|Author (Person)||Barnard, Bruce|
|Series Title||European Voice|
|Series Details||Vol.7, No.7, 22.2.01, p14|
AFTER more than a decade of false dawns rail freight companies can finally make out the faint outlines of a deregulated pan-European network that offers their last chance to halt the industry's decline.
The breakthrough, which came last November when member states and the European Parliament agreed on a phased liberalisation of rail freight beginning with key cross-border routes in 2003, triggered an immediate response from the major players.
Forecasts that 2001 could be a make-or-break year for the industry were underpinned by reports in late January that Germany's Deutsche Bahn and France's SNCF are in talks to buy all or part of English, Welsh and Scottish Railways (EWS) in a move that will accelerate the creation of a pan-European rail freight company.
Deutsche Bahn's freight unit, DB Cargo, is building a pan-European operation. Railion, its 3 billion euro-a-year joint venture with NS Cargo of the Netherlands, has just teamed up with DSB Gods, the Danish state rail freight company, and is casting around for new partners. It is also in discussions with PKP, Poland's state railway, and Czech Railways over possible freight joint ventures linking east and western Europe.
Rail freight companies realise they can only compete with trucks by joining forces. "With passenger [rail], cooperation can be through alliances, but with cargo I think it will be more company-oriented, maybe mergers," says DB Cargo chairman Hartmut Mehdorn. "Even Germany is too small to have a successful cargo operation."
There is no place any more for the nationalism that has dogged efforts to "Europeanise" the industry.
"We need to prepare ourselves for the end game," Helmut Draxler, head of Austrian Railways, told an industry gathering last month. "Not more than three companies will survive."
The downside of cross-border consolidation is that three or four large state-owned companies will be likely to dominate the freight network, freezing out new entrants into the industry. And there is no guarantee that consolidation will reverse the slide in rail's share of the freight market from 32% in 1970 to around 12%, and falling, today. In fact, as the state companies become more commercially minded and are progressively privatised, they will axe loss-making cargoes and routes.
There are some private success stories, such as Rotterdam-based Short Lines, which captured a major contract with German chemicals giant BASF from Railion, but state operators dominate in most markets, except Britain where the industry is entirely in private hands.
The rail freight industry is finally coming to terms with the reality of a competitive single European market. But the jury is still out on whether it can survive the looming shake-out.
|Subject Categories||Mobility and Transport|