Single Wagon Load, not yet efficient in Romania

Mar 18th, 2010 | Category: Articles, March10, Recommended

With an annual traffic volume of around 100 billion tonnes/km, Single Wagon Load (SWL) covers half of the total volume of freight carried in Europe. SWL is very important to the economy of many European countries, dominated by a strongly divided industry and agriculture. However, SWL is not profitable. The economic crisis led to an increase in single wagon load, but this increase was not enough to revitalize this system. In Romania, SWL represents only 1/10 of the transport market, mainly because of the poor state of the infrastructure, which generates increased travel times, as well as the lack of modern switchyards and terminals. Railway Pro has put together an interview in order to discover the prospects of this type of transport in Romania.

Customers resort to single wagon load when they want to carry one or more wagons in a pre-established time frame, but they don’t have enough cargo to fill an entire train. Based on the same principle, operators decided to attach single wagons to a train with several wagons in order to save time and money and to have the locomotives operate at optimum traction parameters. What is essential for the success of a SWL system is cargo selection and distribution. Loading takes place in switchyards or depots. The wagons can be attached before the train reaches its destination. This makes SWL very special and it depends highly on the technical features of the cargo loading facilities. Some countries, especially in the former CIS region, restrict SWL to international traffic, because customs control and cargo reception take a long time and also because they require more personnel than in the case of Block Train Load (BTL). The current market share of SWL in international traffic is lower than in the case of domestic traffic. The European Union has decided to support SWL and is currently working on several strategies meant to simplify the customs control in EU member states, as well as the beaurocratic and technical procedures related to single wagon load. Experts believe that SWL is more profitable in international traffic due to the large distances, which reduce the travel time, as well as the time necessary to assemble the cargo trains in specialized terminals. One of the main advantages of SWL is the flexibility provided for the customer, who can choose the load. Practically, the customer is free to choose the number of single wagons and also is able to change the quantities on a daily basis, based on the commercial requirements. At the same time, the customer can increase or reduce the load, without significantly altering the travel time. This flexibility can also be encountered in road transport. That is why, by promoting SWL, the railway sector can cover some of the flaws and thus engage in a fair competition with the road sector. A big disadvantage of BTL, but an advantage for SWL, is the fact that the customer is forced to lease the entire train, even though not all the wagons carry cargo.

In Romania, Single Wagon Load represents only 5-10%

In Romania, operators avoid this type of transport. SWL holds extremely low percentages on the Romanian market, compared to other European countries. The lack of a modern terminal network and high-performance train equipment determined a market share of only 5-10% for SWL. Amedeo Neculcea, Commercial Manager GFR, said that only 5% of the company’s activities involve single wagon load. In case of Servtrans Invest, the percentage is even smaller, as shown by Sorin Zbengheci, Marketing Manager. In Europe, one of the main features of SWL is the type of cargo, which most of the time differs from that of BTL. While in case of BTL the predominant cargo includes oil products, grains and construction materials, in case of SWL the cargo comes from the light industry (textile, food products). In the US, SWL cargo includes perishable goods, such as fruits and vegetables, food products etc. According to Sorin Zbengheci, the railway operators in Romania could be able to use this type of transport. He claims that Servtrans owns refrigerated railway wagons capable to carry any type of perishable goods. However, the poor state of the Romanian infrastructure and the uncertain travel time in case of a cargo transport on the Romanian railway network makes it impossible to attract customers, who, in fact, prefer road transport for this type of activity.

Operators in Western Europe form alliances to develop SWL services

In Western Europe, the railway operators have joined forces to support single wagon load. To that end, on February 18, 2010, 7 railway freight operators signed a new alliance in Zurich for the improvement of SWL services. The founding members of the Xrail alliance are: CD Cargo (Czech Republic), CFL Cargo (Luxembourg), DB Schenker Rail (Germany), Green Cargo (Sweden), Rail Cargo Austria (Austria), SBB Cargo (Switzerland) and SNCB Logistics (Belgium). “Single wagon load is very important to the European freight transport sector”, said Johannes Ludewig, Executive Director CER. “We welcome the foundation of the Xrail alliance as a major step made by the member companies and we are certain that this new alliance will have a major contribution to the organisation of railway freight transport services at international level, through a customer-oriented policy and an increased competition with road transport”, added Ludewig. With an annual freight volume of approximately 100 billion tonnes/km, almost 50% of the total volume of freight carried by rail at international level is carried in single wagons. The members of the new alliance agreed on creating a complete information system and production standards in order to ensure an improved transport system. Aside from a better organisation and a high level of punctuality, customers will also benefit from an automated electronic information system. The first tests on the Xrail network have been successfully finalized. In 2010, over 200 railway lines of strategic importance will be opened in Scandinavia, Germany, Switzerland, Austria and Belgium.

