Rail Freight Procurement Categories

  • Track – labour (skilled, technical, engineering, and unskilled), signalling equipment, electrification management and support (possible but unlikely, since most of these functions will be provided in-house).
  • Facilities – construction and maintenance of yards and permanent way.
  • Fleet – locomotive and wagon manufacturers (including supplier liaison), maintenance of wagons and locomotives, and stabling of locomotives and track maintenance vehicles.
  • Transport operations – automated (and possibly manual) train formation switches, shunting engines, GPS and RFID technology and management, goods and materials distribution facilities (additional logistics processes involving, for example, forklift trucks, container cranes, warehousing), road vehicles.
  • Fuel – procurement and handling/distribution.
  • Transport support functions (waste management).
  • Products and supplies (IT products and consumables).

Detailed knowledge of the general DB procurement strategy will be valuable, if a supply chain-level understanding of the organisation is sought. Central procurement is likely to generate volume purchase economies, but given the variety of rail systems across Europe, locally-specific locomotives might have several cost/efficiency advantages, such as proximity to the maker’s facilities, local availability of drivers qualified to drive that class of locomotive, low cost of spares, network suitability, and so on. However, from the group perspective, such advantages are likely undermined by the practical difficulties of deploying a highly regional locomotive to elsewhere in the group (in response to sudden requirements for capacity increase, for example).

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