INTRO: Shippers vented their anger in Rotterdam at foot-dragging by state railways over open access, cost reductions and priority for freight. Yet Richard Hope found many convinced that Europe has the potential to match intermodal volumes hauled in North America

’WE ARE experiencing a deterioration in service levels as the cost rises’, delegates to the Intermodal 98 conference in Rotterdam were warned on December 2. ’The resistance to openness and transparency is institutional’, and ’talks on quality control break down.’

The speaker was Peter Jacobse, Director Intermodal Services for Sea-Land Services Inc, a veteran of organising dedicated container trains linking the port of Rotterdam with cities in western Europe. Against a background of rising costs and unreliable service, especially on international routes, Jacobse voiced concern about his ability to continue the current level of operations.

His frustration at the lack of progress in liberalising and improving the performance and efficiency of Europe’s loss-making state railways was obvious. ’There is evidence from the United States that running railways can be profitable’, he pointed out; ’all it takes in Europe is vision and co-operation.’

Sea-Land is one of four deep-sea shipping partners which launched European Rail Shuttle in 1994. To achieve the speed, economy and reliability needed, ERS takes the commercial risk on what are effectively chartered container trains (RG 6.97 p393).

ERS is still going, and running 68 shuttle trains per week - unlike NDX which was set up for a similar purpose in 1996 by Sea-Land’s US parent, CSX Corp, in partnership with DB Cargo and NS Cargo. NDX folded last year, and two of the three routes it had established since operations began in January 1997 have been terminated; the third, a daily connection between Rotterdam and München, was taken over by DB’s intermodal subsidiary Transfracht International (TFGI).

While Jacobse sees major scope for expansion, ’success depends on creativity and responsiveness to customers.’ Guaranteed delivery is what they want, and ’customers are willing to switch from air to rail on a slower schedule’ if they get it. Unhappily, ERS is ’increasingly confronted with a lot of lateness’ which has generated ’increasing resistance to using rail.’

No open access yet

There was a general view that the European Commission’s attempts to open up international rail freight to competition and market forces - while well-intentioned - had not as yet been successful. Starting in 1991 with the landmark 91/440 directive on open access, the EC’s initiatives had run through to the launch of a first wave of Trans-European Rail Freight Freeways a year ago (RG 5.98 p313).

Unfortunately, few Terff paths had been taken up, and then only by state railways which were using the route anyway. Alan Bennett, General Manager, International Rail Relations, for English Welsh & Scottish Railway, observed that so far the only tangible benefit from Terffs had been ’to strip 12 h out of the timetable.’

Bryan Stone, a widely-respected intermodal consultant, remained optimistic despite a decade of disappointment. ’The point is being reached where nobody is going to allow intermodal to be held up by the fragmentation of the European rail industry.’

Though open access ought to stimulate big private sector players, Stone said that France was currently enlisting the support of Italy, Spain and Luxembourg at government level in killing it off. He believed that pressure from the logistics industry ’would not allow it’.

This would be self-defeating because ’national railways are not adapted to present and future demand’, nor are they ’responding to transport liberalisation.’ The truth was that ’there is no coherent rail network in Europe’, said Stone; ’so far the barriers to third parties have proved real and insurmountable.’ He believed that separation of the functions traditionally performed by national railways had to be visible; otherwise third parties can be blocked.

Another issue that had to be addressed was ’widely divergent charges for track access’. Stone, who has advised the European Commission on intermodal issues, told delegates to expect new directives preventing national railways from simultaneously acting as ’train operators, track allocation bodies and infrastructure management bodies’ which ’must be separate and independent businesses.’

What is more, ’the right to bid for and hold capacity’ would become independent of ’the right to access to infrastructure to run trains’. In other words, integrators or shippers would be able to contract for train paths, and then hire a licensed rail operator to run their trains.

Finally, there had to be an independent regulator to resolve disputes, as in Britain, along with neutral statutory bodies to perform safety regulation ’which do not provide transport services and are also completely independent of those who do.’

Big black empty hole

France was seen by Ed Smulders, Director-General of NS Cargo (p91), as ’a big black empty hole’ because of the obstinate refusal by SNCF to allow any element of competition on to the tracks it controlled.

What is worse, the general increase in freight tonne-km (p93) has pushed intermodal, with its lower margins, to the back of the queue, and seriously undermined reliability during much of 1998.

Jean-Michel Dancoise, Chairman & CEO of CNC which carries containers and swap bodies, attributed the delays to chronic shortages of locomotives and drivers compounded by sporadic strikes. The disruption had already gone on for eight months with no end in sight.

’We are in a tunnel and we don’t know how long it is’, he said. CNC was ’no longer able to invest and may soon be out of the market’, he warned. ’Our challenge is to be alive tomorrow.’

Despite being 75% owned by SNCF, Dancoise said CNC is considering how it might become a licensed railway company so that it could run its own trains. ’The railway industry seems more and more disorganised’, he complained, ’and we have not seen rail companies increasing efficiency.’

CAPTION: Container shuttle trains between Rotterdam and Europe’s industrial heartlands have proved a successful formula, but levels of reliability still need improvement

CAPTION: Belgian National Railways is expanding terminal capacity at Antwerpen to meet growing demand for intermodal services. Two open access companies have applied to run trains in Belgium

Frustration boils over at Intermodal 98

Logistics providers and shippers openly expressed their anger in Rotterdam at the lack of progress by state railways in providing open access, cutting costs, providing a reliable service, and generally raising the profile of freight compared to passengers. Despite this sense of frustration, Richard Hope found many big players who were convinced that Europe has the potential to match the far larger market share than intermodal rail has captured in North America

La frustration déborde à Intermodal 98

Les prestataires en logistique et les chargeurs ont ouvertement exprimé leur colère à Rotterdam devant le manque de progrès réalisé par les chemins de fer nationaux en matière de libre accès, de réductions de coûts, de fiabilité de services et plus généralement d’amélioration de la condition du fret, en comparaison avec celle du trafic des voyageurs. En dépit du sentiment de frustration, Richard Hope a trouvé beaucoup d’acteurs importants qui restent convaincus que l’Europe a le potentiel suffisant pour faire face à une part de marché aussi grande que celle capturée par l’intermodal ferroviaire en Amérique du NordFrustration herrscht an der Intermodal 98

Logistik-Anbieter und Spediteure haben in Rotterdam offen ihrem ??rger über den mangelnden Fortschritt bei den Staatsbahnen in Sachen Freier Zugang, Kostensenkungen, Bereitstellen von zuverlässigen Angeboten und generell im Heben des Status des Güterverkehrs gegenüber dem Personenverkehr Ausdruck verliehen. Richard Hope fand trotz dieser Frustration, dass viele wichtige Teilnehmer in diesem Markt davon überzeugt sind, dass Europa das Potential hat, den viel gr