Eliminating customs control may help develop cross-border SWL traffic

What insights does the National Association of Private Wagon Owners in Romania (AVPR) have on the subject and what are the obstacles that stand in the way of SWL development in Romania? We managed to find out the answers to these questions, as well as other aspects, from Nucu Morar, Chairman of the AVPR Management Board.

Railway Pro:
Why is it that the Romanian operators aren’t too attracted by single wagon load?

Nucu Morar: It’s obvious that for a railway operator is much more profitable to carry groups of wagons or block trains than single wagons. This aspect is related to the cost, which is higher for single wagons. These costs are covered by the beneficiary of the transport in question. Moreover, there is also the disadvantage related to the travel time necessary for single wagon load compared to block trains. These are, I believe, the main elements that tilt the balance in favour of single wagon load.

Railway Pro: SWL involves many costs, resulted in the use of switchyards and terminals. Do you believe that the tariffs applied in these facilities prevent operators from using SWL more often?

Nucu Morar: In a liberalized society, only the market can regulate this type of transport in terms of costs and tariffs. The technical aspects are well defined, and the costs are subordinated to these characteristics. If the railway operator can optimize railway transport by grouping single wagons from several beneficiaries or by cooperating with another railway operator, than the costs would be reduced. If a beneficiary has to carry a load, usually in case of dangerous freight (ADR), in order to carry on the production process within his company, and if the load is better carried by rail, he will choose the most convenient offer from the commercial point of view.

Railway Pro: How could railway operators attract customers who usually use other modes of transport to carry perishable goods (fruits, vegetables etc.)?

Nucu Morar:
Transport of perishable goods continues to exist. The main disadvantage is the high travel time by rail, as well as the possibility of recording losses, caused by the loading/unloading process.

Railway Pro:
What would be the best solutions to fluidize SWL freight transport in international traffic?

Nucu Morar: In this case, the solutions concern the time spent at customs. Any transport restriction is a serious violation of the “free circulation of goods and people”. Eliminating customs control would be the most realistic solution. We cannot accept any transport restriction. Eliminating customs control would boost this type of transport.

Equipment thefts represent a constant concern

Railway Pro:
What should the railway operators and the local authorities do to increase safety in terminals?

Nucu Morar:
If we are talking about thefts, then the question should be: what can we do to eliminate thefts in the railway sector? The thefts of railway equipment cause huge damages to the railway companies and this extremely unpleasant phenomenon has to be dealt with. Our company has made major efforts to convince railway operators and especially the national freight company CFR Marfă to diminish and eliminate thefts in the railway sector. We also organised various meetings with the Railway Transport Police. There is a local complicity between those involved in the railway transport activity when it comes to track and wagon thefts and we haven’t been able to destroy this complicity. Thefts in the railway sector push further away any possible customers from this type of transport which, theoretically, should be more profitable than any other mode of transport. The same situation is encountered in the case of depots and switchyards, or even in the stations where wagons are re-assembled. Various wagon parts are stolen in these facilities because of the lack of security. The parts are hard to replace and the wagon owners complain to the operators because they don’t receive their wagons in the same state in which they were leased.

Railway Pro: From the information we have, how do the operators cooperate with their customers to develop an efficient freight transport system in Romania and how could this cooperation be consolidated in the context of the current economic crisis, which has hit operators and customers alike?

Nucu Morar: The market will help companies to stay profitable and it will eliminate the companies that risk bankruptcy. Attracting freight in the transport sector is the main objective of any company at this time. Customers have become more and more exigent, seeing as the offer on the market is very rich, and the railway transport companies had to adapt. That is why the commercial aspects have become extremely important for the transport offers.
Railway companies have to learn to cooperate, seeing as the offer provided has to be competitive on the market. This would satisfy any customer. Another very important aspect is related to the transport logistics and infrastructure. The rail infrastructure is owned by the state and this entirely another matter.

by Alin Lupulescu

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