Railways as an efficient freight transport solution
in Europe –
its specific role in the North Sea region.
Tony Berkeley
Chairman, Rail Freight Group UK and Board
Member, European Rail Freight Association
© ERFA asbl – Monika Heiming – Brussels (B) & RFG – Tony Berkeley – London (UK)
1
Contents
1. ERFA and RFG
Geographical Scope of ERFA / RFG
2. North Sea Region, rail
and freight
3. EU rail policy
4. Growth and
competition
5. What next with EU rail
freight market?
6. Case study - UK
Danderyd
S
LIT
London
UK
London
7. DB view of UK
Doncaster
Rotterdam
NL
Deurne
Coquelles
8. Effect on N Sea
Region
Jonavos
B
Ahaus-Alstätte
Gladbeck
Essen
Duisburg
Köln
D
PL
Warszawa
Berlin
Mannheim
UA
Ústí nad Labem
CZ
Paris
SK
Wien
Basel
Burgdorf
F
9. Conclusion
Dnepropetrovsk
Bratislava
A
Graz
CH
HU
Budapest
Chiasso
Milano
ERFA asbl
Monika HEIMING
T.: + 32.476.88.96.46
E.: [email protected]
RFG
Tony BERKELEY
T.: + 44.7710 431 542
E.: [email protected]
I
E
Madrid
Barcelona
Rome
2
Contents
1. ERFA and RFG
Mission of ERFA
The objective of the Association is to promote European rail freight
transport and its stakeholders active in that area through the
complete liberalisation of the market. :
For an economically attractive rail freight
market;
To improve the intermodal competitive
position of rail freight;
To bring about optimal operating
conditions on the European rail network;
To reduce the legal, technical, social and
administrative obstacles in cross-border
traffic.
ERFA asbl
Monika HEIMING
T.: + 32.476.88.96.46
E.: [email protected]
RFG
Tony BERKELEY
T.: + 44.7710 431 542
E.: [email protected]
A properly functioning market!
3
Contents
ERFA - President: Dr Luca Ronzoni, NordCargo (I)
1. ERFA and RFG
Board of Directors
General Assembly
ERFA asbl
Monika HEIMING
T.: + 32.476.88.96.46
E.: [email protected]
RFG
Tony BERKELEY
T.: + 44.7710 431 542
E.: [email protected]
Undertakings:
Associations:
1. Tony Berkeley
RFG
UK
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
1. ASSTRA (I)
2. Martin Henke
VDV
D
2. Ferrmed (B)
3. Beni Kunz
HUPAC
3. Izba Gozpodarcza
4. Jeroen Le Jeune
Dillen & Le Jeune B
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
AAE - Ahaus Alstätter Eisenbahn (D)
Activa Rail (Transfesa) (E)
Bertschi (CH)
Comsa (E)
Crossrail (CH)
DLC - Dillen & Le Jeune Cargo (B)
Duisport Rail (D)
ERS (NL)
European Bulls (NL)
Europorte 2 (F)
EWS - English Welsh & Scottish Railway
(UK)
Freightliner Group (UK)
GB Railfreight (UK)
Hector Rail (S)
HGK AG - Häfen u. Güterverkehr Köln (D)
Hupac (CH)
LTE (A)
Metallurgtrans (UA)
MEV Eisenbahn-Verkehrsges. (D)
Nord Cargo (I)
Pannontrain Vasúti (HU)
Rail4Chem (D)
RBH Logistics GmbH (D)
Transachema
Transpetrol GmbH (D)
Veolia Cargo (F)
Viamont (CZ)
Wascosa (CH)
CH
5. Denis Paillat
Veolia Cargo
4. Netzwerk Privatbahnen (D)
6. Luca Ronzoni
Nord Cargo
I
5. Rail Freight Group (UK)
7. Konstantin Skorik Freightliner
UK
6. Verband deutscher
8. Graham Smith
UK
Transportu Ladowego (PL)
Verkehrsunternehmen (D)
7. Wirtschaftskammer
EWS
9. Markus Vaerst
AAE
10. Martin Vosta
Viamont
F
D
CZ
Österreich, Fachverband
der Schienenbahnen (A)
Aufsichtsrat seit 16. April 07
General Secretariat
Monika Heiming
4
Contents
1. ERFA and RFG
ERFA asbl
Monika HEIMING
T.: + 32.476.88.96.46
E.: [email protected]
• The Rail Freight Group is the representative body of the UK rail
freight industry.
• Its 160 corporate members include customers, suppliers, rail
freight train operators and infrastructure managers.
• Its objectives are to grow the volumes of freight carried by
rail.
RFG
Tony BERKELEY
T.: + 44.7710 431 542
E.: [email protected]
5
Contents
2. North Sea
Region, rail
and freight
The North Sea Region

Covers the greatest part of European trade with
third countries, generally through ports bordering
the North Sea
Freight traffic through these ports is expected to
treble in the next 25 years
Much of it is to go to inland destinations, many
hundreds of km away, by water, road or rail
6
Contents
Moving freight from major port to inland
destinations
2. North Sea
Region, rail
and freight

