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A successful Intermodal Rail CorridorHamburg � South East European Countries

Key Factors and Best Practices

Madrid, 12th November 2009

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1. Key success Factors of Railway Supply Chains

2. Volumes and Volume Balance

3. Points of Consolidation

4. Integrated Rail-Roading

5. Impact of Liberalization

6. Summary

Content

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Introduction

� Railways grew traditionally in conventional business

� Intermodalism in Europe started not with the first Container arriving in Bremen in the late 50�s

� Only �Eckelmann�, the owner of a bulk port area in Hamburg (Eurokai), started investing in port facilities to handle containers in the early 60�s, while anybody around him was smiling: �What a crazy guy!�

� Eurokai, today Eurogate, became the largest container terminal operator in Europe

� Rail started 6 years later in 1967 to transport the first containers

� The rail share of containers compared to road was far less than 10% overall in Europe

� Only with the upcoming Liberalization in the central European States in the early 90�s, private activities and competition, the modal split grew in favor of rail

There are 4 key factors for success in rail transport: Volume �Consolidation � Supply chain orientation - Competition


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6. Summary

Content

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Rail�

� � is competitive transporting 1.000 tons or >70 TEUs

� � is competitive transporting with regular frequency (5 days a week)

� � needs constant high utilization because of the high share of fixed costs

� � needs outbalanced flows to cover costs and to keep frequency

� � needs more planning activities than road

� � creates higher supply chain complexity

� � needs smart order management � �JIT should not degenerate to the stupidity to order in time!�

� � needs consolidation of volumes to create the necessary mass of transport

� � has plenty of market opportunities (corridors) to gain business

Success to gain volumes is a question of consequent management


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Modal Split in 2007

� Dominant role of road in Spain

Road got the image to be flexible and cheap

Infrastructural limitations (gauge, energy, train length, incline, etc.)


100100Total

12,40Waterways [%]

21,93,9Rail [%]

65,796,1Road [%]

GermanySpain

Huge potential for rail transport not used at all

65,7

21,9

12,4

96,1

3,9 0

Waterways

RoadRail

Source: Eurostat

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Growth Factor Hinterland Connectivity

� Bremen/Hamburg port operators started in early 1990�s with private rail operations

� Open access to all railway companies leads to early competition with German state railway and as consequence increased service quality

� Drastic reduction of rail prices is one consequence

� Transport flows strictly concentrated on a few numberof Hubs in the Hinterland

� Strong improvement of rail competitiveness compared to road


Hamburg achieves higher and continuous growth in container business because of its attractive hinterland connections

0

2.000.000

4.000.000

6.000.000

8.000.000

10.000.000

12.000.000

1995 1997 1999 2001 2003 2005 2007

[TE

U]

Rotterdam Antwerpen Hamburg

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Hinterland of Hamburg

Consequent management of rail activities grew the business

Trains per Day

86 98

122

296

0

100

200

300

400

Trains 2005 Trains 2015

Conventional Container

+ 186 Trains

+ 90 %

� The development is driven by development of container traffic

� While container volume doubled, rail volume grew 4 times!

PortHamburg

Italy

Scandinavia

GermanyEastern Europe


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European Intermodal Network

� Dominant role of volumes in North/South direction

� Almost no rail activities of south European ports on rail

� Except of the Betuwe Line all corridors use existing rail infrastructure


Madrid

Source: UIR, Kombiconsult

Inland TerminalsSea Ports

To gain rail volumes is not mainly a question of infrastructure!

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Optimal Connection between Port and Hinterland






6. Summary

Content

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Corridors need Consolidation Points

� Container hinterland transportation is the ideal example for rail corridors

� Corridors needs a high level �entrance� and �exit� - terminals

� Terminals and their surrounding markets are consolidation pointsalong the rail corridors

Sea ports with well integrated intermodal terminals

Transshipment terminals for rearranging of containers

Hinterland hubs and satellites for local supply


Corridors are defined as the link between strong economic areas

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Hinterland Terminal Types

� Different terminal functions lead to different requirements to the terminal layouts

� Inland ports can also provide the move from barge to road/rail (trimodal)

� STS-Cranes

� RMG

� > 500.000 TEU

� Move Sea/Rail & Sea/Road

� Serving local shippers

� Interim storage for surrounding companies

Sea Port

� RMG� RMG / Reachstacker

� ReachstackerEquipment

� > 250.000TEU� > 100.000 TEU� ≤ 50.000 TEUVolume

� Move Rail/Rail� Move Rail/Road� Move Rail/RoadFocus

� Sorting and distribution of containers

� Short term buffering

� Serving of the region

� Interim storage

� Serving local shippers

� Interim storage for surrounding companies

Function

Transshipment Terminal

Regional Hub / Hinterland Hub

Satellite


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Example of a Sea Terminal as an Entry Gate

