the station when buying the ticket via the internet channel or buying the
ticket through an agent (multi-agent). This is shown in Fig. 10 below.
Existing
arrangement
Wholesale
tariff
Fig. 10. The concept of wholesale tariffs as
a clearing house between carriers
versus the existing arrangements for the transport service based on
the trains (connections) of various carriers
Source: authors’ study
It should be noted that in the above considerations,
the train classes of individual carriers were equivalent. The situation
becomes, to some extent, more complicated, if we take into account train
classes. Train classes are reflected in wholesale tariffs, by analogy with the
sale of a single ticket for the trains of different carriers and for different
classes of trains. A number of situations, which may arise, should be included
in the wholesale tariffs scheme.
5. CONCLUSIONS
It seems that there is a creative opportunity to
adapt and make use of the concept of wholesale tariffs in practice as a tool
for tariff and ticket integration in the rail passenger transport sector.
The benefits of applying the concept of wholesale
tariffs include:
- Increased competition of rail passenger
transport due to easier customer service and lower prices of rail tickets
(limited breaking of tariffs).
- Simplification of passenger service in the
event of carrier (train) change (return of tickets, purchase of further
tickets, etc.). The payments take place between the carriers based on
wholesale tariffs. The carrier, which collected the passenger fee is
charged.
- Drawing interest of rail passenger carriers in
using the offer of other carriers, so far perceived as competitors, due to
the economies of scale of the network (I can sell tickets for a different
carrier’s train without providing that connection myself and make a profit
on this) — the coopetition phenomenon.
- More interest of carriers in synchronising
their timetables (I can provide my services to other travellers or another
train will serve my passengers).
- Development of IT systems for the tickets
sales and distribution.
Limitations/threats to the system based
on the concept of wholesale tariffs include:
- No experience in this regard (in rail, however,
there is experience in the telecommunications market).
- Need to mandate the conclusion of wholesale
agreements by passenger rail carriers (role for UTK as the regulator).
Attention should be paid to dominant companies in the rail passenger
market (for example, holding more than a 10% share in passenger services).
- Different standards of carriers’ offers
(especially in terms of quality), for example, metropolitan, long-distance
transport such as TLK (low-cost rail), IC or EC, which should be reflected
in the wholesale tariff design.
- A number of complex unforeseen events of both
objective nature (independent of carriers, for example, force majeure) and
partially attributable to the carrier (for example, locomotive failure).
The concept of wholesale tariffs is successfully
used in the telecommunications market and it is difficult to imagine today that
this market operates without wholesale tariffs and the role of the regulator.
Based on the positive experience in the market for telecommunications services,
it is possible to develop conceptual work on the use of wholesale tariffs for
coordination as well as tariff and ticket integration of rail carriers to
increase the attractiveness of rail passenger services. The concept of
wholesale tariffs for payments between carriers can have a positive impact on
consumers (passengers) and on rail carriers, in the context of shaping the
competitiveness of rail passenger services. Additionally, it should be borne in
mind that this concept presents some risks, particularly for carriers. It is important
to state that this article is purely indicative of the possibility of adapting
wholesale tariffs to the operation of rail passenger transport in Poland for
the purpose of tariff and ticket integration of carriers providing transport
services.
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Received 10.03.2020; accepted in revised form 29.06.2020
Scientific
Journal of Silesian University of Technology. Series Transport is licensed
under a Creative Commons Attribution 4.0 International License