the voice of european railways rmms 11 th meeting – 03 december 2004, bruxelles 1 rail freight...

The Voice of European Railways

RMMS 11th meeting – 03 December 2004, Bruxelles 1

Rail Freight Quality Report

3 December 2004, 11th Meeting of the

Rail Market Monitoring group



CER – general positions on freight

CER supports the opening up of the freight market in 2007 – more competition will strengthen the rail freight business, giving more business for us all..

CER recognises the key role of quality, including punctuality, in providing an attractive service for customers



Background

One year on….

Autumn 2004:

CER Update report published

Summer 2003:

CER-UIC-CIT Charter adopted



Developments in the rail freight market

One year on….

1. market performance

2. emerging trends

3. results on quality

4. what do we learn?




One year on….


2. emerging trends





Rail freight aggregate output

0

10

20

30

40

50

60

70

80

90

100

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2000 2001 2002 2003 2004

EU-10

EU-15+CH+NO

TOTAL

Billion ton-km per quarter

Source:UIC



0

5

10

15

20

25


2000 2001 2002 2003 2004

Four largest operators in Western Europe

FS

SNCF

DB

UK FOCSource:UIC




..and in Central and Eastern Europe

0

2

4

6

8

10

12

14

16


2000 2001 2002 2003 2004

PKP

LDZ

LG

CD

Source:UIC




Relative to the economy

% change on 3rd Quarter of 2003

-6

-4

-2

0

2

4

6

8

DB SNCF FS RENFE PKP CD

t-kms GDP Industrial Production

Source:UIC and The Economist




One year on….


2. emerging trends





Trend 1: rationalising operations

SNCF in focus

Billion Tonne-KilometresPer Year

0

5

10

15

20

25

30

35

40

45

2000 2001 2002 2003

conventional

combined

Source:SNCF



Trend 2: stable prices

86

88

90

92

94

96

98

100

102

104

106

108

1998 1999 2000 2001 2002 2003

ROAD

RAIL

Price Index2000=100

Source:UK Office forNational Statistics,CSPI

Importance of Eurovignette Directive



Trend 3: greater product differentiation

Railion in focus

Offering different price/quality mixes

Spring 2003 – 3 new block train products

PlantrainsVariotrainsFlex-trains

Autumn 2003 - 2 new single-wagon load trains

ClassicQuality

Spring 2004 - block train offer extended to NL and DN

Some customers preferlow price option

68% of customerssurveyed prefer a low price-low performance deal for single-wagon load



Trend 4: more information for customers

Several members adopt GPS systems

• track and trace wagons in real time• customers see information every few minutes via secure website• issues remain over accurate prediction of arrival

time, if an incident occurs



Trend 5: new markets emerging

“Our aim is to provide a next day delivery service on all our parcels which is becoming increasingly more difficult on the congested road system where truck speeds are diminishing. Therefore we have beenputting the long-distance parcels on high speed trains”

Securicor Omega Express, UK.

Parcel traffic, retail sector, logistics…



Trend 6: political support grows

Rail freight is popular!

A UK survey conducted in December 2003 found 79% of people identified transferring freight off roads onto rail as a priority for Government in tackling congestion on motorways.

This was more than 4 times the number in favour of building more roads.




One year on….


2. emerging trends





Increased use of Quality Clauses

25%30%

40%

55%

21%24%

0%

20%

40%

60%

80%

100%

Total Freight CombinedTransport

ConventionalTransport

2003

2004

PercentageOf business Covered by Quality contracts

Survey of CER members



Improved punctuality

Punctuality of UIRR international combined transport trains(with one hour tolerance margin)

71%

56%

50%

56%

65%

69%

0%

10%

20%

30%

40%

50%

60%

70%

80%

1999 2000 2001 2002 2003 2004 (6 m)

In general for UIRR international trains



Improved punctuality

CER Corridor number 5: Antwerp-Basel

LINE Via RU AVERAGE

2002

AVERAGE

2003

BE/IT Bettembourg/Basel/Luino

SNCB/CFL/SNCF/SBB/FS

58,1% 78,4%

BE/CH Bettembourg/Basel

SNCB/CFL/SNCF/SBB

71,6% 79,8%

BE/FR Sterpenich/Bettembourg

SNCB/CFL/SNCF 70,8% 84,1%

Interoperable locomotives (T13/3000) introduced in 2003

New dedicated freight line: Athus-Meuse opened in 2004Punctuality up to 90 percent expected




One year on….


2. emerging trends





Analysing the causes of delays

Danger in superficial analysis

We currently measure a subset of the market (UIRR trains). This leads to incentives for IMs:

1. In timetabling, to give the monitored trains ‘better slots’ than non-monitored trains.

2. If incidence occurs, priority given to monitored trains.

3. ‘Ticking boxes’ measurement is superficial e.g. ‘missing locomotive’. But why is it missing?



What do we learn?

1. Quality can be improved by more efficient use of existing infrastructure

But this is limited by existing priority rules and infrastructure in much of Europe.

Delays are inevitable if the network is congested, and priority is given to passengers

Freight operators need the possibility to buy train paths to run trains during the day over long distances in Europe.



What do we learn?

2. In many cases, operators cannot insure themselves against the risk of infrastructure failure. Therefore they cannot offer quality clauses at a competitive price.

Rational operators will only accept risk from compensation contract if they can pass on any risks which they themselves are not able to control.

Without secure infrastructure funding, IMs too are unlikely to accept risk.



What do we learn?

3. Infrastructure remains key – the Swiss example

% freighttrains arrivingless than 30 minutes late

50

55

60

65

70

75

80

85

90

95

100

Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec.

2003

2004



What do we learn?

3. Infrastructure remains key

Bottlenecks in 2015 with currentInfrastructure capacity

Bottlenecks in 2015 with all futureplanned investments, including TENs

Source: UIC CTG and UIRR Study of infrastructure capacity reserves for combined transport by 2015.



Conclusions

Quality increased since Charter signed

Operators can improve performance, but concerns remain:

• Monitoring root causes of delay

• Priority rules (regionalisation of policy)

• Risk-sharing rules between IM and RU

• Quality infrastructure remains necessary, if not sufficient, condition for a competitive rail freight market



Thank you

Report available at www.cer.be

Edward Calthrop

00-32-2-213-0839

[email protected]



Annex: Finland

90% punctuality (<15 minutes)

the voice of european railways rmms 11 th meeting – 03 december 2004, bruxelles 1 rail freight...

Documents

th meeting

uic slide

quarter slide

sncf slide

rail freight market

economist slide

freight cer

rail freight business