By water – coastal or inland waterways, where
they exist!
By road – increasing congestion, lack of drivers,
costs and high emissions, but logistics business
very competitive and efficient
By rail – congestion with passenger traffic, lack of
infrastructure investment, low emissions,
sometimes monopolistic and inefficient
The future has to be transport by water and
rail for a growing share of the European
logistics market!
7
Contents
2. North Sea
Region, rail
and freight
Rail freight in the North Sea Region
Parallel with the coast
eg Thames to Scotland,
Zeebrugge to Copenhagen,
Goteburg to Stockholm
Competes with coastal shipping
Inland from ports
eg Humber to Manchester,
Rotterdam to Vienna,
Hamburg to Warsaw
Sometimes competes with inland water
This suggests that the highest rail volumes and
growth will be ports to inland destinations.
8
Contents
3. EU rail policy

Can the Europe’s railways cope with the growing
ports traffic along with other freight and passenger
services?
EU railway legislation…

Started in 1991
Is still not finished
Many member states have failed to implement it
and infraction proceedings from the EC are
expected shortly.
We still do not have the necessary structure to
enable liberalisation and encourage competition
9
Contents
3. EU rail policy
Rail Freight Policy Objectives of the EU
Open access to foster
Open access
to foster
competition
and create
competition
and create
incentives
for innovative
incentives
for innovative
and
competitive
rail
and
competitive
rail
freight services
freight services
I
Fostering
Fostering
Interoperability ofof
Interoperability
national
networks
national
networks
(and ofof international
international
(and
services)
via
services)
via
technical
technical
harmonisation
harmonisation
Development
Development
TEN
ofof
TEN
corridors
corridors
ERFA asbl
Monika HEIMING
T.: + 32.476.88.96.46
E.: [email protected]
RFG
Tony BERKELEY
T.: + 44.7710 431 542
E.: [email protected]
Setting-up
the
Setting-up
ofof
the
European
Railway
European
Railway
Agency toto implement
implement
Agency
the EU
EU interoperability
interoperability
the
and safety
safety directives
directives
and
and toto safeguard
safeguard the
the
and
integration ofof the
the EU
EU
integration
networks
networks
Development
Development ofof aa
common
safety
common
safety
approach
to
facilitate
approach to facilitate
access
accesstotothe
themarket
market
10
Contents
3. EU rail policy
EU’s final objective
“Creation of an integrated
European railway area to
allow cross border services
under a single responsibility in
order to guarantee a high EU
freight market of services to the
customer”
I
FIN
RUS
NO
S
DK
UK
PL
NL
D
B
L
UA
CZ
SK
F
A
CH
I
ERFA asbl
Monika HEIMING
T.: + 32.476.88.96.46
E.: [email protected]
RFG
Tony BERKELEY
T.: + 44.7710 431 542
E.: [email protected]
P
HU
RO
E
11
Contents
3. EU rail policy
The reality!
Market dominated by incumbent or market actor taken over by incumbent
Cooperation of incumbents
Takeover of RU/Shipper (planned)
FIN
Joint company of incumbents existing / planned
RUS
Discussions re cooperation / takeover taking place
Green Cargo
S
DK
UK
EWS
PL
NL
B
D
UA
CZ
SK
F
ECR
A
CH
BLS, BRS
I
ERFA asbl
Monika HEIMING
T.: + 32.476.88.96.46
E.: [email protected]
RFG
Tony BERKELEY
T.: + 44.7710 431 542
E.: [email protected]
HU
RO
E
Transfesa
... And where are the new entrants?!
12
Contents
4. Competition
and growth

