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Global Rail Freight Expansion needs, plans and initiatives

A European Shippers’ Perspective

Nicolette van der Jagt

Secretary General

European Shippers’ Council

New Delhi, India, 22-24 March 2007

AGENDA

European Shippers’ Council What the customer requires Global Logistics trends Barriers/Problems Solutions Way forward

ESC

• National organisations representing interests of shippers

• Cargo owners as users of freight transport services in all modes of freight transport

These are manufacturing industries that are producing goods for consumption in the single market and beyond

WHAT SHIPPERS REQUIRE

Profitable and sustainable trade and industry through efficient logistics by:– QUALITY: reliabilty and punctuality – Competitive pricing– Door to door solutions – Focus on efficient supply chains/not on intermodality

per se Rail Specific

Transit time equal to road transport Cost close or beating road transport costs

INDUSTRY TRENDS

Fierce global competition Quality and adding value in transport most

important but also focus on costs Sourcing from the best supplier: globalisation Outsourcing Logistics becomes part of the production

process

Ever larger containerships……

INDUSTRY TRENDS

• Reducing inventory

• Reducing depots/sites/warehousing

• Reducing empty mileage

• Improved agility and cost: shortened logistics

cycle time due to short product life cycles and

value of goods

• Improved reliability

CONFLICT!

• Environmental pressures

• Local emissions• Noise• Social Regulation:

Working Time• Safety & Security

• Reducing inventory

• Reducing depots/ sites/

warehousing

• Reducing empty mileage

• Improved agility and cost

• Improved reliability

SITUATION TODAY

Rail preferred mode of transport for- High quantity of cargo - Dangerous goods

Road freight is under pressure

Inland waterways and SSS often not located to the plant/warehouse.

RAIL FREIGHT SEGMENTS

FULL TRAIN Coal Steel Construction

~ 35% Competition from Inland waterways

SINGLE WAGON CHEMICALS

VEHICLES

MACHINERY

~ 50% Focus on road

Market entry difficult for newcomers

INTERMODAL FINISHED/

CONTAINERISEDCARGO

~ 15% Focus on Road

Container transport booming

BUT SUFFERING FROM:

Lack of customer orientation Monopolies Weak logistics integration Priority given to passenger transport Absence of transnational corridors (except

Rotterdam-Genua corridor) No real open access to infrastructure (

RAIL FREIGHT IN EUROPE

Prices for rail freight are rising Singe wagon load:

Prices high Quality is down Difficult to offer for newcomers

Difficult for customers to launch their own rail company

SOLUTIONS?

Continue to open up the Rail Market/More effective enforcement

Improve Quality of Service! Increase European wide railway strategies and a

business oriented corridor appraoch Increase in road tolls is no solution: increasing

freight logistics costs is harmfull for EU competitiveness (compare 12% of GNP compared to 8,5% in US)

A POSITIVE SCENARIO

No more monopolies Real open acces to rail infrastructure No non-commercial stops at boarders

EUROPE RAILFREIGHT NETWORK CONCEPTEUROPE RAILFREIGHT NETWORK CONCEPT … … and then to Russia and Chinaand then to Russia and China

A POSITIVE SCENARIO

Railway could take a part of the market share In a few years train may be running smoothly between Europe and Asia. - Sea route is approx 10 days longer

CHALLENGE in overcoming capacity problems and costs disadvantages

A positive scenario possible if:

Improved communication between all the supply chain

Measuring the performance Demand/Customer driven transport

providers: New products/service culture

MEASURE PERFORMANCE

• Standard measures of performance

– Air freight– Short-sea– Rail freight?

• If you cannot measure it you cannot manage itPLUS…

• Cross-sector/modal comparisons• Sign of maturity, responsibility, quality management!

CHANGE CAN TAKE TIME

Liner Shipping- 20 years for change!

“The man who moved a mountain is the one who started moving away a small stone”

(Chinese verb)