The sudden closure of the Rhine Valley Alpine rail track in southwest Germany on August 12 due to emergency construction work on a collapsed tunnel could not have come at a worse time for Europe’s rail freight industry as its customers scramble to book trucks to prevent their supply chains collapsing.
With the track that links Rotterdam, Europe’s top container port, with its industrial hinterland, not set to open until October 2, the rail industry risks a permanent loss of business to road transport.
The shutdown has snapped the key corridor between North and South Europe causing major disruption across many industries. Cofindustria, Italy’s employers’ association estimates the country’s exporters need an extra 20,000 trucks a week to replace the suspended train rail services.
Companies are finding it extremely difficult to schedule regular road-rail services, as the alternative rail routes cannot cope with the diverted traffic and are handling only about 25 percent of the normal volumes on the Rhine route. “This is particularly the case for small- and medium-sized forwarders and logistics companies who have moved the bulk of their services to rail and are taking a financial hit day after day,” said Kombiverkehr, Germany’s top intermodal operator.
The closure of the Alpine track, which handles around half of the trade between northern Europe and Italy via Switzerland with more than 200 trains a day, has traumatized the intermodal business. Decades of investments in the rail system “will be damaged or destroyed” and it will not be possible to win back cargoes lost to the road “for years,” warns Hupac, a Swiss intermodal operator that runs around 110 trains a day with their own rail wagons.
All this at a time when rail continues to shed market share to trucks despite attempts by environmentally conscious governments to divert freight traffic from Europe’s increasingly congested highways to greener rail tracks and inland waterways.
It is not just underperforming rail that is shifting freight to trucks, as ongoing barge congestion at Rotterdam and Antwerp, Europe’s second largest container hub, has tarnished inland waterways’ reputation over the past year.
Ironically, rail freight is increasingly hitting the mainstream headlines amid the growing hype over China-Europe services with reports of every arrival of a single train in London, Milan or Hamburg — with 40 containers — suggesting it is the transport of the future.
The reality is that trucking has a 70 percent share of Europe’s transport market and there are no indications that it is going to lose out to barges or rail wagons any time soon.
However, rail still enjoys a high profile, particularly across the north European waterfront with ports and terminal operators doing all they can to divert cargoes from trucks. The port of Hamburg was thrilled over a 1.5 percent rise in rail traffic to 46.4 million tons in 2016 that bucked the negative trend in rail cargo volume across Germany. Even more impressive was a 2.4 percent in container rail traffic to 2.4 million TEU, which raised rail’s share in the modal split from 41.6 percent to 42.4 percent, consolidating Hamburg’s position as Europe’s top rail port with more than 200 services every day.
The neighboring Bremen/Bremerhaven ports made expansion of railway infrastructure the key priority for 2017 with several new tracks due to come into operation by the end of the year and more to be added in the coming years to keep pace with rising traffic.
Bremerhaven needs to boost its attraction as a port and logistics center, with container volume dipping 5 percent in the first half of the year to 2.7 million TEU.
Leading German container terminal operators are reporting higher rail volumes but their road transport is growing even faster.
HHLA, the top Hamburg stevedore, booked a 5.9 percent rise in rail traffic to 568,000 TEU in the first half of 2017, but this was outpaced by an 11.8 percent increase in road transport to 176,000 TEU.
Bremen-based Eurogate, Europe’s largest terminal operator, saw rail traffic slip at its German facilities to 560,305 TEU in 2016 from 556,879 TEU in the previous year while truck transports surged 11.6 percent to 84,790 TEU.
However, rail still has a strong pull with European ports despite recent setbacks and negative publicity. Liverpool, which opened a new £400 million ($ 528 million) container terminal last November, said it is about to launch an integrated rail “package” offering shippers a “seamless” route from the quayside to any UK destination served by major rail companies.
Peel Ports, Liverpool’s owner, has also called for significant investment in the “Victorian-era” rail infrastructure on the UK’s east-west corridor. “There are generally good connections on routes heading north and south, but cross-country is a real problem,” said Gary Hodgson, the company’s strategic projects director. “It’s long overdue that the east-west infrastructure was brought into the twenty-first century so we can expand rail freight usage and reduce the impact of longer-distance road haulage.”
The port of Antwerp is seeking to improve rail connectivity with Germany’s Rhine-Ruhr and Rhine-Main industrial area, one of its leading markets that mostly uses inland shipping, but also ships a “great deal” by road. The port Authority has lent financial support to companies to launch new rail services to Poland, the Czech Republic and Austria, and earlier this year helped H&S Container Line to double the frequency of its service to and from Germany.
Rotterdam, meanwhile, is spending €275 million ($327 million) to reroute just two-and-a-half miles of rail track from a bridge in the port so that shipping and rail traffic “will cease to get in each other’s way.”
Meanwhile, the Dutch rail network manager ProRail, is gearing up to trial automated trains on the Betuweroute, a €4.7 billion dedicated freight track between Rotterdam and Germany, which opened in 2007 but has yet to fully live up to its goal of moving cargoes off the roads as construction work is still going on across the border.
The challenge facing rail in its battle with trucking is highlighted by the performance of the 110-mile trans-Alpine route connecting France and Italy via the Frejus tunnel. The service, operated jointly by the French and Italian state railways, is carrying less than 30,000 trucks a year, just 2 percent of trans-Alpine road freight transport.
Could it get any worse? Yes, if the Rhine Valley route is still shut on October 3.