The European Commission has demonstrated a
direct relationship between competition above rail
and growth. This is not surprising, since
competition generally enable better service quality
and more competitive services than do
monopolies.
13
Early market opening fosters better traffic
performance
European Commission
%
80
Percentage variation of rail freight
traffic performance 1995-2005 in
selected EU countries (on the basis of
tkm)
68
61
60
44
40
37
20
Competition
No or little competition
0
-15
-20
-20
-40
-50
-60
UK
NL
AT
DE
FR
LU
IE
Source: European Commission
Directorate-General for Energy and Transport
2
14
Source DG TREN
15
Contents
5. What next with
EU rail freight
market?
Comments on EU Market
• Only 35 % of rail freight legislation implemented in practice in entire EU.
• Over 65 % of rail freight market segments still dominated by incumbents
• Market share of new entrants in the EU: 7 % (est’d)
• Highest market share of new entrants in 1 single EU member country only:
40 % in the UK
• Over 800 billion € of state aids for SNCF, Trenitalia intends to follow the
example …
• Over 80 % of delays of new entrants due to problems with infrastructrure
• Over 70 % of current wagon fleet in the EU in the hands of the incumbents
• Profitability of new entrants remains extremely low (1-1,5 %) -> mergers /
acquisitions of new entrants by incumbents (where does the money
come from??)
• Block train traffic is no more an “asset” but a mere “commodity” -> new
entrants need to increase added value in a hostile market environment
ERFA asbl
Monika HEIMING
T.: + 32.476.88.96.46
E.: [email protected]
RFG
Tony BERKELEY
T.: + 44.7710 431 542
E.: [email protected]
After 16 years, it is all still one big inefficient monopoly!
16
Contents
5. What next with
EU rail freight
market?
Does the Commission intend to complete
the process of full market liberalisation?
If so, how – and when?
Starting from the principles of the First Railway Package…
Q: How does the EC intend to effectively “enforce” market access
in the recast of the First Railway Package?
Q: How does the EC intend to ensure EU-wide harmonised and
fair priority rules
ERFA asbl
Monika HEIMING
T.: + 32.476.88.96.46
E.: [email protected]
RFG
Tony BERKELEY
T.: + 44.7710 431 542
E.: [email protected]
Q: Where is regulation? How can a market work without strong,
far-reaching independent regulation?
Q. When do companies have a dominant position in the rail
freight market?
Q. Does the EC believe its own statistics of a clear relationship
between market opening and growth of rail freight?
Q: To what extent does the EC include qualitative and quantitative
performance-related criteria into multi-annual financing
schemes for infrastructure?
17
Contents
6. Case Study –
UK

In the UK in the last 10 years:

Passenger.km has grown >40%
Freight tonnes.km has grown >60%
Passenger performance now 90% within 10
minutes
Network Rail’s costs down 31% 2004-9; must
come down a further 21% 2009-14
Freight performance:

18
UK Railway Jobs
Estimate of Railway Jobs 1994/5 and 2004/5
19
Contents
6. Case Study UK
The essentials for success
in the UK vs the EU
Total separation of IM from train operators (NR cannot operate
trains except for maintenance)!
Every institution and body is fully independent!
A strong and effective Regulator with extensive powers!
Waiting times in case of complaints very short, virtually no court
cases!
Fair allocation of capacity between operators with agreed
rules!
State aid is not given to an incumbent with the wrong market
model but to trigger modal shift (“green container”)
Network Rail has been forced by the Rail Regulator to increase
its efficiencies by 31% in 5 years, and we hope for the same
again!
Full open access to rail network and terminals for freight!
ERFA asbl
Monika HEIMING
T.: + 32.476.88.96.46
E.: [email protected]
RFG
Tony BERKELEY
T.: + 44.7710 431 542
E.: [email protected]
Trust of the market actors in the market forces and the tools!
All this has resulted in a growth of >60% in ten years!
20
7. DB AG
Why continue to attack the UK system
using statistics that the UK ORR
source does not recognise?
21
7. DB AG
The figures from the independent UK Office of Rail
Regulation
22
8. How does all
this affect the
North Sea
Region?

Railway frontiers around the region include:
UK – Channel Tunnel – France – Belgium –
Netherlands – Germany – Denmark – Sweden –
Norway
Frontiers make competition even more difficult
because of technical, commercial and legal
barriers, sometimes favouring incumbent
operators
The challenge of growth, road and rail congestion
The wide difference between peripheral and more
central regions
23
Contents
The challenge for EU and national politicians
9. Conclusion
Rotterdam - expects >10% per annum growth in
traffic for next decade
EC expects freight to increase by 50 % by 2020!
UK intermodal rail freight to increase by over six
times by 2030.
Will the Commission have the courage to act to
finish once and for all the 16-year liberalisation
process of the railways, and to go the last ‘critical’
mile to full separation and independence? Or...
ERFA asbl
Monika HEIMING
T.: + 32.476.88.96.46
E.: [email protected]
RFG
Tony BERKELEY
T.: + 44.7710 431 542
E.: [email protected]
Is the European rail freight sector like Microsoft,
but with the company supplying most of the
computers as well as the systems and the software?
24
Contents
9. Conclusion
Very last thoughts ...
Surely it is time for the Commission and member
states to accept that a competitive rail freight
liberalised market has to nurtured in a proactive
manner., meaning…

ERFA asbl
Monika HEIMING
T.: + 32.476.88.96.46
E.: [email protected]
RFG
Tony BERKELEY
T.: + 44.7710 431 542
E.: [email protected]
Growth comes with fair competition,
Fair competition requires total separation of IM
from train operations
Strong and effective regulation is required to
ensure fairness and transparency
Competition rules on dominant position must be
applied to the rail freight sector in a number of
separate market segments.
The alternative monopoly model that was France
achieved a drop of 40% in rail freight in 5 years
and a service quality that made and still makes
customers weep! PS Strikes again yesterday! 25
Tony Berkeley
+44 7710 431 542
[email protected]
RFG News - www.rfg.org.uk/news
Successes and Lessons of Rail Liberalisation in the
UK –
http://www.rfg.org.uk/files/r71112Successes.pdf
UK Office of Rail Regulation – www.orr.gov.uk
26