Ladies and Gentlemen
I would like to extend a warm welcome to you to the International Traffic Forum, which we are holding here on the occasion of the 40th anniversary of Hupac. Many of you have traveled long distances to arrive here: from Denmark, Great Britain, France, Spain, Poland, Russia and numerous other countries. Many of you came by plane. You were able to choose from between various airline companies, at different conditions and prices, but with uniform operating and safety standards.
Now imagine that there are a number of private and independent airline companies, which you would like to use to fly to Lugano or Malpensa, but they cannot land there, because the infrastructure, that is the airport, belongs to a national airline, in other words, the direct competitor. Imagine that your private airline company succeeds in spite of that in getting a slot at the airport, but the plane cannot start because when and whether it will be fueled is uncertain. You may have to wait days in some planes, because the slots are assigned by competitors or their subsidiaries. If you actually get into the air, you might have to land at the border due to social regulations and the consequently limited number of a maximum of two nights in a foreign country, so that the pilots can return to their place of residence on the same evening. Then you might have to fly with trained but not tested pilots in certain countries, in which only national airlines may train pilots. In addition, private airline companies cannot fulfill the training stipulations set by the national airline companies, because the simulators produced by the main competitor cost several million and are not supplied to competitors. In many countries, private airline companies cannot even complain, because the regulators responsible do not have authority to make decisions and belong to the transport ministry, which also monitors the national airline company.
Do you find this description grotesque? Then welcome to our transport forum on the topic of rail liberalization. Sixteen years after signing of the EC guideline 91/44, eight years after the 1st rail reform took effect in Switzerland, and five years after the 1st rail package of the EU took effect, freight trains travel on Europe's rails at conditions, under which you would certainly never fly.
But it all started in such a promising manner. The policy of Switzerland and the EU for shifting transport is based on three principles:
Rail liberalization as a central tool of this transport policy should ensure that different rail companies can operate independently on a neutrally managed rail network and compete fairly. We know that this stimulates the market from experience in airline transport:
- air passengers can choose from a wide selection of products,
- they pay low prices.
- an increasing number of people are flying increasingly often.
It is good that rail freight transport is also assessed positively with respect to the environment and social issues compared to other means of transport, with less energy consumption and use of area, fewer CO emissions and a high degree of transport safety.
Implementation of the EU guidelines for the market opening of rails is left to the discretion of each member country. The leeway for interpretation is large, consciously large, and the panorama in Europe is correspondingly varied. In rail freight traffic, we are a long way from a balanced, well functioning market, in which no participant has a dominant position. The new, private rail companies have only been able to carve out a market share averaging less than 10% till now. The leader is Great Britain with a market share of new, private rail companies at 30%. The Netherlands is also making progress with 15%, and Switzerland, Austria and Germany follow at 10%. Italy and Belgium have shares of only a few percentage points, while France is – still – last with 0%. Gotthard is the only corridor in Europe today, in which the market is playing a big role. Various rail companies – public railway companies as well as private ones – are competing, and none of them has a dominant market position.
The correlation between market opening and development demonstrates that competition is beneficial. Rail freight traffic has grown most strongly in those countries, in which opening of the market has progressed most. From 1995 to 2004, growth rates were at approximately 70% in Great Britain and the Netherlands and about 30% in Switzerland, Austria and Germany while they stagnated or declined in Belgium, Italy and France.
The high expectations put on rail liberalization have not been met till today. Various processes are underway for opening the market, but they are only advanced in a half-hearted way at best. In the meantime, tendencies going in the opposite direction are becoming apparent. State rail companies are moving increasingly into the center of strategic, national policy interests in a few countries due to economic and labor policy reasons, among others. Protectionism can be found on many levels.
This takes us to a central issue of our transport forum: Is there a threat of remonopolization in Europe? Are the unfavorable flight conditions, which I mentioned at the start, steps backward and intentional obstacles on the difficult way to open markets? From our vantage point in our virtual airline high up in the air, we see:
- An aggressive expansion policy by a few railway companies with the obvious goal of advancing from national monopolies to international ones, if possible with government funds and support.
- The lack of or incomplete separation between infrastructure and operations. This can result in preferential treatment for national railways and obstacles for new, private rail companies.
- There has been vertical integration of intermodal operators by the railways over the past several years. Due to the bounds to one railway company, intermodal operators are not able to choose freely between rail partners and consequently get competition going.
- In addition, lack of assertion to overcome historically existing technical and administrative obstacles, e.g., safety regulations, approval of rolling stock and locomotives. This results in high costs and consequently in entry barriers for new, private rail companies. In France, there are no legal guarantees for licensing and certifying new railway companies today. Artificial barriers are set up in part, for example, the monopoly for training locomotive drivers held by Belgium national railways.
- And we see de-facto control of important facilities and services relevant to infrastructure by national railways (among others, terminals, shunting functions, energy supply and fuel stations) as well as de-facto protection of national railways including direct and indirect subsidies.
Ladies and gentlemen, before I pass the word to Filippo Leutenegger, who will guide us through the current panorama of rail liberalization, I would like to say a couple of words about Hupac. The company was founded here in Ticino, in Chiasso on the border to Italy, 40 years ago. Five stockholders with 20% capital investment each laid the cornerstone: the Swiss National Railways, the transport entrepreneurs Hans Bertschi and Sandro Bernasconi and the forwarding companies Danzas and Jacky Maeder. Even today, 72% of the stock is owned by transport and logistics companies, while the railways have a share of 28%. Hupac purchases and finances the cars for railway transport itself on principle. It owns and operates a few of its own terminals, including the hub terminal Busto Arsizio-Gallarate near Milan, and it has rail licenses, which enable it to participate as a driving force in the current process of rail liberalization. And above all, structured and oriented as a private enterprise, Hupac has the freedom to work together with rail partners of its choice and to improve the productivity and quality of rail freight transport continually, as with the introduction of integrated traction responsibility in 2004.
Hupac is one of the pioneers of intermodal transport and was also present when UIRR was founded together with the French Novatrans, the Dutch Trailstar, the Belgium TRW, the German Kombiverkehr and the Italian Ferpac (later Cemat) in Munich in 1970. The following were set as guidelines at that time for developing intermodal transport:
- The road transport company is the main freight manager on the complete route including transport on rails.
- Representatives of road transport should have a majority vote in piggyback companies.
- Everyone, who transports on the roads, must have free access to rail transport.
We are convinced that these guidelines still provide optimum prerequisites today to operate intermodal transport with success. In 2006, Hupac transported 600,000 road freight orders on the rails for its customers and stockholders. By 2010, Hupac wants to increase the volume to almost one million with annual two-figure growth rates and consequently contribute to shifting freight transport from roads to rails.
For the coming ten years, we wish that the rail system could participate fully in the forecast market growth of freight transport of 40%. We hope that:
- liberalization stimulates the market throughout Europe;
- a critical mass of alternative traction providers will become established;
- the railways can increase quality, productivity and efficiency decisively
- political forces in Bern, Brussels and the individual European countries steer and advance the process of rail liberalization in a targeted manner;
- and we hope that rail freight transport can finally take off and develop freely.
- Market opening of rail freight transport
- Expansion of the rail infrastructure in line with the times
- Creation of fair conditions of competition between road and rail