The 31st IRU WORLD Conference: Establishing the Road Transport Network in China

1. The 31st IRU WORLD Conference Establish the Road Transport Network all over China Vice Chairman of China Road Transport Association Board Chairman of National Express Group Wang Yong Li Dr ISTANBUL May 16, 2008

2. The 31st IRU WORLD Conference CLIENT RELATIONS

3. The 31st IRU WORLD Conference The road passenger transport enterprise, belonging to the third pillar industry of modern service, is an economic organization which provides public passenger transport for travellers. The enterprise should improve service quality, transport safety and profits to realize the maximum social and enterprise values. Since its foundation, National Express Group has adhered to the principle and explored the network operation of road transport so as to realize the unification of quality, efficiency and profits.

5. The 31st IRU WORLD Conference NEG PROFILE： The National Express Group is a new-type road transport enterprise which was directly approved for establishment by Ministry of Transport in 2001. Its operational scope mainly includes regular routes of passenger transport, tourist transport, buses, taxi, logistics, vehicle repair and rent services. For the seven years since its foundation, the National Express Group set an objective of becoming the number one of road transport enterprises in China and establishing a national network with focus on inter-provincial road transport.

7. The 31st IRU WORLD Conference By now, the National Express Group has established 60 branches in 14 provinces/cities in the East and Middle Areas of Mainland China, with nearly 6000 vehicles for operation and more than 1000 operational lines. It has established a road transport network covering the East and Middle China and built a large-scale modern road transport enterprises based on the traditional industry.

9. The 31st IRU WORLD Conference NEG is the only road transport enterprise with network operation in China. The network operation is divided into three layers. The first layer is network transport extension. The guiding idea of road transport extension is to realize the “door-to-door” service. The second layer refers to the network service expansion. The expansion of network services means the expansion of routine lines of passenger transport to vehicle hiring passenger transport, tourist transport, taxi, and renting services; the expansion to express transport of small package and less-than-trunk-load express transport and even third-party logistics; and the expansion to safety examination, vehicle maintenance, operation accounting, and information feedback and coordinated evacuation. The third layer refers to the extension of network system. We should not only establish the concept of “big transport” or integrated transport, but should cooperate with other departments or organizations not belonging to the transport sector, so as to provide multiple transport related services to customers.

11. The 31st IRU WORLD Conference The National Express Group provide star-level services for passengers during the whole process of travelling, from the ticket purchase to waiting time to getting-on and off the bus. According to the market requirements, it bought luxury coaches equipped with GPS, airplane chair or bed, VCD, special lights, washrooms, and air conditioning. In the initial period of foundation, the National Express Group did not have its own stations.

13. The 31st IRU WORLD Conference At that time, although there were relatively low service ideas and levels in bus stations in China, the National Express Group cooperated with the bus stations in Tianjin, Cangzhou and Jiangdu and had special zones within these stations as its own bus stations for ticket selling, bus waiting, pick-up and extended services. It unified VI and service standards and provided comfortable and warm services for passengers.

15. The 31st IRU WORLD Conference Bus hostesses reflect the image of passenger transport enterprises. In order to improve the service quality, the National Express Group employed professional service managers from famous hotels in Beijing and a director and air hostess of one air company to recruit and train the bus hostess. Many times, bus hostess of the National Express Group provided services for big events at home and abroad. The Final section of 54th World Miss Competition was held in 2003 in China. The National Express Group sent out a group of servicemen totalling 30 persons to provide travel services for the World Miss in Hainan province, Beijing, Shanghai and Xi’an. The image and professional services of servicemen of the National Express Group really match the beauty of the World Miss and reflect the international level of road transport servicemen of China.

16. 1.新国线员工文艺演出 The art performances of the staff in National Express 2.新国线管理学院揭牌 National Express Management College is unveiled 3.新国线员工业务培训 The professional training to the staff in National Express. 4.非典期间，国家质检总局局长李长江视察新国线 The Director General of General Administration of Quality Supervision China Li Changjiang inspected National Express during the SARS-fighting period.

17. The 31st IRU WORLD Conference The Group has divisions of market promotion and client service. It records the information of clients and improves the loyalty of clients through mark accumulation; it improves continuously service quality though efficient management of client complaints. The service system of the National Express Group has passed the ISO 9000 Quality Certificate and publishes “The Training Material on the Professional Capacity of Bus Hostess” by People’s Communication Press. The book filled gap of training materials for bus hostess in China.