�Guarantee short and flexible delivery from waterside to hinterland

�Guarantee fast transfer of cargo

�Enable high train frequency reducing connections to hinterland hubs


30 m

About 500m back reach

As better rail is integrated in port operations, as more attractive are rail connections compared to Road

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Eurokombi as Entry Gate to Europe

� Mayor terminal in Hamburg

� 140 Ha area

� 21 STS-cranes at the berth

� ~3 Mio. TEU in 2008

� Provides an integrated rail terminalfor hinterland connection

5 Tracks

4 RMG

2 Reach stackers


Modern layout, modern infrastructure meets feasible volumes

Good connection to the rail net = rail share 20%!

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Example of a Hinterland Hub

� Communicating modules

� Focus on hub function for regional volumes

� Provides storage area for interim storage

� Good access for trucks for moves from rail to road


52 m

3 m 12m 7m 9m 3m 9m9m

Module wise layout for a volume oriented development

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Example of a Transshipment Terminal

� �Transshipment Modul� with high number of tracks for rail/rail moves

� �Access Modul� to serve from road to rail and v.v.

� External area for value added services can be served by reachstackers


9m

52 m

3 m 12m 7m 9m 3m 9m

Transshipment-Module

Can be developed step by step: local terminal � hub - transshipment

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Nuremberg as Gate Way to Eastern Europe

� Nuremberg is a hinterland hub with additional transshipment shares

Ideal consolidation point for volumes from Hamburg/Bremerhaven to move to Austria, Italy and Eastern Europe

� Success factors

Geographical position at the rail corridor to South and East Europe

Feasible rail infrastructure in all directions

Modern terminal layout with efficient processes

Transparent tariff policy an discrimination free access for all rail companies


Good management develops a successful terminal from a ideal starting point

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KTL � Kombiterminal Ludwigshafen

Success Factors:

� Module wise construction referring to the volume development

� Communicating Modules

Details:

� 2 Modules

� 8 Tracks

� 4 communicating cranes

� External area for trailers'

� Integrated warehouse concept


Integrated and extendable concept based on the logistics needs

Start 2000 = 70.000TEU/2009 = 350.000TEU/2015 = 800.000TEU!

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6. Summary

Content

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� Max train length differs from country to country

Spain actual still 450m, but activities to increase

Germany 700m


UIR / Russian Broad Gauge

UIRUIRUIR / Iberian Standard

Gauge

600m750m700m~450mMax train length

C3 - 20 tD4 - 22,5 tD4 - 22,5 tD4 - 22,5 tTrack class / Maximum axle load

25 km/h35 km/h 40 km/h 30 km/hAverage Speed*

PolandFranceGermanySpain

Quality of infrastructure is not a Key Success factor as far as train length of min. 600m could be provided and�

*all trains, not only intermodal trains

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�is managed properly

� the Constraint �Gauge��


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Based on the above shown parameters calculations for trains with400m, 600m and 700m length will be done


Constraints � Maximum Train LengthImpact of train length on cost � calculation parameters

� Container trains on a distance of 400km� 1 roundtrip/day� 250 trains/year

� Loco: 1 Vossloh Euro 4000 (0,4 bln EUR/year)� Wagons: 2 wagon sets with 80`-Container wagons (30 EUR/day)

� Diesel cost: 0,78 EUR/l� Access charge: 0,17 EUR/km� Loco driver cost: 20 EUR/h

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Economies of scale for longer trains result in cost reduction of 24% for 600m trains or 31% for 700m trains compared to 400m trains.

Scenario 400m Scenario 600m Scenario 700mPlanning parameters Maximum train length [m] 400 600 700

Distance [km] 400 400 400Average speed [km/h] 50 50 50Transit time [h] 8 8 8Train rotations/day 1 1 1Train rotations/week 5 5 5Weeks/year 50 50 50Train rotations/year 250 250 250

Assets Loco type Vossloh Euro 4000 Vossloh Euro 4000 Vossloh Euro 4000Number of locos 1 1 1

Wagon type SGGRSS 80 AAE SGGRSS 80 AAE SGGRSS 80 AAENumber of wagons/train 14 21 25Number of wagon sets 2 2 2

Number of wagons total (incl. 10 % reserves) 31 46 55

Gross weight per train [t] 823,20 1.234,80 1.470,00Train length [m] 396,82 583,72 690,52TEU/train 56 84 100

