The Future of European Rail Cargo is in the Balance says Freight Group Boss

UK – EUROPE – A recent survey of members by the Rail Freight Group (RFG) has reaffirmed what many already believe as concerns the way rail freight is perceived by those in the field of logistics. One respondent summed up that attitude commenting that most had an innate sympathy for rail as it is ‘the right thing to do’ but commented that unless it improved flexibility, reliability and cost efficiency it would not attract more cargo. Whilst it was accepted that rail handled bulk better than road the need for extending multimodal options to and from the ports was also touched on.

The main bone of contention for the group was the restructuring of Network Rail, from the 120 or so companies surveyed, 72% of respondents feared that regionalisation would not be beneficial for freight. The RFG survey also revealed that members see the lack of available train paths (58%) and shortage of suitable terminals (47%) as the biggest barriers to the growth of the rail freight sector and called for continued support from Government including ongoing investment in rail infrastructure (50%). Maggie Simpson, Executive Director, RFG, said:

“Our members are concerned that freight should get fair and equal treatment in any future restructuring of Network Rail and that safeguards are put in place for businesses to grow their use of rail freight. This includes a strong central system operator function to ensure the continued uninterrupted movement of nearly 800 freight trains a day throughout the UK across all Network Rail’s routes.

“Rail freight is expanding in new markets as more and more customers recognise its benefits in terms of speed, reliability and cost-effectiveness. These customers need confidence that the rail network will continue to meet their requirements however it is structured.”

Meanwhile the RFG Chairman, Tony Berkeley, has been once again expressing his personal view of the current state of European rail freight and passenger services, and, with a very faint touch of irony, complaining that other state run groups are cheating under the current financial subsidy rules. In a recent piece Lord Berkeley points out that while the French Transport Minister is stating transparency in the system is required to show taxpayers where the money goes, SNCF is going to any lengths to kill competition.

Describing SNCF and its German counterpart DB as ‘crumbling monopolies’ he points out that the two countries have conspired to kill off much of the governance parts of the 4th Railway Package that would bring competition and growth to the sector. In this way, he points out, if those two fail it would be sure to ensure no others could succeed either and he further suggests that the European Commission is bowing to German pressure once again and accepting the dilution of the transparency clauses so as to allow DB and SNCF operators to receive subsidies without any disclosure. Berkeley continues:

“There are reports that DB is in severe financial trouble, seeking to sell off parts of Arriva and DB Schenker and cutting 30% of its freight network. Will it sell its assets to competitors to enable them to take it over? Hidden subsidies from DB Netz, itself part financed by the German states, will also help DB buy more rail companies abroad as well as Chinese trains. Trade union IG Metall and the supply industry organisation VDB have complained jointly to the German government about DB’s intention to buy trains and spare parts from China in the next 3-5 years. They argue that it is unacceptable that a German state-owned enterprise buys subsidised Chinese products with German tax payer’s money which jeopardises the German rail industry and its prices. All good reasons for keeping transparency in the 4th Railway Package.

“[Meanwhile] the general rail situation in France has clearly got worse as a result of the reintegration of SNCF and RFF into a vertically integrated monolith that does not seem to know what it is doing. SNCF is also in trouble financially, so their easy way out is to put up access charges, using the extra cash to subsidise its incumbent operators and preventing by all means any fair competition with other passenger or freight operators. Increases in passenger fares and freight access charges are driving customers to road.’

We have heard previously how state managed companies have been diverting funds from one profitable part of their operations to shore up other loss making sectors and how this goes directly against EU regulations. Tony Berkeley demands to know what many others are asking - where is the competitive single market to which EU institutions and members states have signed up? A point even more relevant as the UK seeks to renegotiate its terms of membership and then to await the judgement of the people in the forthcoming referendum.