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Bus and Motor Coach Library

The Value of Networking...

author - Brian J. Niddery (2004)

 As the bus industry continues its slow but steady rise to more normal market levels, there has been a clear message by industry leaders about the value of networking services, or if you prefer the related concept of working together, or pooling resources. 

Over the last two years almost every major industry leader has at one time or another talked about the benefits of networking.  In essence it is the value of partnering or combining resources to improve the bottom line.  Dale Marsico at CTAA mentioned it in his 2002 "State of the Industry" address in this magazine, again alluding to it in his 2003 address. So has Peter Pantuso of the ABA, Victor Parra at the UMA, and Hank Phillips of the NTA, all of whom at one time or another have preached the value of networking.

The airlines have been pooling resources for decades - particularly on their international routes.  Rather that two competing airlines trying to outsell one another for the same scraps of business, they co-operate. Instead of running two aircraft on the same route, at similar times, they engage in scheduling alternate flights, which they both promote.  The result is that each continues to generate the same revenue, but operate half the number of flights.  The bottom line is twice the gross profit.  When you're talking aircraft that cost upwards of $150-million apiece and maintenance costs to match, you had better believe they work very hard to improve equipment utilization.  

At one time auto dealers tried to locate themselves as far away from their competition as possible, thinking that they are able to compete more successfully.  In recent decades they realized the reverse was true, that the closer they were to one another, the more business was generated.  Today you see automobile plazas with sometimes a dozen or more dealers sharing the same facility.  The result is increased revenues, and reduced costs. In effect they form a retail power center - which brings in greater numbers of buyers, yet reduces individual operating costs. 

In the context of the bus industry, networking might mean sharing risk and revenues between motorcoach operators and the travel trade - travel agencies and/or tour operators.  It may mean getting together with some of your competition and aligning and co-promoting scheduled routes, increasing frequency, or improving schedules. In the case of public or community-based transit services, or special services, it could mean sub-contracting out routes or on-demand services to the private sector, which often can operate those services more efficiently and at less cost.  It could mean several different kinds of transportation services getting together to share premises, garage or terminal facilities, or dispatch services - particularly in situations that require 24-hour dispatch services.   

The value of Networking – It’s a great way to improve efficiencies, and generate more revenues, and reduce your operating costs!