Volume allocation Planned capacity [TEU] 14.000 21.000 25.000

Cost allocation Total loco cost/year [EUR] 400.000 400.000 400.000Total wagon cost/year [EUR] 339.450 503.700 602.250Fuel cost/year [EUR] 780.000 858.000 904.800Total loco driver cost/year [EUR] 100.000 100.000 100.000Total access charges/year [EUR] 34.000 34.000 34.000Total cost of concept [EUR] 1.653.450 1.895.700 2.041.050Costs per TEU rotation[EUR] 118,10 90,27 81,64Impact on costs per TEU rotation [%] -23,57 -30,87


Constraints � Maximum Train LengthImpact of train length on cost � calculation results

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�Private rail operator founded in 2000

�Focus on hinterland connections from the big German sea ports

�In 2007 BoxXpress handled 385.000 TEU via Rail

� Shareholders:

1.ERS Railways B.V., subsidiary of MAERSK LINE, (Shipper)

2.Eurogate Intermodal GmbH, subsidiary of EUROGATE Group (port operator)

3.TX Logistik AG: 51% Trenitalia(railway company)

One-stop-shop is a Key success factor


Successful operator - BoxXpress

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Hinterland Hub

Main Line

Sea Port Terminal


Final Road Haulage

�Port operations (Rail Handling

�Terminal operations in the Hinterland

�Train operations

�Fleet management (locos and wagons)

�Local road distribution

�Tracking and tracing

�Empty container management

�Maintenance

Supply chain management along the whole transport

Organization Structure along the Supply Chain

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Impact of Liberalization on Rail Transport

� New players mean alternatives for the industries (for example in cases of strikes)

� New alliances and structures of cooperation

� Increased competition leads to increased quality and productivity

� Horizontal competition increased even vertical competitiveness

� Competition reduced the costs, pricing more competitive compared to Road

Establishing liberalization offers great chances for the Rail industry


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Source: IBM Global Business Services, Rail Liberalisation Index 2007

Rail Liberalisation Index 2007

In most countries external railway carriers are already licensed and involved in freight transport.

The liberalisation is advanced in Great Britain, Germany, Sweden and the Netherlands.

The market opening in Luxembourg, France, Greece and Ireland is delayed.

All the countries examined have been gradually opening their rail markets since the last survey in 2004.


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Liberalization is in Progress

Source: IBM Global Business Services, Rail Liberalization Index 2007

AdvancedOn ScheduleDelayed� Providing non-discrimination access to all parties

is obliged due to the EU-Directives

� Due to this, even all private rail infrastructureproviders have to guarantee open access

� Infrastructure fees needs to be non-discriminatoryand competitive

Where liberalization is realized - rail gained market share!

Separation of network and operations

Competition on the network

Non-discriminating Access

DuisburgAntwerpRotterdamHamburg


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Benefits of Liberalization

There is significant correlation between grade of Liberalization and Growth.

Market share of new railway companies and development of rail volumes

-10

0

10

20

30

40

50

60

70

80

UK NL CH A D B I F

Share of new railwaycompaniesGrowth between 1995-2004 in billion tkm

Source: European Commission, Eurostat


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The German ExperienceTraffic Performance in Rail Transport in Germany (in bln tkm)

CAGR 2003-2008: 32,9 %

CAGR 2003-2008: 2,9 %

CAGR 2003-2008 total: 6,3 %


79,2 83,1 81,789,5 92,1 91,2

5,98,8 13,7

17,522,5 24,5

0

20

40

60

80

100

120

2003 2004 2005 2006 2007 2008

Liberalization causes a new market situation�

private rail carriers

Deutsche Bahn Group

Source: TransCare based on Deutsche Bahn Competition Report

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The German ExperienceDevelopment Average Price Level at Deutsche Bahn Group (in �-ct/tkm)


�with decreasing prices and�

3,50

3,70

3,90

4,10

4,30

4,50

2003 2004 2005 2006 2007 2008

nominal

real

-13,69%

+5,34%

Source: TransCare based on Deutsche Bahn Annual Reports 2003-2008

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The German ExperienceDevelopment productivity at Deutsche Bahn Group (in EUR/Capita)


�the challenge to increase productivity.

0

20

40

60

80

100

120

140

160

180

2003 2004 2005 2006 2007 2008

+26,62%

Source: TransCare based on Deutsche Bahn Annual Reports 2003-2008

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Ports are not providing integrated rail terminals for intermodalhandling

Road market is not interested in rail

Railways are not really in competition � lack of private operators

Industry does not care � as far as road delivers

Nobody is taking consequently the initiative

There are great chances for rail transport in Spain! Small share of rail in transportation

Reasonable volumes

Long distances

Huge investments in infrastructure

Interest of big European players in Spanish market

Significant increase of intermodalism is possible

6. Summary

The lack of intermodal Transports in Spain is �House-made�

a successful intermodal rail corridor -...

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