Noise-differentiated track access charge could affect the railway market stability

To reduce the noise level generated by freight wagons, EC has initially reached the conclusion that equipping coaches with silent braking systems has proved the most efficient method. But due to competitiveness, companies which activate on the freight transport market have not enough resources or stimulus to finance the financing of the rolling stock fleet. Consequently, EC favours an European approach using a noise-differentiated track access charge.

According to the final report “Analyses of preconditions for the implementation and harmonization of noise-differentiated track access charges”, the analysis of the intermodal competition showed that an incentive system would make rail freight more expensive. This raises the risk of intermodal shift away from rail. A pure bonus-system could have positive effects whereas then the financing of the system needs to be examined. The general concern of stakeholders is that noise-differentiated track access charge could lead to higher prices for rail freight and therefore weaken the sector.
Consequently, the main risk of the noise-differentiated track access charge for all types of railway companies is the possibility of decreasing margins if the costs for rail transport increase. As a consequence, there is a potential risk for modal shift if railway companies are forced to raise their prices due to higher costs while other modes of transport are not treated in the same way. This is particularly of concern for railway companies which offer services at the so-called “last mile” which usually are in highest danger of substitution by road in case of a worsen cost-benefit relationship.
Any noise-differentiated track access charge-bonus related to mileage could also be assumed to benefit those railway companies mainly operating long and frequent running services, for example container shuttles, compared to those railway companies with a wider range of services and a higher proportion of less frequent and shorter services. However, in respect to the specific market segments and the intramodal competition the noise-differentiated track access charge seems to have the same effect for all players.
However, in respect to intramodal competition an increase of costs due to the noise-differentiated track access charge could be seen as a threat for smaller railway companies or new entrants with a weaker commercial basis. Larger railway companies, such as incumbents, especially state-owned railway companies are more likely able to absorb losses or reduced margins temporarily due to their financial stability, their ownership structure and their wider range of business. This means that such railway companies could benefit from a situation in which smaller or private railway companies are forced to raise their prices due to burdens of noise-differentiated track access charges while stronger players keep their price level stable to gain market shares. Thus, noise-differentiated schemes must be drafted to attain noise protection goals whilst in the same time negative impacts on the rail freight market are avoided.

[ by Pamela Luică ]
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