The Influence of the Image of Suppliers on Buyer Behaviour in the Freight Transport Market

Abstract

The freight transport market in the UK has been increasing at a rate of between 1 and 2% p.a. since the mid 1960 a s measured by total ton‐miles and it is worth some £1,500 million annually. The freight business of British Rail, which accounts for approximately 20% of the total market size is of particular importance to the financial viability of the railways as a whole, owing to the fact that freight traditionally has generated about 40% of the revenue of British Rail and difficulty has been experienced in operating it at a sufficiently profitable level to provide for essential re‐investment in the business. This lack of profitability caused consideration to be given to the possibility of withdrawing altogether from the market for freight traffic in less than train‐loads but this was rejected on the grounds that freigh traffic shares assets such as track, signalling, locomotives and manpower with other rail services. A withdrawal from the smaller “wagon load” traffic would reduce traffic by nearly 50% and lead to an under‐utilisation of assets thus weakening overall rail profitability.