The latest IRG (Independent Regulators Group) Market Monitoring Report shows that the market share of competitors continues to grow with competitors accounting for 55% of the European rail freight market in 2023. This growth is driven primarily by the growth of new market entrants who have grown from 33% of the market in 2019 to 40% of the market in 2023. It must be recognised that this growth of total market share is against the backdrop of a decline of total rail freight volumes in 2023.
The latest results of the Market Monitoring Report shows that there is a significant added value of competition in the European rail freight market. The expectation over the coming years is that, overall, competitors will continue to grow their market share, while incumbents such as DB Cargo and Hexafret (ex SNCF Fret) will have to reduce their activities due to Competition Law rulings. Growth will therefore be predominantly driven by new market entrants. The focus of European policy subsequently needs to increasingly focus on how to support these companies to stay and grow in the market as a means to support climate friendly transport by rail.
It must be noted that these figures are an average and market shares still varies greatly from country to country. Continued focus should therefore remain on removing national barriers to rail freight, particularly those impacting international services, and ensuring fair competition in national markets.
It must also be recognised that despite this growth of the total market share of challengers, rail freight is in a difficult position with a drop of volumes in 2023 due to high intensity of infrastructure works, high competition from road and a weak economic situation in European industry. To accelerate the growth of rail freight again, the focus must be on improving infrastructure capacity and works management, guaranteeing fair competition, achieving a level playing field between modes and reducing the costs and burdens of regulatory compliance being placed on companies active in rail freight transport.
Greater predictability is needed on works and temporary capacity restrictions. To achieve this, Member States should ensure that infrastructure managers have stable and multiannual financing for works, and that works are subsequently planned and carried out in a user friendly manner.
ERFA President, Dirk Stahl, stated, “Rail freight is at a crucial moment in terms of volume and profitability. The performance of challengers, especially in growth markets, is impressive. The focus of European Rail Policy must be on favourable market conditions and interoperability in international rail transport flows in growth markets, such as combined traffic, rather than artificially keeping unprofitable and stagnating market segments alive.”
ERFA Secretary General, Conor Feighan, concluded, “the adoption of the Railway Infrastructure Capacity Regulation should help the growth of rail freight in the longer term. Measures are also needed to reduce the costs of regulatory compliance falling on the shoulders of rail freight undertakings. Upcoming TSI revisions and ERTMS deployment plans must focus on whether updates support or hinder the competitive of rail freight in the short term. Further work is needed to ensure rail can compete fairly with other modes, such as by ensuring direct access to electricity markets for traction and balancing the coverage of the externalities between modes.”
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