{"id":204216,"date":"2025-04-22T22:22:21","date_gmt":"2025-04-22T12:22:21","guid":{"rendered":"https:\/\/www.railfreight.com\/?p=61799"},"modified":"2025-04-22T22:22:21","modified_gmt":"2025-04-22T12:22:21","slug":"rail-freight-competitors-win-out-against-incumbents","status":"publish","type":"post","link":"https:\/\/www.vibewire.com.au\/?p=204216","title":{"rendered":"Rail freight competitors win out against incumbents"},"content":{"rendered":"

The rail freight market in the European Union has been liberalised since 2007. As a result, new companies have been able to enter the market and compete with incumbents. And they are doing so successfully: the new competitors are claiming ever bigger shares of the rail freight pie.<\/strong>
\n<\/span>In 2023, 55 per cent of the rail freight market was taken up by the so-called competitors, meaning new private companies or foreign incumbents. That is three per cent more than in 2022. Out of that share, new market entrants claimed 40 per cent, whereas foreign incumbents took 15 per cent.<\/p>\n

It is especially the new market entrants that have managed to win out against the domestic incumbents. They grew their share by seven per cent in five years, up from 33 per cent in 2019. Foreign incumbents have not grown the market share as much, staying relatively stable at around 15 per cent. These numbers were presented by the Independent Regulators Group – Rail (IRG-Rail), which reports annually on the state of the European rail market.<\/p>\n

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Screenshot from the IRG-Rail report, showing the growing market share of new competitors and the share of the domestic incumbent per country. Image: \u00a9 IRG-Rail<\/figcaption><\/figure>\n

The future of the rail freight market<\/h2>\n

The expectation is that this trend will continue, says the European Rail Freight Association (ERFA). Domestic incumbents, notably DB Cargo and Hexafret, will have to reduce their activities due to EU Competition Law rulings. Polish national incumbent PKP Cargo is still in restructuring proceedings, which could therefore also give way to other market participants.<\/p>\n

The path for new competitors in the rail freight market seems to be wide open. The EU should act accordingly, argues ERFA. \u201cRail freight is at a crucial moment in terms of volume and profitability\u201d, says ERFA president Dirk Stahl. \u201cThe performance of challengers, especially in growth markets, is impressive. The focus of European Rail Policy must be on favourable market conditions and interoperability in international rail transport flows in growth markets, such as combined traffic, rather than artificially keeping unprofitable and stagnating market segments alive.\u201d<\/p>\n

Market downturn<\/h2>\n

Besides the successes of the new competitors, IRG-Rail noted an overshadowing market slump in its report. \u201cRail freight traffic saw a clear downturn in 2023, due to economic slowdown in Europe. While freight train-kilometres decreased by around 6 per cent, net tonne-kilometres fell by 8 per cent to the lowest level over the last five years\u201d, IRG-Rail writes.<\/p>\n

That contraction in the rail freight market is mostly attributable to a drop in international traffic. Its share fell below 50 per cent since the start of IRG-Rail\u2019s data collection. From 2022 to 2023 national traffic only decreased by 2 per cent, while international transported tonne-kilometres fell by 13 per cent.<\/p>\n

IRG-Rail also found that railway undertaking\u2019s revenue per net tonne-kilometre increased by 15 per cent, and by 12 per cent per train-kilometre. Whereas that may sound like a success, it was primarily caused by the high inflation of recent years. \u201cSince 2022, operators have increased prices to compensate for high inflation in costs (9 per cent and 7 per cent on average in 2022 and 2023 respectively). The increase in average revenue per train-kilometre was driven by cost inflation in countries with high freight transport volumes, such as Poland (+19 per cent), Germany (+14 per cent) and France (+14 per cent).\u201d<\/p>\n