Rail distribution: on the right track?

Rail travel is viewed by many as a means of reducing the environmental impact of corporate travel programmes, yet the ‘bookability’ of long-distance and cross-border journeys is hindered by entrenched distribution processes and operators keen to protect their own interests. Efforts to unravel these complexities are, however, underway.

In one recent development, Swedish rail operator SJ has become the first in Europe to use the EU’s Open Sales and Distribution Model (OSDM) after revamping its distribution platform and pricing landscape in April based on the new standard.

OSDM is just one of a raft of EU initiatives aimed at digitising and streamlining rail ticketing and improving the overall traveller experience, particularly for cross-border rail journeys, as part of a wider push to make rail a more viable alternative to air travel.

And while OSDM hasn’t received the same level of attention as other EU legislative decisions affecting business travel – such as the Corporate Sustainability Reporting Directive (CSRD) and Multimodal Digital Mobility Services (MDMS), for example – could this finally be rail's time to shine?

The OSDM API established a language that allows third-party ticketing retailers and distributors to access rail content or ‘product bricks’ to build combined fares. It covers the full sales process, including timetable search and booking as well as offline data to facilitate post-sales services such as refunds, ticket exchange and special processes to handle delays.

“The end goal is clearly to have all the right players using the standard when selling and distributing tickets through third-parties,” says Emmanuel Mounier, secretary general of advocacy group EU Travel Tech, who added a number of industry players have started to integrate the API into their IT systems and develop new tools based on this language.

Could this be the long-awaited ‘IATA for the rail industry’? Will it help put an end to travel managers’ rail distribution woes?

“It is only a technical tool,” Mounier explains. “You have several aspects in the distribution relationship: the technical terms on which distribution takes place – so, that's really which plug you are using to connect your pipe – and then you have the commercial terms – who is getting is remunerated, at which point, for which services, et cetera.

“This commercial aspect is a very sore point in rail distribution with a clear lack of willingness from rail operators, especially the dominant legacy players, to offer fair terms to distributors,” he continues – and this is not addressed by OSDM.

EU regulation for multimodal travel

The European Commission’s decision earlier this year to open up online rail ticketing in Spain after state-owned operator Renfe was found to have abused its dominant position proved a positive step in the right direction.

Hopes also remain high that the EU’s proposed Multimodal Digital Mobility Services (MDMS) regulation will help solve some of these commercial issues and, ideally, expand rail booking capabilities beyond a single operator’s domestic market to finally enable seamless cross-border ticketing.

Despite advocacy efforts by the likes of EU Travel Tech and BT4Europe to make MDMS  “a greater priority” during the current EU parliament, the initiative has now temporarily been shelved.

Following the EU's June elections, the legislation will need to be addressed by a new set of MEPs and, according to Mounier, MDMS is now more likely to be rolled out between 2027 and 2029 because “that’s the way Brussels works” but equally because “it's a landmark legislation which could really reshape how multimodality operates in Europe… [and] this is a price to pay for good legislation”.

Nevertheless, we could be “positively surprised” if newly-elected MEPs decide to move quickly to push the legalisation forward. “It's a matter of political will, and it has been lacking so far,” says Mounier.

Another EU initiative set to facilitate more cross-border rail travel is the Agreement on Journey Continuation (AJC), which currently includes 18 major rail operators across Europe with the aim of supporting travellers in reaching their final destination.

Governed by the International Rail Transport Committee, the AJC was established to ‘enhance the travel experience’ by ‘complementing’ existing EU Passenger Rights regulation. The agreement is formed on a ‘good-will basis’ and states that if a connecting rail transfer is missed due to a delay or cancellation, travellers are entitled to continue their journey at no additional cost, even if they hold separate tickets for different rail operators.

How does it work? According to the AJC website, all the traveller needs to do is present their original ticket, together with a delay/cancellation confirmation, to railway staff and they will be permitted to board the next available service.

If this sounds too good to be true, that’s because, according to outgoing MEP and rail advocate Jakop Dalunde, there is still a lack of clarity when it comes to passenger rights on European railways.

“The agreement we had in the previous mandate on rail passenger rights [included] some ambitious language, but with a lot of loopholes that enables the railway carrier not to follow it if it’s too tricky or expensive,” Dalunde said during a recent BT4Europe webinar on MDMS.

“However, we have seen improvements with some bilateral agreements between European rail operators. For example, if you travel from Stockholm to Hamburg with SJ, and you have a connecting journey with Deutsche Bahn, since those two [operators] have a bilateral agreement, you’re safe,” he explained.

Critically, however, if a delay or cancellation does interrupt journey plans, Dalunde said the traveller is “required to know” about existing bilateral agreements as they will not be notified of their rights. “We still have a long way to go until [the agreement] is clear and present [in the minds of travellers],” he said.

Fare is fair?

Establishing a level playing field in the rail distribution market is “essential”, insists Andrew Cruttenden, general manager of Trainline Partner Solutions, who also believes MDMS “must be ambitious”.

