Rail freight market liberalisation aims at improving rail transport efficiency in the context of a single market. More precisely, this means that a market which is open for railway operators, which is economically attractive and which provides optimum operational conditions, is interoperable and operates according to well-defined standards. In 2010, this objective wasn’t fully met, and the rail freight transport services do not operate at full parameters because of the incomplete transposition of the European legislation at national level.
The liberalisation process is also influenced by the lack of interoperability, the lack of a proper rail infrastructure in ports and the technical and administrative barriers. However, if all these problems would be solved, the development of the railway sector and of the rail freight transport services should be also based on private investments. “It is highly important for the private sector to invest in rail transport. Practically, one of the weak points of the railway sector is the lack of private investments, which causes a low quality of the infrastructure and of the freight transport services.
“There should be independent and private operators in order to guarantee a major competitiveness in the railway sector”, said Debora Serracchiani, the European Parliament’s rapporteur on the recast of the railway policy.
Even though the liberalisation of the rail freight market is still facing many problems, this process proved to be beneficial for the rolling stock leasing companies. The opening of the rail freight market led customers to consider the innovative offers provided by rail transport, to the detriment of road transport. In many EU countries, rail transport is still stagnant because of the national companies who eliminate the competition to protect the national market.
This, however, doesn’t lead to innovation; it doesn’t focus on the customers’ needs, on efficiency, or on investments for the acquisition of new rolling stock and locomotives. In this context, the new situation demands more focus on the business sector, where various players begin to emerge: new operators and leasing companies.
Leasing companies respond positively to the challenges brought by the financial crisis or to those imposed by the opening of the rail transport market. Companies have adapted to the new economic realities and they should be able to improve their traffic volumes much faster then their competitors. For 2011 they estimate that the freight volume will increase, leading to an increase in the rolling stock demand. The economic recession has forced several railway carriers to reduce the number of locomotives. Abandoned in depots, they were no longer able to operate because of malfunctions and carriers were not able to make short-term investments to satisfy the increase in freight volumes. This created the perfect business opportunity for the leasing companies, who managed to meet customers’ demands. The liberalization also contributed to the increase in the number of carriers. For the rolling stock leasing market, this meant more offers: rail cars adapted to special transport standards, locomotives equipped with ERTMS etc. Although Russia is not a European market, it managed to sell numerous assets from state-owned rail freight operators, therefore diminishing state monopole and creating a private market. This development also led to the expansion of the rolling stock leasing sector, which brought an infusion of investments in the acquisition of new rolling stock. For instance, Brunswick Rail, a Russian leasing company, announced in December that they will allocate USD 500 Million for the development of the company. “Brunswick Rail has already financed an investment program which allows the company to consolidate its position on the leasing supplier market. First of all, a large part of this investment will be used for the renewal of the rolling stock fleet in order to meet customers’ demands”, said CEO Vladimir Lelekov.
As for VTG leasing company, the liberalization means the revitalization of the rail freight market. Competition is vital and the increase in demand creates a positive environment for competitiveness. “2005-2006, the period during which new rail freight carriers began to appear on the market, were very profitable for the company, because the available rolling stock fleet was larger than the one owned by state companies. The opening of the rail freight market brought a revitalization, generated by competition. The new players imposed a change in offers and in the attitude of service suppliers. In this context, leasing companies face great challenges. For us, a major challenge is the increase in demand for special freight transport rail cars. This type of rail cars is demanded by private carriers.
While VTG relied on tank car leasing, the liberalisation imposed a change in our offer, creating advantages for non-tank cars. For Central and Eastern Europe, the company’s strategy focuses amoungst others on developing this type of offers”, declared Matthias Knüpling, Head of Fleet and Sales Management of VTG, for Railway Pro Magazine.
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