1. The Voice of European Railways RMMS 11 th meeting – 03 December 2004, Bruxelles 1 Rail Freight Quality Report 3 December 2004, 11 th Meeting of the Rail Market Monitoring group

2. The Voice of European Railways RMMS 11 th meeting – 03 December 2004, Bruxelles 2 CER – general positions on freight CER supports the opening up of the freight market in 2007 – more competition will strengthen the rail freight business, giving more business for us all.. CER recognises the key role of quality, including punctuality, in providing an attractive service for customers

3. The Voice of European Railways RMMS 11 th meeting – 03 December 2004, Bruxelles 3 Background One year on…. Autumn 2004: CER Update report published Summer 2003: CER-UIC-CIT Charter adopted

4. The Voice of European Railways RMMS 11 th meeting – 03 December 2004, Bruxelles 4 Developments in the rail freight market One year on…. 1. market performance 2. emerging trends 3. results on quality 4. what do we learn?

5. The Voice of European Railways RMMS 11 th meeting – 03 December 2004, Bruxelles 5 Developments in the rail freight market One year on…. 1. market performance 2. emerging trends 3. results on quality 4. what do we learn?

6. The Voice of European Railways RMMS 11 th meeting – 03 December 2004, Bruxelles 6 Rail freight aggregate output EU-10 EU-15+CH+NO TOTAL Billion ton-km per quarter Source: UIC

7. The Voice of European Railways RMMS 11 th meeting – 03 December 2004, Bruxelles 7 Four largest operators in Western Europe FS SNCF DB UK FOC Source: UIC Billion ton-km per quarter

8. The Voice of European Railways RMMS 11 th meeting – 03 December 2004, Bruxelles 8..and in Central and Eastern Europe PKP LDZ LG CD Source: UIC Billion ton-km per quarter

9. The Voice of European Railways RMMS 11 th meeting – 03 December 2004, Bruxelles 9 Relative to the economy % change on 3 rd Quarter of 2003 Source: UIC and The Economist

10. The Voice of European Railways RMMS 11 th meeting – 03 December 2004, Bruxelles 10 Developments in the rail freight market One year on…. 1. market performance 2. emerging trends 3. results on quality 4. what do we learn?

11. The Voice of European Railways RMMS 11 th meeting – 03 December 2004, Bruxelles 11 Trend 1: rationalising operations SNCF in focus Billion Tonne- Kilometres Per Year Source: SNCF

12. The Voice of European Railways RMMS 11 th meeting – 03 December 2004, Bruxelles 12 Trend 2: stable prices ROAD RAIL Price Index 2000=100 Source: UK Office for National Statistics, CSPI Importance of Eurovignette Directive

13. The Voice of European Railways RMMS 11 th meeting – 03 December 2004, Bruxelles 13 Trend 3: greater product differentiation Railion in focus Offering different price/quality mixes Spring 2003 – 3 new block train products Plantrains Variotrains Flex-trains Autumn 2003 - 2 new single-wagon load trains Classic Quality Spring 2004 - block train offer extended to NL and DN Some customers prefer low price option 68% of customers surveyed prefer a low price- low performance deal for single-wagon load

14. The Voice of European Railways RMMS 11 th meeting – 03 December 2004, Bruxelles 14 Trend 4: more information for customers Several members adopt GPS systems track and trace wagons in real time customers see information every few minutes via secure website issues remain over accurate prediction of arrival time, if an incident occurs

15. The Voice of European Railways RMMS 11 th meeting – 03 December 2004, Bruxelles 15 Trend 5: new markets emerging “Our aim is to provide a next day delivery service on all our parcels which is becoming increasingly more difficult on the congested road system where truck speeds are diminishing. Therefore we have been putting the long-distance parcels on high speed trains” Securicor Omega Express, UK. Parcel traffic, retail sector, logistics…

16. The Voice of European Railways RMMS 11 th meeting – 03 December 2004, Bruxelles 16 Trend 6: political support grows Rail freight is popular! A UK survey conducted in December 2003 found 79% of people identified transferring freight off roads onto rail as a priority for Government in tackling congestion on motorways. This was more than 4 times the number in favour of building more roads.

