Lesson 1 - How to compete with trucks?

If the EU aims for 100% emission cuts by 2050, more goods have to be moved by train. As a result, rail freight must become more flexible and cost effective.

The European road network is far bigger than the rail one. For example, there is 60 000 km of rail infrastructure in Germany and 600 000 km of roads. 30 000 km of rail infrastructure in France and 1 000 000 km of roads. This gives trucks a much greater ability to deliver, whenever they want, door-to-door services. On the contrary, access to rail infrastructure has to be planned, usually months in advance, and only a few European businesses are accessible by rail.

Also, passenger trains have priority over freight trains when it comes to track access and are the first to be granted passage when a delay clears. For reasons of safety and planning, rail infrastructure is managed centrally by a company (infrastructure manager) so that all trains have slots booked in advance of their journey. These slots are often booked over a year in advance of the trip. A political decision was made to give passenger trains priority due to the more immediate impact it has on citizens who pay for the train – also passenger rail is where most of rail’s revenue comes from so it’s best to keep the customer happy. Road doesn’t have such management and vehicles can drive when they choose. Trucks don’t have to worry about secondary treatment as all road vehicles are treated the same when it comes to access to infrastructure or delays.

Finally, trucks don’t need to stop at borders to make changes to any of their equipment. Their technology is harmonious and interoperable across Europe. For rail though, there are six different track widths, six different power standards and four different pantograph types for power supply. Loading gauges for freight also differ.

Since trains seldom provide door-to-door services, more efforts should be made to develop intermodal transport, a combination where a truck performs the first and/or last mile of a railway journey. Thanks to the Combined Transport Directive, drafted by the EU in 1992, intermodality has proven its worth. It still has a lot of unused potential though and interoperability is key to its growth, as well as making loading and unloading easier.

Innovatrain and Modalohr are examples of technology that exists and should be further supported to improve intermodality in Europe. This topic of technical innovation will be covered in more detail in a future lesson.

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The cost to operate a train is a lot more expensive than a truck. There are several reasons for that:

• Labour costs are lower for road haulage. This comes partly as the result of illegal cabotage that is increasing on the European market whereby truck drivers are operating permanently in foreign countries but getting paid below the national minimum wage.
• Costs for accessing road infrastructure are lower, sometimes even nonexistent. Trains pay for every km of infrastructure they use while trucks only pay for a small percentage of their entire network. Furthermore, truck drivers can get rebates for money spent on fuel tax in several European countries. Eight countries now give hauliers rebates on their diesel excise, which amount to a total €4.5 billion annual sum.
• Technology needed to move freight by truck is lower. A locomotive and a wagon could cost over a million euro while a truck and trailer could cost a few hundred thousand euro.

Rail freight becomes cost competitive over long distance due to the fact that it can transport the same amount of freight for less labour and fuel costs than road freight. As a result, train should be chosen over trucks when the trip is longer than 300 km.

As for shorter distances, the instalment of smart tachographs in trucks is needed as soon as possible to make haulage companies pay realistic labour costs. This would also mean social progress for truck drivers, which is far more urgent than the competitive disparity between road and rail.

Finally, the European Commission has recently promoted distance-based charging in its so-called “Eurovignette Directive”. Establishing tolls for trucks across Europe is a step in the right direction. If the Commission proposal is passed, distance-based tolling will have to become mandatory and applied at national level, which could have an impact on reducing the distances where rail becomes economically viable. Such tolls can also improve logistic efficiency and increase the uptake of cleaner trucks.

The below table summarises the differences between road and rail in terms of what they can offer to the client.

Clean freight shouldn’t be approached as rail vs road as even the largest train companies have truck divisions these days: Deutsche Bahn has DB Schenker and SNCF has Geodis. This is why EU and national politicians must actively support modal shift as a part of the transition to zero emission freight. We have to bear in mind that, even in the most optimistic scenario, the majority of freight will remain on trucks which means that road freight also needs to become cleaner.

For more freight to be transported by rail, improvements need to be made to the services that trains offer. One idea of how to make this happen that was supported by the EU is the opening of the market to competition. Our next article will cover this topic.

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