{"id":244660,"date":"2025-07-01T15:59:38","date_gmt":"2025-07-01T05:59:38","guid":{"rendered":"https:\/\/www.railfreight.com\/?p=63636"},"modified":"2025-07-01T15:59:38","modified_gmt":"2025-07-01T05:59:38","slug":"sharp-increase-in-defence-spending-is-a-real-opportunity-for-rail-sector","status":"publish","type":"post","link":"https:\/\/www.vibewire.com.au\/?p=244660","title":{"rendered":"Sharp increase in defence spending is a \u2018real opportunity\u2019 for rail sector"},"content":{"rendered":"

The prospect of a sharp increase in public spending on defence in Europe represents \u201ca real opportunity\u201d for the rail sector, according to a senior industry source. \u201cMoving an entire army across Europe can only be done by rail if we want to get personnel and equipment there quickly. Roads will certainly provide a back-up and will ensure the final delivery, sort of like intermodal traffic,’ DB Cargo France CEO Alexandre Gallo, told RailFreight.com.<\/strong>
\n<\/span>\u201cOn the other hand, it will be necessary to improve interoperability between countries and free up gauges to allow the heaviest tanks to pass on trains. This will undoubtedly force infrastructure managers, and especially SNCF R\u0117seau in France, to speed up the upgrading of key routes to the widest possible profile\u201d, he said.<\/p>\n

More jobs needed, not only in logistics<\/h2>\n

A study earlier this year by management consultant Kearney estimated that an increase in defence spending to 3% of GDP would require up to 760,000 new skilled workers in Europe \u2013 a clear indication of the size the industry could swell to. Indeed, recently, NATO announced plans to go much further, with member nations making a commitment to spending 5% of GDP on defence by 2035.<\/p>\n

A number of defence industry firms are already pursuing a recruitment drive. Rheinmetall, in Germany, Europe\u2019s largest ammunition manufacturer, is said to be increasing its workforce by approximately 29% (9,000 workers), by 2028. Moreover, waning demand in the automobile industry sees brands, such as Volkswagen and Daimler, eyeing growth in military vehicle production.<\/p>\n

Kearney\u2019s study did not evaluate the impact of increased defence spending on demand for logistics specifically. However, one of its authors, Guido Hertel, noted that in Germany, the authorities had drawn up documents outlining the concept of Drehscheibe Deutschland, which acknowledges the country\u2019s new role as a logistics hub in the event of a large-scale defensive operation.<\/p>\n

\n

\"The<\/p>\n

The CEO of DB Cargo France, Alexandre Gallo. Image: \u00a9 Association Fran\u00e7aise du Rail (AFRA)<\/p>\n<\/div>\n

Challenges and opportunities ahead<\/h2>\n

The German government is allocating additional funds to transport infrastructure development spanning railways, airports, roads and bridges. One of the priorities is to strengthen overland transport, which faces the prospect of having to accommodate more raw materials coming in via the ports.<\/p>\n

FreightAmigo, a digital supply chain finance platform, noted on its website that the emerging boom in the European defence industry was likely to have \u201cfar-reaching effects on the logistics sector.\u201d There would be a greater need for cross-border specialised container shipping and freight transport services, while the industry\u2019s stringent security measures would create new challenges and opportunities for service providers.<\/p>\n