17. The Voice of European Railways RMMS 11 th meeting – 03 December 2004, Bruxelles 17 Developments in the rail freight market One year on…. 1. market performance 2. emerging trends 3. results on quality 4. what do we learn?

18. The Voice of European Railways RMMS 11 th meeting – 03 December 2004, Bruxelles 18 Increased use of Quality Clauses Percentage Of business Covered by Quality contracts Survey of CER members

19. The Voice of European Railways RMMS 11 th meeting – 03 December 2004, Bruxelles 19 Improved punctuality In general for UIRR international trains

20. The Voice of European Railways RMMS 11 th meeting – 03 December 2004, Bruxelles 20 Improved punctuality CER Corridor number 5: Antwerp-Basel LINEViaRUAVERAGE 2002 AVERAGE 2003 BE/ITBettembourg/ Basel/Luino SNCB/CFL/SNCF/ SBB/FS 58,1%78,4% BE/CHBettembourg/ Basel SNCB/CFL/ SNCF/SBB 71,6%79,8% BE/FRSterpenich/ Bettembourg SNCB/CFL/SNCF70,8%84,1% Interoperable locomotives (T13/3000) introduced in 2003 New dedicated freight line: Athus-Meuse opened in 2004 Punctuality up to 90 percent expected

21. The Voice of European Railways RMMS 11 th meeting – 03 December 2004, Bruxelles 21 Developments in the rail freight market One year on…. 1. market performance 2. emerging trends 3. results on quality 4. what do we learn?

22. The Voice of European Railways RMMS 11 th meeting – 03 December 2004, Bruxelles 22 Analysing the causes of delays Danger in superficial analysis We currently measure a subset of the market (UIRR trains). This leads to incentives for IMs: 1.In timetabling, to give the monitored trains ‘better slots’ than non- monitored trains. 2.If incidence occurs, priority given to monitored trains. 3.‘Ticking boxes’ measurement is superficial e.g. ‘missing locomotive’. But why is it missing?

23. The Voice of European Railways RMMS 11 th meeting – 03 December 2004, Bruxelles 23 What do we learn? 1. Quality can be improved by more efficient use of existing infrastructure But this is limited by existing priority rules and infrastructure in much of Europe. Delays are inevitable if the network is congested, and priority is given to passengers Freight operators need the possibility to buy train paths to run trains during the day over long distances in Europe.

24. The Voice of European Railways RMMS 11 th meeting – 03 December 2004, Bruxelles 24 What do we learn? 2. In many cases, operators cannot insure themselves against the risk of infrastructure failure. Therefore they cannot offer quality clauses at a competitive price. Rational operators will only accept risk from compensation contract if they can pass on any risks which they themselves are not able to control. Without secure infrastructure funding, IMs too are unlikely to accept risk.

25. The Voice of European Railways RMMS 11 th meeting – 03 December 2004, Bruxelles 25 What do we learn? 3. Infrastructure remains key – the Swiss example % freight trains arriving less than 30 minutes late

26. The Voice of European Railways RMMS 11 th meeting – 03 December 2004, Bruxelles 26 What do we learn? 3. Infrastructure remains key Bottlenecks in 2015 with current Infrastructure capacity Bottlenecks in 2015 with all future planned investments, including TENs Source: UIC CTG and UIRR Study of infrastructure capacity reserves for combined transport by 2015.

27. The Voice of European Railways RMMS 11 th meeting – 03 December 2004, Bruxelles 27 Conclusions Quality increased since Charter signed Operators can improve performance, but concerns remain: Monitoring root causes of delay Priority rules (regionalisation of policy) Risk-sharing rules between IM and RU Quality infrastructure remains necessary, if not sufficient, condition for a competitive rail freight market

28. The Voice of European Railways RMMS 11 th meeting – 03 December 2004, Bruxelles 28 Thank you Report available at www.cer.be Edward Calthrop 00-32-2-213-0839 edward.calthrop@cer.be

29. The Voice of European Railways RMMS 11 th meeting – 03 December 2004, Bruxelles 29 Annex: Finland 90% punctuality (<15 minutes)