INTRO: DB Cargo Director Dr Eberhard Sinnecker has a vision of European rail freight where multinational competing networks are fed by short lines in a pattern that mirrors the US railroads. Murray Hughes met Sinnecker in Mainz and found him determined to sweep away the national structures that he believes hinder development of Europe’s cross-border rail freight

BYLINE: Dr Eberhard Sinnecker

DirectorDB Cargo AG

GIVEN the long-standing obstacles that freight trains must negotiate to cross Europe’s borders, it is perhaps surprising that no-one has yet tackled them in the same way as Dr Eberhard Sinnecker. The Director of the newly-fledged German Railway subsidiary DB Cargo AG makes clear that abolishing frontier problems is the core element in his strategy for developing the freight business. He suggests that ’he who has most frontiers is bound to suffer most’, pointing out that Germany has nine neighbours. Hence his enthusiasm for multinational alliances in Europe’s rapidly changing rail freight scene.

Sinnecker’s central short-term objective is to finish tying the knot with NS Cargo begun last year when a letter of intent was signed on June 23. If all goes well, a single organisation called Rail Cargo Europe will be born in mid-1999, and ’at the latest early in 2000’. Speaking just before Christmas, Sinnecker assured me that ’we are running on time’, and that ’the detailed planning has gone well so far’. Consummation of the merger required DB Cargo first to be vested as a separate entity within the DB holding group, which occurred on January 1 1999 as the second stage of the DB reform programme took effect. NS Cargo had crossed a similar threshold a year earlier.

Sinnecker confirmed that RCE will be a ’full-blown merger covering all freight activities, but not necessarily at the operating level’, although a number of German and Dutch locomotives, both diesel and electric, are being modified with signalling and train protection equipment to run on both networks.

Sinnecker said that all commercial, financial and management functions will be combined, and that customers will have a single point of contact at a Service Centre taking shape in a new building in Duisburg that is due to be in full operation in December 1999.

The rationale for the merger is in Sinnecker’s view simply that ’to succeed in the European market we must go beyond the national boundaries of Europe’s railways. Only by doing this can we improve service quality in the main corridors where it is most important. Anyone studying the German freight business will quickly conclude that the western ports in the Netherlands (such as Rotterdam) are very important to Germany. At the moment rail’s share of the market is relatively small, and we can see a good opportunity to grow it.’

Sinnecker put DB’s current market share of medium and long-distance domestic traffic - trips over 150 km - at 22%. In contrast, the NS figure, while growing rapidly in the last three years, has only recently reached 5%. The merger is primarily aimed at lifting the market share of Dutch-German traffic ’at least to match that of our domestic services’, said Sinnecker.

Beyond the merger

It is clear that the NS Cargo-DB Cargo tie-up is only a first step. ’This is bilateral co-operation, but neither party wants it to stop there. Both we and NS believe rail can only grow market share if we become European, so we are both looking for multilateral agreements.’

Asked where he thought all this was leading, Sinnecker said ’the objective is nothing less than the end of the national structures of Europe’s railways.’ He foresees what he calls ’industrialisation’, which he defined as ’a transformation into a professional business with a truly commercial approach’. This would ensure that ’we move away from the outlook of an authority that loves technology. There are many objectives which must be achieved simultaneously, and these include bringing down costs and meeting quality standards that satisfy the customer.’

Sinnecker’s vision is of several large overlapping networks whose professional approach will attract traffic from competing modes. He did not think all Europe’s railways will be involved, as ’it only applies to networks above a certain size’, but ’we shall see a development where small railways or short lines deliver to the big networks - it will be a quite different structure and something which has never been attempted before.’

DB Cargo signed a co-operation agreement with Switzerland’s BLS L