Modal shift, modal shift, modal shift. It is perhaps the single biggest buzz word in rail freight these days. In Spain and Portugal, rail still occupies a small part of the total freight market. What is being done to change that and is there any progress?
Rail freight still plays an only marginal role in cross-border Iberian logistics. The total volume of freight being put on the rail grew in the years following the 2008 financial and euro crisis. Yet, since 2014, there barely has been any growth, and a slight decline is noticeable in the years leading up to 2022, the most recent data point in a report by the Spain-Portugal Cross-Border Observatory.
Cross-border rail freight between Spain and Portugal is, unsurprisingly, entirely limited to bilateral trade. In the period between 2010 and 2022, only in 2012 and 2013 did some Portuguese international rail freight go to destinations beyond the Iberian peninsula, for a total of around 95,000 tonnes: rookie numbers.
By contrast, the road sector has grown, although it clearly has its ups and downs. Despite that, pandemic year 2020 still beat low point 2012. One can see a modest growth trend for road freight between Portugal and Spain.
Key to note here is that the road captures magnitudes more goods than rail does. It is clear that cross-border Iberian rail is lagging far behind: it is around 14 times smaller than the road freight volume between Spain and Portugal.
The end result: rail only captures a 3% modal share of total cross-border freight traffic as of 2022. The road sector walks away with 86% and maritime manages to get 11%.
The upside of the story
Fortunately for rail, there are plans and projects to improve the situation and allow for rail to claim a bigger share of the pie. Building upon an earlier plan called Ferrovia 2020, Portugal has now incorporated rail into its National Investment Programme 2030 (PNI 2030).
As part of the Ferrovia 2020 programme, the Aveiro (northern Portugal) – Vilar Formoso (Spanish border) railway modernisation should finish in this year, enabling 740-metre trains. Another new electrified single-track railway is also currently under construction between Evora and Elvas, leading to Badajoz, Spain.
PNI 2030 adds to that, focusing on upgrades along the northern (Leixões/Aveiro–Vilar Formoso–Salamanca) and southern (Sines/Lisbon/Setúbal–Caia–Madrid) Portuguese corridors. Those upgrades aim at improvements in reliability, shorter travel times and lower operating costs, as well as boosting intermodal links between ports, logistics hubs and the rail network, in particular by working on interoperability.
What about Spain?
Spanish works mirror those Portuguese efforts in pursuit of interoperability. The country is working to create longer stretches of electrified railways connecting to Portuguese corridors. Especially on the most important route, through the Vilar Formoso/Fuentes de Oñoro border crossing, works are in progress for electrification, signalling and gauge adaptation.
Also in the north (Galicia) and south (Sevilla-Faro) there are studies ongoing for future railway lines.
All in all, there is a long way to go for Iberian rail freight. The good news is that there are works ongoing to mitigate common cross-border issues, so that rail freight can be more competitive and win out against other modes of transport. More connections, better operability, and cutting costs and travel times will help the sector going forward.
The coast is not quite clear for rail freight, however. Threats may come from elsewhere. Read, for example, how bigger trucks can undermine the modal shift.