The Rail Freight Value Advantage Proposition

In markets that are characterised by commodity provision of rail freight services (perfect or near-perfect substitutability), load capacity/train length and functions beyond speed, both of which are limited by regulations and mechanical factors, non-rail functions (service offerings) will constitute the value-driving, tie-breaking conditions that attract business. Functionality in addition to satisfactory conveyance of freight constitutes a value advantage proposition.

ICT-enabled customer service is such a functionality. DB SR, the rail freight seller, understands customer service and its facilitating technological capabilities as value-driving competitive weapons.  Buyers of rail freight services can harness the advantage of the seller’s customer service, so are able to add value to their own customer offerings. The customer relationship enables service qualities beyond low-price; the functionality represented by technology extends beyond the rail freight provider-freight producer dyad to the freight producer’s customer.

 

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