Rolling stock should be central to the emerging open access rail market

At the heart of open access lies the principle of market competition. Unlike traditional contracted operators, open access operators are granted licenses to operate specific routes without exclusive rights. This fundamental distinction unlocks competition, compelling operators to differentiate themselves through service quality, pricing strategies, and innovation.

When developing their business cases prospective operators need to decide the type of service they want in order to achieve this differentiation which leads directly into the rolling stock strategy. The strategy should link the choice of rolling stock to its target market, intended customer experience, and operating strategy. Within it the biggest question that needs to be answered is whether to procure existing legacy rolling stock or new build.

At a high level the choice often comes down to speed of entry into service (legacy) versus premium branding (new build), as well as the biggest factor, cost. But behind this there needs to be major consideration of areas such as performance (reliability growth and steady state), maintenance (location, cost, supplier choice), carbon footprint and energy performance. There’s also the small matter of compatibility which can often dictate the strategy. If no compatible fleets are available, new build is the only option.

From the passengers’ perspective rolling stock is the simplest way to distinguish between operators. It’s an easy way to stand out if the competing established operator is running legacy rolling stock. If the established operator has a relatively new fleet, more creativity and strategy is needed to stand apart, which was Lumo’s challenge coming up against LNER’s Azuma fleet. Public criticism of the Azuma’s seats is a weak spot in an otherwise fantastic service. This provided Lumo with an opportunity to stand apart, which they did by investing in the very popular FISA Lean seats. Travelling by train between London and Edinburgh is a long, four-hour, journey and knowing that one option has much more comfortable seating than the other may tip the balance.

Balancing costs can often be the biggest challenge for prospective open access operators and can ultimately dictate if the business case stacks up. New builds will hit an operator hardest in lease costs, but in theory they should be cheaper to maintain with lower energy consumption figures. From the manufacturers perspective, smaller fleets don’t bring the economy of scale, which means the capex is often higher than anticipated, unless the fleet can be built on the back of an order for another operator. For legacy fleets, ROSCOs may be uncomfortable leasing a small sub-fleet, particularly if there may be opportunities to lease the full fleet. In such circumstances, the ROSCO may charge a premium for splitting the fleet.

There is clearly no one-size-fits-all answer to the question of legacy versus new-build. It is highly dependent on a multitude of business case parameters which need to be fully understood. This is where the value lies in having an informed technical advisor.