The railway reform becomes reality
Since the publication of the EU Transport Commission White Paper in 1991 the European transport industry is watching the liberalisation process of the railway traction with interest. The Directive 440/91 provides for the separation of railway operation and infrastructure and is intended to stimulate a sound competition between the railways, thus lastingly improving the price-performance ratio of rail transport.
From the start Hupac has actively supported the process of railway liberalisation:
- by acquiring their own locomotives (2000) for self-producing transportsin niche segments
- by obtaining railway licences in Germany (1999) and Italy (2001)
- by investing in private railway companies
- by allocating traction to private railway companies such as Rail4Chem (2003)
- by working together closely with railway organisations providing border-crossingintegrated traction services.
It was our aim to give the right signals: Combined transport needs a liberalised traction market. We can only offer our customers competitive transport services if we are free to choose our railway partners. First experiences have confirmed our strategy. With private railways for instance, we could develop and implement various new products in the shortest of time.
At the beginning of the year we have given the liberalisation process another decisive boost. We want to support the railways actively in their efforts to provide cross-border transport. In April 2004 we have invited tenders throughout Europe for the traction of our shuttle trains (ca. 60). The awarding criteria were clear: price-performance ratio and integrated traction. In future, any train will be under the sole responsibility of only one railway company, from its source to its destination.
The new concept will be implemented when the timetable is changed in mid December.
Alpine transit: a growing market
Why do we back the railway liberalisation? Hauliers, transport companies and forwarding agents are surging to the railways. Various transport prognoses expect a doubling of the combined transport in the next six to eight years. In the growing alpine transit market a Prognos study expects a volume increase from 115 m. tons to 157 m. tons until 2010. In the transit via Switzerland only an increase of 52% is expected, i.e. from 29.5 m. tons to 45 m. tons.
Which transport carrier is taking over this growth? According to the Prognos study, it will definitely be the combined transport. The growth prognosis expects an increase of 120%, from 20 m. tons to 45 m. tons.
The combined transport in transit through Switzerland has continually increased in recent years. In 2002 the combined transport exceeded the conventional rail transport in terms of volume.
In European transport politics the position of Switzerland is unique. In various national referendums – “NEAT” in 1992, the "Alpenschutzartikel“ in 1994, "LSVA“ in 1998 – the Swiss people decided and reinforced that heavy goods transport shall be relocated from road to rail. This decision is binding for Swiss transport politics. The relocation law reduces the number of HGVs in transit through Switzerland to 650,000 in 2009.
For this extremely ambitious goal, which includes the construction of the basis tunnels at the Lötschberg and at the Gotthard, Switzerland provides enormous financial means. In a further referendum at the beginning of 2004 the construction of a second Gotthard road pipe was rejected. With regard to rail priority the Swiss mean business.
Capacity bottlenecks to be overcome
How are the capacities? There are numerous deficits in the rail and terminal sector. Imagine today's road goods transport having to be processed on a 50 to 60-year-old road infrastructure. In the railway sector this is reality in various places in Europe, e.g. the southern border of Switzerland with Italy.
However, for the further development of the combined transport efficient terminals as interface between rail and road are also necessary. While the expansion of the infrastructures in the north of Europe is progressing well, the south is falling behind. The extension of the Busto Arsizio terminal can only be expected during 2005. Further terminals in the south are being planned. The capacity bottlenecks in the Benelux ports are also to be removed in the medium term. In the meantime, as a short-term solution, part of the transport could be processed over southern ports such as Genova and La Spezia.
With regard to line capacities we can only expect an improvement in the mid to long term. The basis tunnel Lötschberg (35 km) will be completed in 2007, the basis tunnel Gotthard (57 km) in 2014. An important condition, however, is that the branch lines are expanded in Italy, Germany or the Netherlands, so that the potential of the new "flatland line" can be used fully. Thus the upper Rhine line will be extended to 4 tracks by 2010/12. The Betuwe route should be ready in 2007.
The railways meet competition
The railways must become more competitive. No one knows this better than the railways themselves. For some years the big European railways have lined up internationally and invested in interoperable traction resources. Why? Because the traditional forms of co-operation among railways are obsolete. The provision of traction services by national railway monopolists impeded the capability for innovation and had a negative effect on the price-performance ratio of the offer. Instead of thinking about how processes could be improved and productivity increased they only decided to agree axis-based price increases amongst themselves. And this despite the fact that quality in combined transport has deteriorated continuously. Over the years the road reduced prices by up to 20% while the railways increased sales prices by up to 30%. A substantial part of these increases could be absorbed thanks to various product improvements of the operators and their willingness to innovate.
Hupac on an innovative path
For the coming year Hupac expect a trend reversal. The new competition situation in the alpine transit will lastingly improve the price-performance ratio for the traction of the trains. For the first time railway costs in transit via Switzerland will sink and thus compensate the reduction of the operating contributions of the Swiss Confederation. At the beginning of the year we asked various European railways to submit their offers for the traction of our trains in the years 2005 and 2006. The awarding criteria were clear: price-performance ratio and integrated traction. According to this production principle a railway assumes full and uninterrupted traction responsibility from the departure terminal to the destination terminal. This is in contrast to the current situation where operation is based on territories and the railways only operate up to their respective national borders.
What are the advantages for the railways and the customers?
- The productivity of the traction can be lastingly improved. The current change of locomotives at the borders will become unnecessary. These interfaces frequently cause problems as the required resources, for instance on subsequent line sections, are missing.
- One railway only is responsible for the traction. It is the only contact for this connection. A train in operation on a route a 1.000 km long can be co-ordinated and controlled via one interface.
- Quality contracts can be set up in co-operation with the customers. The railway assumes overall responsibility for its performance parameters. This is a big chance, because partners providing better work in terms of quality can position themselves better in the market.
- Administrative work will be reduced. Train, waybill and customs data currently sent to up to five different railway and customs offices can be co-ordinated in future via one interface. This saves money and time for everyone concerned.
The realisation of the concept
The new concept will be implemented when the timetable is changed in December 2004. Hupac co-operate with the same railway partners as previously - SBB Cargo, Stinnes, Trenitalia Cargo, Rail4Chem - alas on a new basis: We are interested in a functioning competition with strong partners. We welcome and support the initiative of the railways to change production to the concept of integrated traction and together we will solve the upcoming problems.
The competition will not weaken the railways but strengthen them. In future the railways will specialise in certain segments and/or transport corridors and achieve the best price-performance ratio there. Not all railways have to be able to do everything or run everywhere. But in certain areas each railway will increase productivity, lower costs and be able to generate profits. On this basis we can offer the market competitive products in combined transport and acquire further volume. We are certain that we can contribute substantially together with our railway partners to the transport relocation in Europe.
Conditions for the future of the rail
Each year Hupac invest ca. 20 m. Euro in the combined transport, particularly in rolling stock, terminal equipment and IT systems. However, numerous external factors have a decisive influence on the future market chances of combined transport:
- Due to a shortage of funds infrastructure expansions are delayed or not realised.
- Regulation of priorities: Passenger trains still have priority over goods trains. The separation of passenger and goods transport offers approaches to solving problems.
- Line allocation: Lines cannot be allocated or upheld in the time windows required by the market.
- Railway liberalisation: In various European countries competition in the railway industry is still unheard of.
- Customs clearance: The new railway companies have difficulties in the approval of an accelerated customs procedure.
- Approval procedures for locomotives: Different regulations in the approval of locomotives and locomotive drivers are a real obstacle for the liberalisation.
Our appeal is directed at those responsible in Brussels and Berne. It is also up to them to adequately support the combined transport as a competitive transport solution.
