European Commission study: liberalisation makes rail freight better

A study by the European Commission has found that liberalisation has brought improvements to rail freight service. Supposedly, liberalisation has grown and diversified service offers and may have improved service quality. It has also introduced a new impetus to modernisation in the sector. 

Liberalisation of the rail market and the subsequent growth in competition have resulted in significant reductions in freight transportation costs, according to the Commission study.

“In the freight rail market, competition has led to decreased prices and operational costs, with a slight increase in demand, particularly in intermodal freight”, the EU’s Directorate-General for Mobility and Transport writes.

Increased competition has also led to more and diversified services, according to the study. Moreover, by shifting the focus to service quality, competition may have contributed to an improvement in that sphere. Although, says the Commission, market surveys are inconclusive about the quality improvements.

The Commission also says that parties entering the market have provided an impetus to modernisation in the sector. Competition has forced established market parties to review their practices and make them more efficient, leading to lower prices.

ERFA is happy with the study’s outcome

The European Rail Freight Association (ERFA) has welcomed the Commission’s study. “More than two decades after the gradual market opening of the rail freight business in the EU, the study pointed to some of the major benefits that came with competition, largely echoing the main findings of the 2022 ERFA Study on market opening and some of the proposals of the ERFA Manifesto for 2024-2029”, the association says.

ERFA sees recognition from the EU for rail freight’s obstacles. “The study reports major remaining challenges to competition. The network is facing difficulties in providing sufficient and good-quality capacity to absorb the additional traffic”, says ERFA.

Blueprint for the rail agenda

“Operators struggle to afford technological upgrades such as ERTMS on-board units. Cross-border operations remain complex with numerous delays at border crossings, and poor coordination of capacity paths between neighbouring infrastructure managers.”

The president of ERFA, Dirk Stahl, hopes that the study will leave a mark on the new Commission’s plans: “​​This Commission study must become a blueprint for the rail agenda of the appointed Transport Commissioner. Apostolos Tzitzikostas should make a priority to overcome the identified challenges to competition in the rail freight market. This is essential to complete the SERA and allow rail freight market share to grow.”