Europe is unlikely to take the freeway just yet

Date: 21/01/1999

By Bruce Barnard

Just like many other good ideas, rail freight freeways were fatally flawed. Evening up the odds in favour of rail only made sense if the industry was ready to take advantage of the initiative, if customers were prepared to put their trust in rail and if protectionist governments did not immediately smell a free-market plot to undermine their featherbedded state-owned railways.

The theory still holds good: creating pathways to enable non-stop rail freight services across Europe will dramatically cut transit times, allowing trains to compete head on with fast and cheap road transport. All that was needed, it seemed, was the political will to give higher priority to freight in a passenger-dominated culture.

Last year was billed as the year when rail freight freeways would take off. The reality is that only four routes have been cleared and just one, between Antwerp and Milan, is functioning. The freeways are still a theory, and likely to remain so.

Rather than highlighting rail's potential, they have thrown the spotlight on the industry's inefficiency and lack of commercial savvy. Transit times available on the freeways have been “worse than those already available through conventional channels,” says Julia Clark, director of Rail Freight Group, a UK lobby.

The railways blame technical and safety issues for the paralysis. Not so, according to Clark. “The barriers are institutional and arise from resistance to the loss of control implied by a pre-agreed system of [rail] path allocation, pricing and operation, rather than any genuine problems,” she says.

The reality is that the freeways are doomed to fail unless the railways address the key questions of performance standards, overmanning, pricing and labour relations which put them at a permanent disadvantage to road transport.

There is some truth to the industry's claim that it can only compete with trucks if the Union adopts a 'user pays' charging system. But this should not be used as a shield to hide its shortcomings. European railways are “unreliable, bureaucratic and hopeless at customer service,” according to Colin Beaumont, director-general of the British International Freight Association.

The fate of one of the most ambitious freeways, between London and Sopron, a major Hungarian transit hub, will be decided by the railways' ability to quote competitive prices.

A marketing study last year concluded that at current tariffs for transit through France, Germany and Austria, the route would not even attract one train per day in each direction. With prices fully competitive with road, this could rise to between four and six trains per day in each direction. The fact that English, Welsh and Scottish Railways, a US-owned railway which hauls more than 90&percent; of British rail freight, is seriously examining the route underlines its potential.

A few successful freeways, however, will do little to improve the industry's overall market position. An open and competitive rail sector is the only answer and so far there is little sign of this emerging except in the UK, the Netherlands, Sweden and Denmark.

Private operators are still personae non grata on Europe's state-owned rail tracks. Rob Spierings, chief executive of Short Lines, a Rotterdam-based private operator, likens the process of getting access to “mission impossible”.

Germany, Europe's biggest market, is effectively closed to outsiders, according to VDV, the Association of German Transport Companies. VDV's president Dieter Ludwig says only one freight train service is currently competing against DB Cargo. In theory the track is open to all companies, but Deutsche Bahn still sets fees which are biased against newcomers who tend to operate a small number of trains.

The message for Union governments which own and bankroll the rail industry is simple: if they seriously want to shift freight from clogged roads to under-utilised railtracks, they must throw open the entire network to private businesses employing their own locomotives, wagons and crews.

And they must be prepared to face down the three countries blocking progress: France, Belgium and Luxembourg.