European rail freight transport shows no recovery
European rail freight transport shows no recovery – falling transport performance due to weak economic situation and losses in intermodal competition – operators remain in the red – process optimisation and alliances are crucial
6th February 2014
In its newly published study “European Rail Freight Transport Market 2014”, SCI Verkehr has produced a detailed analysis of the continuing weak state of European rail freight transport. Despite high expectations, European rail freight transport ended 2013 with negative results in transport performance and profits once again. The various restructuring programmes of transport companies in rail freight transport have not yet been able to achieve a significant trend turnaround in order to increase transport performance or profits. The causes for this are to some extent outside the sphere of influence of the companies themselves: the cooling economic climate within Europe on the one hand and fierce intermodal competition, often including predatory pricing from road transport companies, on the other hand represent fundamental external disturbances which require a legislative framework from politicians. Nonetheless, SCI Verkehr has also noted influencing factors which Europe’s freight railways can create themselves. These include above all the comprehensive modernisation of internal activities, structures and processes, but also size optimisation through company mergers and alliances. There is substantial unused potential for increasing efficiency here, which could unlock a turnaround in profitability.
Transport performance of railway companies shrunk further in 2013. Although a catch-up effect was noted in 2010 and 2011 following the global financial crisis, most countries have not come close to the pre-crisis level again since. Some rail freight companies shrunk so dramatically in their transport performance that the 2007 peak level will not be achieved in the long term.
The market volume for rail freight transport in 2012 amounted to c. EUR 17 billion. This value is 5% below the level of the previous year, and will not be exceeded in 2013. The situation is far removed from the goal of both politicians and the companies to significantly increase transport per rail: the modal share of rail transport has continued to display a falling trend since 2000. In the long term, SCI Verkehr anticipates a revival of freight transport by rail, with a CAGR of c. 1.3% p.a. up to 2020.
Although a few restructuring programmes are underway among operators, nonetheless the desired state of profitability has not yet been reached. Rail operators must both adjust to high volatility and secure the stability of successful business activities. Operators’ business models are currently being reworked: country markets, industry segments, production and asset structures must be precisely analysed and strategies must be correspondingly tailored.
The Western European freight railways, e.g. Fret SNCF and Trenitalia Cargo, have taken steps towards progress, but have not yet succeeded in transforming negative results into positive. Among Eastern European railways (CFR Marfa, HZ Cargo, BDz Cargo), attempted privatisation processes have failed. An exception here is PKP Cargo, which has recorded positive results in the last few years and recently successfully placed its shares on the Warsaw Stock Exchange.
In this new study, SCI Verkehr has identified the decisive trends in the currently highly volatile European rail freight transport market. Not only is the entire European transport market considered, but the 16 largest countries are also individually presented in detail. In addition, factsheets for more than 30 operators constitute a solid foundation for a comprehensive benchmarking of railway operators.
The complete study “European Rail Freight Transport Market 2014” is available now from SCI Verkehr (www.sci.de).
Contact:
SCI Verkehr GmbH
Vanessa Rühmann
Tel: +49 221 9317820
E-mail: [email protected]
