What future can be expected for rail freight? Are traffic estimates for the coming years positive, or do forecasts point to a steady loss of market share? Reinhard Christeller, one of Europe’s most authoritative analysts, an engineer with a long career as a sector executive and consultant, seeks to answer these fundamental questions in a contribution published by the specialist portal RailFreight.com. The starting point is far from encouraging, because rail freight in Europe has recorded a steady year-on-year decline in market share, even if volumes may have increased in absolute terms. What matters is its “weight” compared with all other modes. And even where potential demand exists, it cannot be fully met because of a range of factors, including the limits of a network under severe pressure from maintenance works, which lead to higher costs, delays and train cancellations.
“It is not true that we see no market potential, because it is there,” according to a recent statement by the Swiss group Hupac, “however, our transport services are not currently able to operate with the operational standards needed to exploit this potential and Hupac has had to cancel 25% of the north-south trains planned for 2025, while more than half of its trains suffered delays of more than one hour, with the result that road transport is once again taking centre stage.” Despite this, rail freight remains the most economical option over long distances. One example cited is the rail shipment of a twenty-foot container between Hamburg and Munich, with an estimated all-in cost of between €300 and €600, while road transport for the same volume costs at least 50% more. From a social perspective, rail freight also generates external costs that are half those of road transport, while a recent analysis concerning the Brenner route between Austria and Italy found that the gap between the two modes would be as much as fourfold.
On future prospects, it is necessary to draw on the analysis of the International Transport Forum, an Organisation for Economic Co-operation and Development (OECD) body, which forecasts overall growth of more than 84% for European freight transport across all modes by the middle of the century. However, without economic policy choices in favour of rail, the risk is that rail freight will increase in absolute terms while its market share compared with other modes remains unchanged, or almost unchanged. Therefore, the study states, “it is necessary to take decisions that create favourable market conditions for rail transport”. Which is to say everything and nothing, because it remains confined to the realm of good intentions.
But the road ahead also appears uphill for another reason. Statistics show that about half of all European rail freight, measured in tonne-kilometres, is carried by block trains, a type of service that is unlikely to increase its share within rail freight as a whole. Further growth opportunities could therefore be expected only in single-wagonload transport, which is already far from healthy, and in combined transport. To meet the ambitious targets set by Europe, these two latter segments would have to triple their performance within a quarter of a century, equivalent to average annual growth of almost 3%. In practice, this is a gamble.
The main studies suggest that rail freight can be competitive over distances of more than 200-500 kilometres, although specific cases involving shorter distances exist in Europe. Two scenarios can be envisaged: one more cautious, the other more optimistic. Under a high modal shift scenario, it is assumed that an additional 10% of tonne-kilometres over distances of more than 150 kilometres could be transferred from road to rail across Europe. If distances reach 300 kilometres, however, the increase would rise to 20%, while at 1,000 kilometres it would reach 40% and, finally, over even longer distances, the increase could be as much as 80%. In this optimistic scenario, rail freight could on average not only double, but almost triple. Even under a more cautious scenario, it is possible to envisage a market potential twice the current level for rail freight services. The conditions therefore appear to be in place, but they must be supported by a more effective regulatory framework, as well as by the removal of all the bottlenecks that still affect the network and the completion of all major infrastructure projects.
Piermario Curti Sacchi
