Friday, January 24, 2014

European Rail Freight - for Track Cargo and Logistics Groups there is Good News and Bad News

Boss Says 'Like a Dog Running in Circles Biting its Own Tail'
Shipping News Feature

EUROPE – Players in the European rail freight market have operated a 1.5 kilometre long freight train from the Sibelin Yard, south of Lyon, to Nimes as part of Europe’s 3 year project to find ways to reduce operating costs by over 30% and increase efficiency and capacity on selected freight corridors across the continent. This news comes as DB Schenker extends its network, but elsewhere, financial troubles lead a Dutch logistics firm to cease operations in its rail cargo division, and cause the latest privatisation attempts of the freight subsidiary of Croatia’s national railway to fail.

First to France where on January 18, national railway SNCF in partnership with national rail network RFF and German intermodal operator Kombiverkehr and 16 other industry stakeholders, tested the ‘long’ freight train developed as part of a €4.4 million project, co-financed by a grant from the EU.

The test consisted three of Kombiverkehr’s regular Germany - Spain intermodal trains (two 410-metre trains and another 620-metre train) which were repurposed as a pair of 750 metre long trains coupled together at Sibelin yard to form a 70 wagon unit, capable of carrying a maximum of 4,100 tonnes.

To move the monster two Alstom class 37000 electric locomotives, one positioned at the front and the other in the middle, were connected by a wireless radio system created by Schweizer Electronic and Createch. This three year project launched on April 1, 2011, with a view to bring these longer trains into commercial service by 2016. To see a video and understand just how big this thing is click HERE.

In other European rail freight news, DB Schenker Rail (UK) has announced additional freight services along High Speed 1 which will carry refrigerated containers of perishable foodstuffs and automotive components from Valencia, Spain to Barking and Dagenham, East London, via the Channel Tunnel. The new contract adds to Schenker’s oversize container service between Poland and the UK. Neil McDonald, Head of Sales for DB Schenker Rail said:

"We are pleased to further contribute to the growth of freight traffic on HS1. The additional services from Spain will add to an already successful operation of twice weekly return services to/from Poland. We have a strong positive relationship with HS1 which allows us to offer new and existing customers the opportunity of transporting goods to and from mainland Europe in wagons which are too large to be conveyed on the UK national network.

"These additional trains will further demonstrate the benefits of using the High Speed 1 rail route to trade with mainland Europe. We look forward to building on our already successful relationship with HS1 to add further services in the future."

DB Schenker Rail's track access contract with HS1 for these additional services is initially for 6 months from the start date, January 13, with both parties intent on continuing the partnership. Nicola Shaw from HS1 said:

"We are delighted to welcome additional DB Schenker Rail freight services onto the high speed line. This is a big step up for freight on HS1, and is an area in which we continue to grow. The new contract demonstrates the value of the high speed network in the UK. Due to size dimensions of the freight, it is something that can only be carried in the UK on the high speed network, offering the shipper a seamless European rail service. We enjoy a good relationship with DB Schenker Rail and have always maintained that a partnership approach is crucial to the long term success of the HS1."

Whilst things seem to be going well for two of the biggest rail freight operators in Europe, Netherlands based intermodal logistics group Husa Transportation, has announced plans to cease operations in its rail freight divisions, Husa Transportation Railway Services (HTRS) Nederland and its German subsidiary HTRS Süd, by March 1 with proceedings underway to sell off the struggling business units, a process which has already reportedly generated a lot of interest.

Although none of the groups other divisions will be affected by this move, this divestment will see 75 employees be displaced, probably transferred over to other operators with existing ties with Husa, along with the subsidiaries contracts together with about 20 locomotives. Speaking to local press, the group’s founder and CEO Rob van Gansewinkel, said the company has become ‘the victim of the ever-rising prices for infrastructure’ and that there is an apparent ‘lack of a level playing field’ within the industry compare to other modes in particular the inland waterways, as they do not pay directly for use of the infrastructure where as rail operators pay the usage fee of infrastructure managers. He went on to say:

“The liberalisation of the railway market for us has failed. It seems that only the former State-owned enterprises and a few large listed groups can survive in this market. We feel after an effort of almost a decade as the famous dog, who has been running circles biting its own tail, but does not move forward.”

Over in Croatia, negotiations have resumed for the privatisation of HZ Cargo after being initially abandoned on January 13. The country’s Ministry of Maritime Affairs, Transport and Infrastructure had been planning to sell a 75% stake in the state owned subsidiary to Romanian rail group Grampet Group but concerns had been raised by Grampet over property rights, ongoing legal disputes and the financial relationship between the railway and its intermodal subsidiary AGIT. Grampet had also become concerned with HZ Cargo’s debt which grew €2.7 million in the last quarter of 2013. In a statement, the Ministry said:

“It is expected that the end of the month we could have a final answer regarding the privatisation of [HZ Cargo]. Given the difficulties in which the company is [in financially] and the importance of resolving the situation in the entire railway sector, it is logical to think [of] alternative solutions in the event of a failed privatisation.”

Photo: The long train approaches as it passes through France.