Rail freight is thriving in large countries like the United States, Canada, Russia and India with healthy market shares. “Rail has a 33% market share in the United States, 30% in India and 80% in Russia,” Mr Renato Mazzoncini, CEO of Italian State Railways and UIC chairman, told delegates in Genoa. In contrast, he pointed out that rail’s share of the European freight market is just 11-12%, well short of the European Union’s ambition to reach 30% by 2030.
Rail freight has a natural advantage in large countries. Distances are great, which gives rail a real competitive edge over road as the volumes are so high that the railways can operate extremely long trains very efficiently. In addition, India and Russia both have poorly developed road networks and road haulage industries to the benefit of rail. Most of North American rail freight is carried by seven big Class 1 railways, supported by a plethora of regional and short-line operators. In Russia and India, the infrastructure is managed by one entity: Russian Railways (RZD) and Indian Railways (IR).
Conditions in Europe are very different. Distances are short and the infrastructure is managed nationally to different standards and with access charges that vary widely from country to country. Train lengths are severely restricted: the dream in Europe is to achieve 750m-long trains as a standard, but we are a long way off realising that. “It is absolutely impossible to manage rail freight if the infrastructure is not good,” says Mazzoncini. Added to this, European freight wagons still rely on manual coupling which makes rail freight labour intensive.
“The vision is that running a freight train through Europe should be as easy as driving a truck,” Mr Clemens Först, CEO, Rail Cargo Group, Austria, and chairman of the UIC’s Freight Forum, says. “But, we need to involve six railways to introduce a freight service from Germany to Turkey, and this costs €500,000 per country and takes two years to organise. The first pillar of change is to become more productive, and digitalisation gives us the means to do this.”
Mr Paul Mazataud, European director with France’s infrastructure manager, SNCF Network, says it is possible to implement hard and soft measures to improve rail freight’s competitive position. The problem is that hard measures, namely upgrading infrastructure, are very expensive. “The age of infrastructure is very high, more than 30 years in some European countries, but it costs e2m to renew 1km of line,” he points out.
“We are investing more and more in intangible measures such as digitalisation,” Mazataud says. “They are much less costly, and there are a lot of improvements we can make in a relatively short space of time. I believe soft measures such as capacity management and timetabling, are more sustainable than investing in new lines or major upgrades.”
In a similar vein, Prorail, Netherlands, has decided to become the first European infrastructure manager to align its track access charges with a neighbouring country, namely Germany. Rotterdam is Europe’s largest port and its rail connections to Germany are vital for its continued success.
The Netherlands is also taking its first steps towards introducing autonomous trains. “In the second half of this year we will undertake some experiments with self-driving freight and passenger trains,” says Prorail president and CEO, Mr Pier Eringa. “We also need to implement ERTMS as this will shift intelligence from the track to the train.”
One problem facing rail freight is that European governments still think and act nationally despite the existence of the EU. “We have to challenge our government to think about international issues and not just national ones,” Eringa says. “We have to develop a hub and spoke system in Europe to become stronger - not every city can have a direct link to China.
“Our biggest problem in rail is our DNA,” Eringa adds. “We need to move from talking to execution.”
There needs to be a greater sense of urgency.
“I don’t believe that rail can grow its market share - it will go down even more,” says Mr Baher El-Hifnawi, the World Bank’s lead transport economist. “There will be a 30-40% reduction in trucking costs due to autonomous driving. Road is doing everything it can to reduce costs whereas rail is leaving things on the table.”
This was echoed by Först. “Rail’s modal share will go down in the next 10-15 years,” he told delegates, and this view comes from the CEO of one Europe’s most successful rail freight operators. “Rail is not historically well adjusted to adapting to just-in-time, for example.”
Mr Denis Choumert, chairman of the European Shippers Council, had some advice for rail freight operators. “Act as a community, because it doesn’t exist yet in standards, data exchange and pooling of resources,” he says. “We expect seamless logistics, but it is not seamless at all. You have 10-15 years to get your act together.”
If anything, that is being generous. It is high time for the European rail industry to prove these forecasts wrong and take positive action to get rail freight moving in the right direction again.