Rail transportation is the most fuel efficient and environmentally friendly mode of surface transportation. But it is also the most capital-intensive — a fact that cannot be ignored in today's environment of financial volatility and limited credit. Volatility in fuel prices and concerns about carbon emissions have placed demands on both passenger and freight tail services, and hence, infrastructure. Balancing these challenges is the downturn in manufacturing, forestry, and commodities, as freight railways face revenue pressures and decreased cash flows. Given the significant role that rail plays in our economy, railways and governments have recognized the need to invest in rail infrastructure. Also, heightened awareness for public safety provides additional impetus to strengthen railway tracks, equipment, bridges, tunnels and crossings.
There are numerous business concerns that rail companies need to consider when looking to take advantage of this new landscape. Obviously, raising funds for major asset procurement and developing charging mechanisms for clients are chief among them. But your rail company also needs to think about how to develop strategies for managing the transition from the public to private sector, how to improve efficiencies in your operations, and how to manage and resolve disputes that arise during a major capital project.
If you are a freight rail carrier, your concerns today will be on revenue projections and revenue stability, as your customers struggle for growth, or even survival. You will need to consider cash flow, asset utilization, credit risk, and where best to spend your investment dollars in this environment.
How PwC can help
Building on our global experience, our Transportation and Logistics (T&L) practice can help Canada's rail industry address these and numerous other business concerns. We have done a wide range of work on public-private partnerships; we have helped major transportation carriers improve their operational effectiveness; we can help you to raise much-needed capital for your asset procurements; and we can help you determine the best course of strategy to meet your objectives.
Contact us today to see what we can do for your rail company.