The 2015/16 Barometer on Change reflects some key trends emerging across the transport sector, with the three key themes resonating across the sector:
Cost reduction programmes continue to prevail. However, while cost reduction remains a priority in slimming down corporate back-office divisions, and in more general terms for transport operators, the additional cash flow (from, for example, the disposal of non-core assets) is increasingly being used to facilitate growth.
Acquisition and consolidation are achieving economies of scale that will help to position for growth. The growth agenda reinforces a focus on critical challenges, including operational efficiencies for repeat delivery of “commodity” products or services, and harnessing customer data for personalisation of services and revenue “upselling”.
Building delivery capability remains vital, with most organisations seeking to achieve more consistent delivery of infrastructure and change, supported by clearer prioritisation and alignment of initiatives to business plans.
Cost reduction is still a priority for many transport firms, but the focus is changing
Whilst revenue for operators was constrained through the recession, longer term public sector capital investment has generally been protected (albeit with a lower than desired delivery throughput). Existing cost bases continue to be consolidated – not just to protect profit, but to free cash for greater investment in new products and services, or to enhance the quality (operational efficiency or customer value) of those that already exist.
For parts of the market, acquisition and consolidation are key enablers of growth