“It needs to guarantee independent retailers the right to sell rail tickets for fair remuneration and full access to data,” he says.

Equally, the legislation could also prompt changes in TMC fee structures to make selling rail a more feasible option.

Ben Park, GBTA Europe regional chair and executive director of travel and sustainability at clinical research organisation Parexel, says pushing TMCs towards more rail bookings is “unfair” under current commercial models.  

“[TMCs] are not technology companies, so I think it's unfair to ask them to maintain and update many different APIs or direct connects,” he says, adding that, unlike commissions from airlines or GDSs, there is no kickback revenue attached to rail tickets.

And in some parts of Europe, where as much as two-thirds of TMC revenue come from supplier commissions and not from client fees (as is the case in Italy, according to a prominent TMC leader), encouraging an air-to-rail modal shift becomes all the more challenging.

“We need to be able to have a discussion around this,” Park insists. “If rail content is not coming through the GDS as a general pipe – if it's a new API – it's an additional cost [for a TMC] and [there is also] potentially less income outside the direct transaction fee or management fee. So if I want more rail [bookings], I might need to invest in paying my travel agency more.”

Re-tooling for rail

UK-based rail ticketing specialist Trainline’s global API has been held up as a possible solution to content fragmentation, allowing integration with 13 different European carriers through a single portal and, as a result, includes features such as journey stitching and cross-border bookings. The company’s newly upgraded business portal also provides UK-based users with access to split ticketing.

“There’s a real need to simplify some of the complexities that are inherent in rail travel, particularly in the corporate sector,” says Trainline's Cruttenden. “Despite the advancement offered by our global API, TMCs still require separate contractual and licensing agreements from individual carriers,” he explains.

“We're actively working to streamline this process, but we’re also keen to promote to carriers the bigger picture of the opportunities and potential market strength that could be unlocked through creating real partnerships between them, third-party ticket retailers, TMCs, OBTs and GDSs. This has the potential to transform the entire value chain and is in everyone’s interests.”

SAP Concur recently integrated UK rail content into its Concur Travel booking tool via a partnership with Trainline, with a vision to add additional content from across Europe and, ultimately, capabilities for cross-border ticketing.

SAP Concur regional VP, supplier services EMEA, Paul Dear, says growing competition among rail operators in the region means a direct connect strategy “doesn’t work anymore” and that Concur is now embracing “an aggregator strategy”.

“We're looking at this across borders, so as we expand the [Trainline] connection in Europe we can actually talk about countries rather than rail carriers,” says Dear.

Concur is also working with travel emissions specialist Thrust Carbon to integrate carbon emissions data related to rail journeys.

Dear says Thrust’s emissions data is available at the point of sale “so a customer can make a decision now based upon their CO2 emissions” and the team is “currently working” on a comparison function that compares air and rail emissions, including last mile emissions, on the same route.

Amadeus’ Cytric booking tool also features CO2-based sorting and preferencing capabilities and last year rolled out an API integration with sustainability tech start-up eco.mio to ‘gamify’ green travel choices.

The integration is currently only available to customers in Germany, but Graeme Milne, head of corporation sales UK, Ireland & Nordics at Amadeus Cytric Solutions, said this is set to expand with “a lot of interest” from customers outside of Germany.

Air and rail comparisons on domestic routes are capable within Cytric, with rail content feeding through the tool via a mix of direct API connections and aggregators.

However, keeping content up to date and standardising the workflow across multiple operators requires constant investment, says Milne.

“There isn’t an IATA of the rail industry that brings us together... so, for us to continually develop just to keep the content we have is a challenge... but we’re dedicated to making sure we do.”

From a technological viewpoint, Milne says Cytric already has the capability to book and issue a rail ticket from anywhere in the world, with the option for the traveller to change their booking location to take advantage of local market benefits. The challenge to wider industry adoption, he says, is tied up with ticketing accreditation and licensing, which lies under the TMC’s remit.

American Express Global Business Travel was recently granted a licence from the UK’s Rail Delivery Group (RDG) to sell a wider range of UK rail tickets. The licence also gives the TMC responsibility for sales, refunds and customer care. However, Joshua Collier, ground lead at Amex GBT Global Business Consulting, says licensing is “less about content and more about us investing in rail”.

“[It's about] having dialogue with RDG (Rail Delivery Group) and with the government… We want to ensure our voice is heard and without a licence that’s tough,” he says, adding that the biggest challenge for a TMC is not so much access to content, but the ability to stitch multiple journeys together for cross-border ticketing.

“Rail suffers from being quite political,” he says, because state-owned rail operators largely “don’t talk to each other”. While Eurostar’s cross-border services provide “quick wins”, Collier stressed the “missing piece” is air versus rail comparisons across multiple borders and multiple integrations.

“If there were integrations [that made cross-border tickets possible], we would access that and serve that up in a heartbeat,” he said. “It would be a very, very high priority.”

• See also: Air versus rail: Mandating the modal shift – The environmental benefits of rail travel are clear but shifting business travellers from planes to trains is easier said than done