Positive turn for train transport - Gustaf Engstrand 05/10/22

Source: https://dagenslogistik.se/positiv-vandning-for-tagtransport/

During the first half of 2022, freight transport by rail increased by 10.5 percent in Sweden, and the same trend can be seen throughout Europe. "Competitiveness has strengthened, especially when it comes to cross-border transport" says Gustaf Engstrand at Tågföretagen

According to the international combined transport agency UIRR, combined transport in Europe increased by almost 11 percent in 2021, calculated in tonne kilometres. In Sweden, rail freight volumes increased by 3.8 percent to 72.5 million tons in 2021, and in 2022, rail freight volumes increased by 10.5 percent in the first half of the year.

After many years of tough commercial conditions for combined transport, the pendulum now seems to have turned, says Gustaf Engstrand, head of business policy at Tågföretagen.

Gustaf Engstrand. Photo The train companies

- We have talked about this for a long time, previously perhaps against strong headwinds, both from politics and from authorities. But in the last two years, we have seen a clear change in favor of the train, where competitiveness has been strengthened, especially when it comes to cross-border transport, says Gustaf Engstrand.

Sweden has a number of train operators within combined transport; where some examples are Green Cargo, Hector Rail, Sandahls, TX-logistik, Real Rail and Norska Cargonet, which left the Swedish market ten years ago, but is now greatly expanding its traffic between Sweden and Norway.

- We are receiving positive signals from the train companies that operate combi services, with new lines starting and increased traffic. Then the train commutes to and from the ports are an important contributing factor, not least the port of Gothenburg, which has around 20 train commutes, and from Trelleborg, where combi traffic is also growing.

Statistics: Traffic analysis

Several driving forces

According to Gustaf Engstrand, there are a number of driving forces behind the tailwind for combi traffic:

- When the EU's new cabotage rules were introduced in 2007-2010, competition from road transport became brutal. It has simply been too cheap to transport the goods by truck and combi traffic has not been able to compete. Now the cabotage rules have been improved and tightened, making it more difficult to get hold of cheap foreign drivers to drive the trucks. The increasing reduction obligation has also contributed. The crisis situation in Europe, the fuel crisis and the rising fuel prices, together with clear political ambitions at the EU level that this transition needs to take place are factors that are currently influencing the conditions.

The pandemic has also contributed, he believes:

- The pandemic had the effect that the railway had to prove itself as a reliable transport alternative in a crisis. Cross-border rail transport worked significantly better than road transport, with less disruption and delays. I think a lot of merchandise owners take that into account in a different way now than before.

The railway had to prove itself as a reliable transport alternative in a crisis

Can provide competitive advantage going forward

Of course, there are challenges for combined transport - one of them is that the rail network is becoming crowded. Right now, the Swedish Transport Administration also has problems with the planning , which means that the Train Plan for 2023 looks to be significantly delayed.

- It is always possible to get train slots, but there is more and more waiting time for freight traffic on the routes. We usually call it "forest time" when the trains have to stand and wait. This means that transport takes longer, and that vulnerability increases.

Overall, however, the development looks bright, and the companies that invested strategically in putting their transports on rails can gain a competitive advantage going forward, says Gustaf Engstrand.

Those who worked systematically with a connection to the railway will have a competitive advantage going forward

- Take Ica for example, they have never given the railway as a form of transport an honest chance, and planned their logistics based on road transport. Their warehouses are without a train connection, while companies such as Lidl and Coop invested in rail transport for many years and ensured that they have train-connected warehouses.

Today, Coop makes about 30 percent of its transports in Sweden by rail, and the company's new central warehouse in Eskilstuna, which will open in 2024, has its own electrified tracks into the site, which further improves capacity and efficiency.

- I think it can benefit such actors in the future, that is, those who have worked systematically with a connection to the railway will have a competitive advantage with cheaper and more efficient transport, says Gustaf Engstrand.

By Hilda Hultén