1. UIC – SIAFI, April 24th, 2007 1 Key Developments in European Rail Freight SIAFI Freight 2007 Ferdinand Schmidt CEO Rail Cargo Austria Chairman UIC Freight Forum Paris 24 April 2007

2. UIC – SIAFI, April 24th, 2007 2 The „historic“ Railway Undertakings RenfeCP SNCF EWS Railion SNCB CFF FS Green Cargo ČD ÖBB PKP MÁV ŽSR SŽ HŽ BDŽ EE CFR Railion CIE NSB LG LDZ EE VR BC UZ CFM RZD JŽ ZRS CFARYM HSh

3. UIC – SIAFI, April 24th, 2007 3 Track Gauges 1435 mm 1520 mm 1668 mm 1600 mm

4. UIC – SIAFI, April 24th, 2007 4 750 V courant continu 15 kV 16 2/3 Hz courant alternatif 3 kV courant continu 1.5 kV courant continu 25 kV 50 Hz courant alternatif Non électrifié Electric Specifications

5. UIC – SIAFI, April 24th, 2007 5 Railways have been underperforming in the intermodal competition in the EU25 Source: European Commission, UIC

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8. 8 EU legislation: 3 packages since 2001!  Separation of accounts for infrastructure & operations  Opening rail freight market since 1 January 2007  Liberalization of passenger services (under discussion – 3rd Railway Package) Liberalization of railway traffic in Europe

9. UIC – SIAFI, April 24th, 2007 9 Different models for separation of IM and RUs. Accounting separation and non-discriminatory as minimum requirements STRUCTUREOWNERSHIP PUBLICPRIVATE INTEGRATED, i.e. infrastructure and RU operations are independent but integrated in a holding structure Austria, Belgium, Switzerland, Croatia, Germany, Greece, Ireland, Luxembourg, Lithuania, Latvia, Hungary, Poland, Italy, Serbia, Montenegro, Bosnia- Herzegovina RUSSIA, CHINA, INDIA Estonia USA, Canada, Mexico – freight JAPAN – passenger LATIN AMERICA – freight PARTIALLY INTEGRATED resp. SEPARATED* France, Czech Republic, Finland, Slovenia FULLY SEPARATED, i.e. infrastructure and operations are institutionally separated Bulgaria, Denmark, Norway, Netherlands, Portugal, Romania, Spain, Slovakia, Sweden, UK (infrastructure) UK (operating companies) * responsibilities for traffic management and network maintenance have been subcontracted by the infrastructure company to incumbent operator.

10. UIC – SIAFI, April 24th, 2007 10 Interests of the customers?  Creating a competitive environment to obtain better cost- performance ratios. The goal is to have supply and demand regulated by the market.  The railway is one of the last sectors which has not yet been liberalized, see banking sector, aviation, steel industry, electricity market, etc. Liberalization of railway traffic – Why? (I)

11. UIC – SIAFI, April 24th, 2007 11 Interests of the owners?  The owners of the railways aim at reducing expenses. The State, according to its own statement, is a bad entrepreneur.  The aim is to deliberately transfer the responsibility to the railway companies in order to: – increase the pressure for cost-cutting – increase self-responsibility – increase market orientation Liberalization of railway traffic – Why? (II)

12. UIC – SIAFI, April 24th, 2007 12 What are the effects of liberalization?  Reducing size and influence of the incumbents  Incumbents have to focus on business management approach – increase efficiency (consolidating traffic, shunting, loading points) – Portfolio adjustment – Customized services, tailor made solutions – Pan-European corridors Market opening - Which consequences? (I)

13. UIC – SIAFI, April 24th, 2007 13 More effects:  Additional investments in terminals  Establishment of integrated European networks  Development of carrier alliances  Concentration on profitable businesses Market opening - Which consequences? (II)

14. UIC – SIAFI, April 24th, 2007 14 First results: strong intra-modal competition is emerging  E.g. Rotterdam-Genova (Köln / Karlsruhe) corridor: - prices are falling: up to 20% in last 3 years - slight increase of demand: 5-10% p.a. Market opening - Which consequences? (III)

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17. UIC – SIAFI, April 24th, 2007 17 Our ToDo's  We have to ensure a high quality standard (reliability, just- in-time delivery)  We need to improve our effectiveness constantly  Competitive prices will get more an more important because of longer distances of transports caused by moving industries How responsive can freight be? (I)

18. UIC – SIAFI, April 24th, 2007 18  Focus on our strengths: long distances  New concepts: terminals, railports  More flexibility: combination of different modes of transport  Hub and Spoke How responsive can freight be? (II)

19. UIC – SIAFI, April 24th, 2007 19 The world of our pricing structures has to change!  Today our prices are based on: - Types of wagons - Transportation routes - Types of goods carried  Our world of thinking is based on tariffs and not on prices (government oriented and not market oriented) Offering customers diverse pricing structures?

20. UIC – SIAFI, April 24th, 2007 20 Forum Plenary Chairman: F. Schmidt / Railcargo Working bodies of UIC Freight Forum SG Operations H. Fikar B. Koglbauer SG Quality H. Pfeiffer R. Söllner SG Combined Transport E. Peetermans  Cross border process optimisation  Coordination with Infra- structure (EPR, ERIM...)  Interface with RNE and FTE  Commercial consequences GCU  Dangerous goods  Quality agreements  Quality management systems  Safety Steering Committee  DIOMIS  Quality issues and work with UIRR  Tariff issues  Tracking and tracing (Use-It)  Pallets & Loading rules WG  FTR & ERA coordination SG Rolling Stock M. Sandoli L. Armenti SG Market O. Poitrenaud C. Abellan  Quality framework agreements (FIATA- CLECAT)  Single wagon load UIC: B. Schmitt SG IT Systems R. Wilke F. Bedel  SEDP  RICS + Hermes (GRU) SG RAILDATA M. Rühl K. Stenberg Implemen-tation of IT applications UIC: B. Schmitt UIC: S.Géhénot UIC: J.Fazik UIC: S.Géhénot  Joint Committee  Transverse Group  Remaining RIV Wagon Exchange E. Peetermans

21. UIC – SIAFI, April 24th, 2007 21 UIC Freight Forum - Portfolio of major projects and activities Consequences of liberalization Quality of international products Operations / Safety / Security / Environment  Implementation of TSI TAF: Technical Standards for Interoperability: Telematics Applications for Freight  European Performance Regime  European Railway Infra- structure Master Plan (ERIM)  Standard regime for exchange of wagons (GCU)  Combined Traffic – Developing Infrastructure and Operating Models for Intermodal Shift (DIOMIS)  European Single Wagon Load Business  Quality guidelines for customer contracts  Participation in European Projects (TREND, CREAM)  Simplifying Cross-border processes  Implementation support for EU Safety Directive  Support Noise Reduction with rolling stock innovations  Standardising Energy Billing internationally

22. UIC – SIAFI, April 24th, 2007 22 Thank you for your attention!