Market Overview

European Transport Authorities Seek Shift Of Cargo From Road To Rail

European Transport Authorities Seek Shift Of Cargo From Road To Rail

New European rail freight coalition formed to promote pan-European masterplan for rail. 

A number of European rail freight operators joined the Rail Freight Forward Coalition (RFFC) at the COP24 climate meeting in Katowice, Poland, today, aiming to achieve a 30% market share for rail freight by 2030. Rail is said already account for 18% of the market.

This latest move in rail freight follows the European Commission's decision this week to approve state aid funding from the German Government to German rail that will see the shift of cargo from trucks to rail in an effort to reduce carbon emissions.

Some €350 ($395 U.S.) million will be invested via a scheme that will reduce track access charges paid by rail operators to access the infrastructure on which they operate by up to 45%, a saving which the operators will be required to pass on to their customers in the form of reduced freight rates.

Competition commissioner Margrethe Vestager said, "Promoting the shift of freight transport from road to rail is one of many measures that Europe needs to take to help reduce our environmental footprint. The German freight transport aid scheme does exactly that – it supports this shift, ensures benefits are passed to customers, and will contribute to meeting the EU's environmental and transport objectives, without unduly distorting competition."

Meeting the EU's environmental goals will be a challenge, but shifting freight from road to rail by levelling the infrastructure cost playing field will offer a substantial boost to a rail freight industry that has found it difficult to raise investment funds in the past, according to Germany's Rail Freight Masterplan developed last year by Germany's Federal Ministry of Transport and Digital Infrastructure (BMVI), in association with a number of industry and academic organisations.

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The report says there will be an increase of 40% in the movement of freight compared to 2010 levels and if environmental targets are to be achieved a modal shift is essential.

According to the Masterplan, the railway's advantages over road, including a high proportion of electrification within the industry, and, "the uncomplicated conversion of electrical energy into tractive power and the unique system of regenerative braking where braking energy is fed back into the railway power grid, rail freight stands out from other forms of transport and will be energy efficient and have a low climate change impact in the long term."

German rail freight companies have already embarked on a significant investment plan, of more than €1 ($1.3) billion from 2013 – 2020 for, among other things, more efficient freight wagons with quiet braking systems that can generate energy back into the grid under braking.

Additional measures that the German Masterplan expects to be implemented as soon as is practicable are the upgrading of rail track to allow for 740 metre trains, and for significant private investment in modern rolling stock and new technologies with sensors and telematics.

Funding for the first automated, digital train formation yard that will be developed and tested at Munich North marshalling yard will also come from the private sector. Initial work for the marshalling yard began at the end of last year.

Finally, the Federal German Government produced a blueprint for the funding of rail freight research into the future, the basis for this will be the overview of railway research, that was prepared by the Federal Ministry of Transport and Digital Infrastructure, also in 2017.

Meanwhile, Germany's approach to rail freight is expected to offer a way forward for other EU members that will follow its lead. In the neighbouring Netherlands a similar masterplan to Germany's is reportedly being developed with the intention to produce trains of up to 1,000 metres in length and new digital technology.

Meanwhile, the director of the Dutch pressure group RailGood, Hans-Willem Vroon, has said that a German Benelux rail freight masterplan should include efficient and market-oriented international cooperation in rail infrastructure management; harmonization of infrastructure charges in northwest Europe and that the EU should create full competition in rail freight.

Vroon also said that the plans for the European Rail Traffic Management System (ERTMS) should be more in line with that of neighbouring Germany. He argued that the ERTMS threatens the continuity of private rail freight operators.

Members of the RFFC include BLS Cargo, CD Cargo, CFL Multimodal, DB Cargo, GreenCargo, Lineas, LTE Group, Mercitalia, Ost-West Logistik, PKP Cargo, Rail Cargo Group, SBB Cargo, SNCF Logistics, ZSSK Cargo.

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Posted-In: European Union FreightNews Global Markets General


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