Specialist industries
Concessions, licences and price controls. The trades where a regulator sets what you may charge, a term of years decides how long you have it for, and one…
Concessions, licences and price controls. The trades where a regulator sets what you may charge, a term of years decides how long you have it for, and one published number decides whether you keep it.
- You do not own the railway you run. The track is not yours, the trains are leased and most of the fares are set by a formula. What you own is a term of years and a punctuality figure.
- Buying the path before you have the load. The path is committed in next year's timetable long before the customer commits to you. When one quarry closes, the wagons stand in a siding and the lease carries on.
- A railway laid in a road. A tram cannot divert, cannot grow its catchment and cannot set its own fare. The whole business comes down to one ratio that a council reads once a year.
- Fifty-six days' notice to stop a bus. Register a service and you run it whether anybody boards or not. Stopping takes fifty-six days, and the driver rota decides everything that happens in between.
- The seat that stops existing at the gate. An empty seat is worth nothing the moment the door closes. And the authority can ground an airline for being short of cash, not merely short of maintenance.
- Every hour flown owes the workshop. You sell flying hours. Every hour sold pulls an expensive machine closer to an overhaul nobody invoices for until it arrives all at once.
- Twenty-five minutes on the stand. Ground handling is a service sold in minutes. Bid twenty-five and roster for thirty-five and you have priced a contract you cannot deliver.
- Lane metres, tides and the dry dock. A ferry sells metres of deck, and the sailing list is written round the tide and the dry dock rather than round demand. The ship sails either way.
- The rate is set before breakfast. A shipping line is a price taker on every voyage. The rate moves in months, the charters are fixed in years, and that gap is where lines are lost.
- A hotel with a departure time. A cruise ship is a hotel with a departure time. Everything unsold when the ropes come off is gone for good, and most of the profit is not in the fare.
- A quay only earns with a ship on it. The cranes, the dredging and the payroll all run whether a ship turns up or not. What an empty berth really costs, and how a port loses a weekly service overnight.
- Build the terminal, then find the traffic. The ground, the gantry and the train paths are all paid for before a single customer signs. How an inland terminal earns, and why one retailer usually decides its fate.
- One product, and you may not price it. You own the only way across the estuary and you still cannot put the price up without an inquiry. The oddest monopoly in British business, and how it usually ends.
- Paid for the space in the pipe. Shippers pay for the space in the pipe whether they use it or not, which makes this the steadiest revenue in Britain until the week a field starts to smell of fuel.
- Nobody can leave you. Customers who cannot leave, a price you are not allowed to set, and one published leakage figure that decides how the next five years are going to go.
- Buying forward and selling under a cap. A supplier buys next winter months ahead for customers who can leave in thirty days, then sells at a price Ofgem has already capped. The margin is pennies.
- Homes passed is not homes paying. You can pass three hundred homes in a week and sell nothing. The whole trade is the race between how fast you dig and how many of them ever order.
- Selling kilowatts in a shed. Customers buy kilowatts and a promise, not computing. The binding constraint is never the money: it is the date the network operator offers for the connection.