Asset management in uncertain times – acting with foresight rather than ‘running on sight’
Due to the contact and travel restrictions in response to coronavirus, public transport operators face enormous challenges in many respects. Passenger numbers are down by 50 to 90% and this is only one of the initial direct effects with more impacts expected in the area of personnel and resources. This situation, unprecedented in the recent past, is also leading to strategic ‘running on sight’ with regard to asset management in rail infrastructure and rolling stock.
The companies concerned must now discuss the extent to which they need to adapt their maintenance and renewal strategy in these times. The real overriding question here is how long contact restrictions will remain in place and to what extent they will affect public life. But since even experts are currently unable to come up with a definitive answer to this question, infrastructure managers and transport companies should at least consider possible developments and their consequences. We have approached this situation with various scenarios and derived possible courses of action for asset management in terms of opportunities and risks.
In doing so, we have compared the consequences of two possible developments: An early end to the restrictions with a return to normal life from around May. Any minor restrictive measures that may continue must be taken into account. The second scenario is based on the assumption that restrictions will continue in the medium to long term and lead to a longer ‘exceptional situation’, for instance, until August or even much longer.
Scenario 1: Short-term restrictions
Should the safety measures be lifted in a few weeks, the effects are nevertheless expected to continue for some time afterwards. The much lower passenger numbers could recover, but it will probably take a long time before they reach pre-corona figures again (read more about this in the article by our colleague Friedemann Brockmeyer).
Short-term supply bottlenecks for materials from Germany and abroad are also to be expected. The industry is already feeling the effects of this, for example, in the case of certain types of brake pads which are currently not available on the market.
Since the sickness rate is currently quite low, in some cases lower than before, this should not have much of an impact in this scenario at first. However, it should be noted that even after the restrictions have been lifted, staff shortages or quarantine measures are possible.
Scenario 2: Medium to long-term restrictions
In the event of longer-term measures, such as contact restrictions and lock-down, the consequences are much more noticeable. First and foremost, this leads to a permanent decline in passenger numbers which, without public intervention, would also mean a loss of revenue for transport companies.
Resources could become scarce very soon. Both the production and processing of materials and supply chains can no longer be guaranteed or long waiting times must be expected. The personnel situation also remains uncertain. It is difficult to estimate how such a situation will affect the health of employees in the long term. It is possible that the sickness rate will rise.
Options for action
1. Use of additional time slots
In the area of maintenance and renewal, long-term planning is hardly affordable, especially in the second scenario. The goals set cannot be safely backed up with resources and an order backlog would threaten even those areas that are currently less affected. On the other hand, the extent to which infrastructure and vehicles are utilised in some transport operations is reduced since services are also reduced.
The response by public transport to this crisis varies: While in many places the Sunday timetable or an emergency or special timetable is used in local public transport, DB’s long-distance services are only occasionally cancelled. There is therefore an opportunity, especially in local and urban transport, to use additional time slots for work by thinning out services. In terms of infrastructure, this could include extended night-time closures.
The advantage is that these short-term time slots offer immediate added value in both scenarios. The measure would have a preventive effect, since, for example, a higher level of sickness or quarantine measures could be absorbed at a later date, or materials could be ordered at an early stage to bring forward projects before bottlenecks occur in the market. This would make it possible to cope with a standstill in maintenance or renewal for a limited period of time. The greater the scope of work brought forward, the better the company is positioned for both scenarios.
2. Re-prioritisation and rescheduling
Bringing measures forward or postponing them is another conceivable option. Due to the longer lead times required in project planning, this is initially possible to a limited extent only in scenario 1. The ideal situation would be to find out early about longer-term restrictions in public life.
Preferable measures in infrastructure are, in particular, work that involves intervening in heavily frequented sections and which would have restricted the mobility of many people in ‘normal times’ (e.g. sections highly frequented by commuters). Where replacing rail transport with buses was perhaps previously inconceivable, this may now be an option given the current figures. In the same way, a diversion via other frequently used routes could now be an alternative. When it comes to rolling stock, this option concerns planned work on the vehicle fleet, such as retrofitting or minor work that was originally planned for a later date.
Furthermore, consideration should be given to bringing forward such measures, also in the case of when contact and travel restrictions are lifted early, i.e. also in scenario 1. As already mentioned, passenger numbers are expected to remain at a lower level in the medium term. Of course, overcrowded vehicles must be avoided at all cost due to the virus situation.
3. Thinning of transport services
As mentioned above, the response to the decline in passenger numbers has been to reduce services, especially in local transport in most regions. The fact that other transport services continue to be provided with a standard timetable is critical from an economic point of view, not only due to the lack of revenue. Infrastructure and rolling stock continue to be heavily used despite the lower number of transport operations and – taking into account the aforementioned risk of a shortage of resources – there is a risk that maintenance and renewal services can no longer be provided to the necessary extent. Particularly with a view to a point in time when the restrictions in public life are lifted again, there is a risk of downtimes in infrastructure and vehicles, which can only be remedied with delays since resources will not be available. With this in mind, consideration should be given to adapting transport services.
4. Minimum service
In response to scenario 2, i.e. the threat of resource shortfalls in the longer term if passenger numbers remain low, public transport operators should also consider the option of introducing a minimum service. This could mean planning with a much lower traffic volume and adjusted personnel planning with some employees on call. At the same time, in line with the service and the lower vehicle and infrastructure requirements, material would also be kept available – not in the sense of the often quoted hoarding – but to an extent which ensures that a minimum supply can be maintained over a longer period of time despite the loss of resources. The implementation of such a minimum service should at least be ‘shelved’ as an emergency plan and as a response to further developments during the crisis, in order to ensure that public transport can operate, even in the most difficult of times.
There is no clear ‘right’ course of action in this situation. Germany has not experienced anything like this in recent decades, nor is it foreseeable what restrictions we will have to live with in the months to come. In order to reduce short-term ‘running on sight’ during this period of great uncertainty and to be able to make decisions appropriate to the situation, it makes sense to consider various scenarios. They are the best way to present opportunities and risks and at least prepare possible measures. Reducing transport services and filling additional time slots with planned or early measures can have a prophylactic effect and create added value.