Railing against Europe’s chaotic train links

Date: 04/02/1999

By Renée Cordes

Stephen Lak, who oversees infrastructure development and commercial affairs for one of Europe's busiest ports, is trying to solve a mystery.

The Port of Rotterdam management board member and his colleagues are still baffled as to the whereabouts of freight containers which disappeared from a train travelling to Padua in Italy.

While port authorities may never solve that particular case, Lak believes that better coordination of rail and other kinds of transport is urgently needed to improve logistics - the management of the flow of goods from the factory where they are produced to the consumer who buys the final product.

He advocates this not just for Rotterdam, with its vast network of trains and ships, but for the entire European Union. "What you are trying to do is make sure that your logistic pattern is not a stumbling block to your competitive position," he says. "That is the way we look at our European exposure."

In a move aimed at boosting the efficiency of freight transport, Lak's company is currently devising a database with up-to-date information on which trains depart from the port, where they end up, and which ones run on time.

The key to making the whole process work is the input from a ten-member group formed 18 months ago made up of representatives of those using the port who might be affected by any changes introduced - from those who run the bridges to those in charge of train schedules. The group is involved in all decisions from whether to invest in new infrastructure to adding train routes.

Lak insists that rather than being bureaucratic and time-consuming, getting all the parties around the table saves both time and money.

However, the company will have its work cut out if it wants to meet its goal of increasing its contribution to Dutch gross domestic product from 6.3% today to 8.2% by 2020.

To this end, the port is planning to invest heavily in rolling stock, container facilities and barges over several years.

It will also put increasing emphasis on shortening train travel times for freight, which currently lag behind those for passengers. While passengers can travel from Prague to Rotterdam in 15 hours, it takes 22 hours for cargo to get from one point to the other.

Lak argues that Transport Commissioner Neil Kinnock should also aim to boost better coordination of rail transport across the whole Union, rather than focusing on opening up the sector to more players.

"As the Commission, you should put political pressure on getting people to cooperate," he says. "That is a much better way than trying to regulate things very deep down the line."

Although Lak is in favour of opening up Europe's rail sector to more competition, he is wary of allowing too many players to enter the market.

He argues that, in most cases, three competitors are more than enough to guarantee a fair and free market.

"You should not put 20 people in the same room drinking water if you only have one tap," he says. "It is not necessary to have 20 when ten might not be still there in three years' time."

Kinnock's aides say the Commission hopes to unveil details of its long-awaited rail liberalisation package in two stages in the first half of this year.

The first part of the proposal calls for a gradual opening up of the rail freight market, while the second tackles rules on charging and infrastructure management.

Like many in the sector, Lak fears that the proposals are too general to create a favourable environment for Europe's railways, which have been increasingly losing out to road. Rail freight across the EU has declined 20% in terms of tonne kilometres over the past ten years, with rail's share of the total freight market falling by around one quarter.

Last month, Kinnock told a group of rail industry executives that the industry could save about €14.5 billion a year on operational costs if it changed its approach to business.

"Although the trend they are setting is good, I am a bit afraid of general regulations which leave a lot of leeway for interpretation," says Lak.

He also argues that the Commission's ideas on setting prices which take account of marginal social costs and create a level playing-field require further discussion.

Lak is confident that rail can ultimately compete with the lower prices for road travel over short distances of 50 kilometres or less.

However, he says the best solution for long-distance movement is a combination of rail and other kinds of transport.

"I do not think it is acceptable that in a 700-kilometre range, road is cheaper than rail," he says. "It is to do with organisation."

Interview with Stephen Lak from the Port of Rotterdam management board.