18. 公司还设有市场营销部和客户服务中心，记录客户资料，通过积分管理进一步提高客户的忠诚度；通过对客户投诉的有效管理，持续、改进、提高服务质量。公司还设有市场营销部和客户服务中心，记录客户资料，通过积分管理进一步提高客户的忠诚度；通过对客户投诉的有效管理，持续、改进、提高服务质量。

19. The 31st IRU WORLD Conference BEST COST MANAGEMENT PRACTICES

20. The 31st IRU WORLD Conference Every year road transport consumes 28% of the total amount of oil consumption in China. According to the requirement of establishing energy saving and environmental measures, Ministry of Transport fully recognizes the importance and urgency to promote the energy saving and emission reduction in the transport industry and the development of modern road transport service, thus to facilitate the transition of road transport development from extensive to intensive growth and realize the energy saving and green development of the road transport industry.

21. The 31st IRU WORLD Conference National Express Group adheres to the principle of being market oriented and customer centered and reorganizes the management flow to effectively reduce the management focus and improve the working efficiency. It established a complete evaluation system for the performance efficiency of single vehicle. The evaluation system in Shenzhen company achieved good results. Cost indicators like oil consumption, repair expenses and tyre wearing are reduced accordingly. The oil consumption in 2006 reduced 1.13 liter per hundred kilometers per vehicle, with 3.6% reduction compared with that in 2005. 410,000 Yuan was saved due to oil saving in 2006 and the cost was reduced by 3.9 % not including the factor of oil price rising.

22. The 31st IRU WORLD Conference “Safety means profits” in the transport sector. Besides strengthening education of transport safety and implementing the safety working responsibility, the National Express Group sets GPS and travelling recording equipment on all vehicles and builds the monitoring center to strengthen safety supervision. In addition, the Group establishes and optimizes the vehicle operation safety guarantee system by means of drivers rest, vehicle repair and safety examination.

24. The 31st IRU WORLD Conference The Group has adopted collective purchasing of vehicles, insurances, oil and vehicle accessories and collective disposal of old vehicles and waste accessories, thus to reduce the purchasing cost and raise incomes; it also improves the use efficiency of vehicles to reduce the production cost. Besides the traditional cost management, the Group also holds that innovative transport organization mode is the best way to reduce the cost and improve the efficiency.

25. The 31st IRU WORLD Conference Node transport is a scientific organization way for the distance passenger transport and is one of three important factors during the foundation period of the Group. The Group puts the development of a national network company focused on inter-provincial road transport as its technical embodiment and network operation as its soul for stride development.

26. The 31st IRU WORLD Conference With good results in Jinghu Expressway, the Group also extended the node transport to other lines. Network operation is the core of development strategy of the National Express Group. Network operation could meet the requirements of passenger travelling, and also save the travel capacity resources and cost and improve the transport efficiency. The Group is now making special plans for network operation and exploring a development approach for best benefits in the road transport industry. In 2002, the 8 stations along the Jinghu, occupied 40.45% of the total passenger transport and 33.34% total incomes that year. In 2003, the 8 stations occupied 21.9% of the total passenger transport and 30% of the total income.

27. The 31st IRU WORLD Conference Coach Tourism - the Efficient & Customer-orientated Alternative

28. The 31st IRU WORLD Conference Within the integrated transport system comprised of railways, highway, waterway, aviation and pipeline transport, each transport mode has its own organization pattern, transport routes and vehicles, economic performance and application scope. Compared with other transport modes, road transport has a comparative advantage of broad coverage, high accession and mobility. It is a separate transport mode that plays a role of “big artery” in trunk road transport, and also provide collection and distribution service for other transport modes which plays a role of “micro circulation” through feeder transport. China is a developing country. The per capita GDP is below the average level of developing countries and only one fourth of the world average. Therefore the road passenger transport suits fully the current situations of relatively low economic value and affordability, low consumption level, and large gaps between city and rural areas in China

29. The 31st IRU WORLD Conference coach tourism should avoid effectively avoid the competition with trains and airplanes in some special markets. According to the market requirements, the coach dispatching frequency can be closer and flexibly dispatched; it can also choose time for traveling when there is no train service. In space arrangement, select routines where there is no train service or short travel distance of trains; in terminals of airport, rail stations and port, coach tourism can be connected with other transport modes.

30. The 31st IRU WORLD Conference The transport network has been established in the East seaside areas and the plan of coach tourism was formulated last year. The Group established service production bases in Huangshan Mountain, Sanya, Wutong Mountain, and Guilin, set up branches in cities with high economic development and rich tourism resources, like Beijing, Tianjin, Shanghai, Nanjing, Suzhou and Hangzhou. A new production chain of tourism is established with tourism site as production bases, transport as means and branch companies as the frontier for sale. Taking Huangshan Mountain for example, the Group invested nearly 100 million Yuan to establish the traveller distribution center. For the 13 kilometers from the foot to cable cars, there are special operating coaches of the Group with a good reputation.